Negotiating After the Home Inspection for Home Sellers

Written by Posted On Sunday, 20 December 2020 17:26
Negotiating After the Home Inspection for Home Sellers Negotiating After the Home Inspection for Home Sellers

As a home seller, there are many difficult hurdles during the home sales process. At times negotiations can become heated and you, the home seller might feel offended and even insulted. No aspect of the home sale seems to foster more negative emotion than the Home Inspection process.

To begin with, the fact that the buyer even wants to have an inspection at all makes many home sellers feel as though they lack integrity or trustworthiness. The idea of strangers walking around with unrestricted access to their home can make matters even worse. 

All of this happens before the home buyer even asks the seller to fix a single thing. This is why in many cases the seller is primed to reject any inspection requests made by the buyer without consideration.

angry home seller

While this reaction is understandable, In most cases, it’s a mistake. While there are those rare cases when a homebuyer is simply going to keep negotiating the deal until they win and you lose, this is not the case for most homebuyers. Most homebuyers are simply afraid of what they don’t know. This means that just like you, the seller, they are trying to avoid being taken advantage of. The primary focus for most homebuyers when negotiating after the home inspection is to avoid buying someone else’s problems. 

Remember, they assume that you as the homeowner know the condition of your property. In many cases, the homeowner is more surprised than the homebuyer to learn the results of a property inspection. 

Change Your Attitude

One effective way to avoid drama and emotion related to the home sale process is to adopt the attitude that you are no longer the homeowner, you are the home seller! This simple shift in attitude can help you navigate the home selling process in a more effective manner.

Another important point to remember is that no real estate contract that I’m aware of, requires the home seller to do anything more than making a full and honest disclosure of any known issues affecting the property condition. This means that every home sale starts out as an “As Is Sale”. For example, the Colorado Contract to Buy and Sell Real Estate states in section 10 that unless otherwise provided in the contract, the Seller is conveying the Property to the Buyer in “As Is” condition.

as is sale

The counterpart or buyer's protection from the “As Is” clause is the Due Diligence or Inspection clause. This gives the buyer the right to perform inspections and inquiries on and about the property. The results of these inspections leave the buyers with the options:

  • Accept the property as is 
  • Ask for any problems to be taken care of
  • Some acceptable Alternative Resolution
  • Terminate the contract.

If you as the seller have disclosed problems the inspection would discover but have no intention of making repairs, you should have priced the property accordingly and disclosed to the buyer that you are selling the property in “As Is” condition. This way the buyer has the choice of moving forward with the inspection or terminating the transaction saving both parties time and money.

If on the other hand, the inspection does uncover a problem that you had no previous knowledge of, you need to make a decision about either making the issue right or holding your ground on the “as is” stance. Just remember that once you are made aware of the problem, you are obliged to disclose the new issue. So, moving forward you should update the “Sellers Property Disclosure” so that each new potential buyer is aware of the problem. Any issues should of course be reflected in your listing price as well. 

While all of this can be a hassle for the home seller, it’s better to play by the rules as opposed to dealing with a potential court case down the road. Disclosure or more specifically non-disclosure is the primary reason for residential real estate lawsuits. Homebuyers that discover a problem with a home after closing or hear from a neighbor about problems the previous owner had can be compelled to seek legal help and restitution.


A pre-listing home inspection is a good way to learn about the true condition of your property from an objective third party’s perspective. This also adds a layer of protection, especially if you share the report with potential buyers. Lack of transparency and lack of disclosure is the express lane to court, so just be honest.

Once you do receive an Inspection Request, you will have some decisions to make. While you may be inclined to respond to the request with a resounding “NO”, the best plan is usually to work with the buyer you have. 

Not working with a buyer that is willing to give you your price can be a mistake. This creates a scenario where you start looking for buyers that are willing to ignore the problems with the home. In most cases, these buyers don’t exist and you can ultimately end up making those repairs or concessions several months later. This ends up being a big waste of both time and money. 

When you receive your inspection request, you have several options when it comes to negotiating. This is a great time to get creative so here are eight great ideas:

    1. Refuse - Simply refusing to comply with any of the repair requests made by the buyers is certainly one way to deal with the inspection issues. This might be a good idea depending on the condition of the market and the amount of available inventory. If the buyers have no other options, they just might accept the refusal and proceed with the transaction. If on the other hand, they have other options available, they may be inclined to terminate the contract and move on to the next property.
    2. Agree- If the requests are reasonable and within your ability to fix, by all means just do it. This keeps the transaction moving forward and eliminates the need to go back on the market and starting the entire marketing process over again.
    3. Partial Agreement - It is certainly reasonable in most cases to agree to pick and choose which items to address. For example, you might choose to only agree to fix health and safety issues, while rejecting other requests that don’t fall into this category. This option leaves the buyer with the option to walk away from the deal but in the event the requests are excessive, it might be a good option.
    4. Compromise - This is also called an alternative resolution. In this scenario, you would try to find some reasonable middle ground. Maybe split the cost of the repairs or offer the buyer a credit at closing. The idea here is to keep the deal alive without giving away the farm.
    5. Price Repairs In - Price the repair costs into your listing price. Get bids for repairs prior to choosing your listing price. Once you determine the true market value, use the bids to determine your actual listing price. Make it clear to the buyer that you are aware of the issues and have already priced those repairs into the price.
    6. Raise The Price - Ask the buyer if they are willing to raise their offer price to cover repairs. Depending on the purchase price and the buyer’s loan amount, they may be able to raise their offer without negatively impacting the appraisal.
    7. Reduce the Price - Offer to reduce the price in order to cover the verified cost of the repairs. In some cases, it’s just smarter to take a little less in order to keep the transaction alive.
    8. Homeowners Insurance - See if any of the requested repairs are covered under your homeowner’s insurance policy. For many of the major parts of your home like roofs and siding, your homeowner’s policy will cover repair and/or replacement. Read your policy before you reject any repairs, it may only cost you the price of your deductible. 

The inspection can be a major road bump in any real estate transaction. Keeping a cool head and an eye on the finish line can help make the entire transaction smoother and more lucrative. Remember, this is a real estate transaction and the goal is to get the property closed and sold. Emotions just make things more difficult.

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Joe Boylan

I have been a Colorado Springs Realtor since 1997 and as a first-year agent, I received the Real Trends Magazine, "Rookie of the Year" Award. Since then I have participated in hundreds of real estate transactions.

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