“So, if the home inspection finds stuff, can I just renegotiate the price?” they asked.
“Yes. No. Maybe.” My response was clear as mud because the answer is not set in stone and the purpose of the home inspection is so often misunderstood. Even by Realtors® it is misunderstood.
We have purchased a number of houses in our lives but a few years ago, we jumped in and had a new home built. We had come to a point in our lives where we were busy and taking on another project was not what we wanted. We wanted our “forever” home.
When possession day came, we walked through the home with the builder so he could explain the workings of the house and to point out any defects in the house.
What?
Defects? This was supposed to be a brand new, “no defects” home. What we discovered instead, was that even in a brand new, never lived in home, there are defects. We ended up with 3 full, double-sided, Excel-goddess worthy spreadsheet pages of issues. Everything from plumbing to missing grout to broken floor tiles and window problems.
And, eventually the builder made it right.
What does this have to do with inspections? Simple.
Every house, whether well-lived in or brand new, has issues and defects that will draw flags on a home inspection
So coming back to the original question – “Can we renegotiate after the home inspection?” and my answer, it depends.
We always strongly recommend a home inspection. Why?
1. Awareness
So the buyer has an opportunity to understand the “defects” and potential issues in a home and the associated costs to remedy. When you’re investing in a property, it is important to know the short, mid and long-term costs to the best of one’s ability. That is not just financing costs but, the maintenance costs that will need to be addressed.
2. Finding the “hidden prizes”
Beyond what you may see in viewing the homes, some things cannot be seen in a 30-60 minute walk through of the house. Is there insulation in the attic? Does the electrical work? How much life is in the mechanicals and high ticket items? These are just some of the areas a trained, certified inspector might be able to ascertain.
3. Locating the “minefield”
Sometimes, an inspector might find a “time bomb”. Something that is hard to find but also either dangerous or extremely expensive to remedy. Perhaps the electrical, plumbing or some other part of the house has been finished incorrectly and the cost to remedy is not only expensive but may turn the home from something needing TLC to the Money Pit. Cue: Anna bo Banna, banna nanna bo Banna
So what about the answer to the question? Can I renegotiate after a home inspection?
1 – Yes!
If you do find some “hidden prizes” that were not detectable in your viewing, like the high ticket items that will be costly to remedy. In that case, even the seller may not be aware of the issues and might be willing to look at pricing or getting the issue(s) remedied at their expense.
2 – No!
Every home has defects. The list on most inspections will have a number of ‘red’ areas to be addressed. An inspection creates an opportunity for you to learn the information before moving forward. But if they are minor or were seen during your viewing of the property – it isn’t really fair, nor acting in good faith, expecting to renegotiate and ask for a new price based on items you were aware of when you made the deal.
3 – Maybe?
If your inspection does find a minefield full of bombs, maybe further negotiation is needed. Or, on the other hand, do you really want to take on issues like that; are you prepared? Or perhaps it is time to look at another property.
Inspections are NOT intended as a renegotiation tool. They are NOT intended as a tool to allow you to walk away from a perfectly good home that you now regret making an offer on and now want to walk away from in bad faith.
The bottom line –
Inspections are for awareness and to ensure you do not take on more than you can handle. In short, to protect your investment.
If you thought otherwise, perhaps you need more education on this aspect of the home buying process.