The real estate inspection is a key component of the home buying process. But what sort of inspections do you need? Is a basic inspection sufficient, or do you need to bring in specialists for things like a pool or a septic system? And then once you have all these inspections in hand, what do you do with them? Understanding this process can not only help you make an educated decision on whether or not to buy a particular property, but can also help you determine what repairs you want the seller to make, and what repairs you DON’T want them to make. Some types of loans will dictate this, but the inspections can also give you leverage in the negotiation. Watch this short video to learn more.
Hey there, it’s Debbie Wright with Charles Rutenberg Realty, serving Saint Pete to Clearwater and all of Tampa Bay, and I’m here talk to you today about six real estate negotiation tips after your real estate inspection, so let’s go.
Alright, here we go. Tip number one- you need to know what kind of inspection you’re going to get, and you need to hire a professional. Different types of inspections include general inspection, a termite inspection, a septic inspection, pool inspection, four-point inspection, wind mitigation inspection, you may need an additional roof inspection, or you may need a an air-conditioning inspection. All these are different types of inspections but most importantly, you need to understand what is going apply to your transaction. You may not have bought a house with a septic tank, so obviously you don’t need a septic tank inspection. Maybe didn’t buy house in the pool so you wouldn’t need a pool inspection, but but you get the point. And sometimes, the inspector can actually perform all these inspections, and other times these are multiple types of people. The idea here is to collect the type of inspections you going to on the property, your realtor will do that for you, and then schedule each inspection throughout the inspection period, as it stated in your contract.
So tip number two are the reports. All these reports you’re going to come in on the condition of the home, and so there’s going to be a lot of detail and it’s going to be super overwhelming, and it’s really important not to get too mired down in small little hundred dollar problems, but to pay attention and look for thousand dollar problems. You’re going to encounter deferred maintenance, it’s just sort of the way it is- we’re buying used and resale houses here Pinellas County. You maybe in a new construction situation and that’s a whole another video. But for on this particular video, we are talking about an existing house, and you’re going in and you’re inspecting that so that you can make an informed buying decision.
Okay, tip number three- most important, the four point. The four point is actually a subset of that general inspection, and it’s an inspection that is delivered directly to your insurer and it tells them the condition of the four points of your house- the roof, the air-conditioning, the plumbing, and the electrical. It’s super important for them because they want to know what that condition is because they are going to base your rates on it. It’s really important for you to also understand what the condition of those four points are, and that they are acceptable to you, because that’s where the thousand dollar problems can run into those particular areas.
Tip number four- repairs. Okay, so at this point you’re going to collect your costs, or at least what you think your costs might be- estimates for repairing certain items. You need to understand how those repairs are going to be looked at if you have a VA loan or an FHA loan- maybe there’s an electrical issue that needs to be addressed or a roof issue, whatever it is, you need to collect that data and understand how you’re going to move forward.
Tip number five- getting estimates. Your realtor can do this for you, but you do want to go ahead and get estimates if there are potentially thousand dollar problems here. And get them from professionals so that they can be submitted to the seller, because you’re about to go into a negotiation. If it’s a critical situation, especially if it’s based on those four points that we talked about- roof, AC, electrical, or plumbing- and it can stop you from getting insurance, the lender’s not going to lend you anything to buy anything if you don’t have insurance on the property.
Tip number six-negotiating. This is where you have collected all information and you’ve decided what you’re going to negotiate for, and it’s really important to understand where you are in this juncture of the agreement. Are you in a sellers market in a competitive situation? Does the seller have a backup offer that they would be much more likely to entertain and your offer? Maybe it’s higher, maybe that buyer has waived contingencies. Maybe you’re in a balanced market and don’t have to worry about that as much. Maybe you’re in a buyers market and you can start asking for all the things that you want. It just kind of depends on what kind of market you’re in, and if there’s a back up offer coming in behind you.
Also, are you asking for credit, or you asking for repair? This is an important point and I usually hit home to my buyers- it’s better for you to have control over the repair than to give set the seller control over the repair. Why you say that? Well, they go ahead and repair an item, and they’re going to repair it to their satisfaction. What if they encounter something and it isn’t a problem for them, and they move forward and make the repair? Whereas if you were in control, of the repair, you may make a different decision. I think in the grand scheme of things, especially in a purchase as large as a home, you want to be in control the repair, if possible. Sometimes you can’t. Sometimes the repairs have to be made before the transaction can even close, and therefore it is out of your hands, and it is something the seller will have to do. By and large, as a buyer you need to have control those repairs.
Also in that is what type of contract were we dealing with here? Was it an “as is” contract, did you waive any contingencies? What you need understand too is what is your break point? Where do you throw the towel in and say, “this house isn’t for us, we want to cancel, and we’re going to move forward.” So you need to understand that too before you start negotiating with the seller. Have all that laid out, so once your realtor goes in and starts negotiating on your behalf, she knows exactly, or he or she knows exactly how far to go, and obviously, you have agreed what your outcome’s going to be. but you’ve also possibly already agreed to what you are willing to accept, and what you are not willing to accept.
So I hope that helped. Those are my six tips, and I’m going to recap real quick. Number one- types of inspections. Understand how many different types of inspection you’re going to have to have for the property that you want to buy. You need to understand exactly what’s going on with that property; this is a big investment.
Number two- the reports. Don’t get overwhelmed with all the details, especially “hundred dollar problems.” Let’s try to focus on the “thousand dollar problems”, because of those are the ones that are going to come back and bite you you-know-where. So we want to make sure that we know every single thing we can know about that property as it relates to those four points, the major points.
That’s tip number three- the most important report, the four-point. So make sure that you fully understand the roof, the air-conditioning, the plumbing, and the electrical.
And tip number four- repairs. and understanding the cost estimates involved, and the scope of the work involved, trying to understand how it’s going to work with the loan type you have.
Tip number five- getting the estimates and then assembling everything together so that you can make an educated decision, and arm your realtor with all the negotiation information that they need to head back to the seller to see about getting a credit or price reduction, or a repair.
And then tip number six- the negotiation itself. Everybody wants a win-win outcome, and most of the time, sellers are willing to make repairs if they are not hundred-dollar nitpicky repairs, but they’re truly larger repairs that can actually impede the sale, whether you’re gonna buy it or not. So it’s important on how it’s presented to the seller, and then the negotiations go forth from there. So at that point, you just need to understand, is it going to work for you. or is it not going to work for you? Hopefully, you have a really good realtor that negotiate well for you and on your behalf, and can pull out a great credit or repair, and you can move forward in the transaction.
Alright, those are my tips. If you have any questions, please let me know. Leave them in the comments below, subscribe to my channel, you can also text, email, call, or Facebook Message me, and I’ll respond as quick as I can. Thanks so much, have a great day.