Requesting Home Repairs? For Many, It’s Time to Ask for Everything

Home inspections are back. At the height of the home-buying frenzy, many buyers opted out of a traditional home inspection to make their properties more appealing to sellers in a competitive market.

Now, as the market shifts, home buyers are getting bolder. They’re scheduling detailed home inspections and asking sellers to make repairs or pay for them. But how much is too much to ask for?

“My advice now is to ask for everything,” said Ben Stern, managing broker of Buyers Edge Co.’s Dupont Circle office in Washington, D.C. “In 2017 or so, buyers typically asked for repairs only on items that impacted their health and safety or that were difficult to handle. Today, buyers in some cases can ask for every single thing the inspector flagged as something to repair or replace.”

However, this advice isn’t ubiquitous, Mr. Stern acknowledged.

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“In some neighborhoods, we’re still seeing bidding wars so the tactic of doing a pre-offer home inspection and making an offer without contingencies still applies there,” he said. “But in less-competitive neighborhoods buyers are successfully offering 10% less than the list price, and having a full-blown home inspection with the right to void their offer and the right to negotiate.”

Most home inspectors provide a report with a list of findings that require immediate repair or replacement, another list of items to monitor and maintain, and possibly a suggestion to request more information from the sellers about the age of an appliance or system, Mr. Stern said.

“If the inspection report lists 50 items across all three lists, then buyers can ask for what’s most important to them,” Mr. Stern said.

The middle ground of getting an inspection that has a “void only” contingency rather than negotiating on specific items may work in some markets where competition exists but at a slower pace, he said.

“Right now, sellers are accepting offers with a home inspection and negotiations because they know if they don’t, they may have to put their house back on the market,” said Nina Hatvany, an agent with Compass real estate brokerage in San Francisco. “The next buyers are likely to find the same issue, so they may as well give the first buyers a credit and move on.”

Home Condition and Pricing

There are nuances to how much buyers should ask for from a seller, particularly in a shifting housing market that isn’t clearly skewed toward buyers.

“The buyers need to ask their agent if the house they want to buy is correctly priced,” said Kimberly Jay, a broker with Compass real estate brokerage in Manhattan. “They need to know if the sellers took into account that there may be issues with the property or that the home is older. If that’s already factored into the price, then the sellers are not likely to negotiate on anything.”

The ability to negotiate about repairs also depends on the community dynamics.

“Some buildings in Manhattan don’t have any buyers even looking, while in others that are priced well or have great light or a great location there are multiple offers,” Ms. Jay said. “If you want the property a lot, maybe you don’t ask for anything.”

The exception is when a problem is a safety issue. One of Ms. Jay’s clients asked the seller to repair a window that slammed shut, which they did immediately because it was unsafe.

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Repair or Provide Credit

If you decide to negotiate about repairs after a home inspection, you may want to ask for credit at the closing from the sellers rather than for them to hire someone themselves.

“I always suggest negotiating for credit rather than asking the sellers to do the work,” Ms. Hatvany said. “The incentives are all wrong for the sellers since they are the ones leaving the house. Unless it’s something really simple, it’s better for the buyers to hire a contractor of their choice to do the work to their standard. They can also make choices along the way rather than leaving it up to the sellers.”

The only downside to accepting credit rather than having the work done by the sellers is that the buyers must find contractors themselves and manage the project. But if there’s no urgency, they can wait until they move in to start.

One of Ms. Hatvany’s recent buyer clients had a home inspector point out that the exterior of the house had some dry rot that needed repair and that the exterior needed painting. The sellers immediately agreed to take care of it. In that case, since it was basic maintenance work, the buyers agreed to have the sellers handle it before the closing.

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“In a big house in the Hamptons, my buyers wanted the sellers to replace all the windows,” Ms. Jay said. “The sellers gave them a large credit for it because they were eager to sell.”

If you accept the sellers doing the work before the closing, you must insist on their using a licensed contractor and providing you with the receipts, Mr. Stern said. That way, if anything goes wrong later, you have recourse against the contractors.

“I like to submit a repair addendum to the contract asking the sellers to repair or replace an item with a licensed contractor with documentation five days before the closing or to provide a credit,” said Mr. Stern. “That gives the sellers the illusion of choice, but almost always results in the buyers getting a credit.”

Every buyer has the right to a home inspection and to negotiate on items that need to be repaired or replaced. How much you ask for depends on whether you are in a competitive bidding situation and your level of desire for the property. Your real estate agent can provide the best insight into whether you should ask sellers to address inspection issues—and how much you can request without jeopardizing the deal.

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