{"id":133811,"date":"2021-01-20T10:00:54","date_gmt":"2021-01-20T17:00:54","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=133811"},"modified":"2024-01-15T14:18:58","modified_gmt":"2024-01-15T21:18:58","slug":"negotiate-after-home-inspection","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/negotiate-after-home-inspection","title":{"rendered":"5 Reasons To Wait To Negotiate Until After the Home Inspection"},"content":{"rendered":"<p><iframe loading=\"lazy\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC9684953092&amp;light=false\" width=\"100%\" height=\"200\" frameborder=\"0\" scrolling=\"no\"><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">?<\/span><\/iframe><\/p>\n<p>For some reason, new (and wannabe) investors think that negotiating is really hard. And while I don\u2019t disagree with them, real estate negotiations, in my opinion, are simple and straightforward. That\u2019s probably because I don\u2019t even begin to negotiate until I have an inspection and\/or contractor\u2019s bid in hand.<\/p>\n<p>At this point, the property is already under contract and both the buyer and seller are posturing to close on the property. And since we have a list of issues and the costs associated with each, it is not emotional. It&#8217;s black and white and remarkably simple.<\/p>\n<p>The key here is ensuring that you include an <a href=\"https:\/\/www.biggerpockets.com\/blog\/2010-03-31-contract-contingencies-and-4-rules-for-using-them\" target=\"_blank\" rel=\"noopener\">inspection contingency<\/a> and resolution period in your contract. Whether you are using a real estate agent, working directly with a seller, making an offer on an official state offer form, or simply submitting a letter of intent to purchase, a contingency clause has to be built in for this to work. If it isn\u2019t, you will not have the power to negotiate and won\u2019t even be able to protect yourself.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/steps-simplify-home-purchase\" target=\"_blank\">6 Easy Ways To Simplify Your First Home Purchase<\/a><\/em><\/p>\n<p>With that, here are several reasons I wait until after the inspection to negotiate.<\/p>\n<h2>Benefits of Negotiating After a Home Inspection<\/h2>\n<h3>1. You\u2019ve got the sellers set on selling.<\/h3>\n<p>After you\u2019ve locked in a contract, typically the sellers will breathe a sigh of relief. The hardest part of listing a property is usually waiting and hoping that someone will make an offer. With a bound contract, the sellers will feel that they\u2019re making progress toward closing. And when it comes time to negotiate for repairs, the buyer has all the power and can essentially ask for anything they want. Because the seller knows that you can walk away if they don\u2019t agree, many tend to be willing to negotiate.<\/p>\n<h3>2. You can make your offer strong.<\/h3>\n<p>I almost always offer full price, maybe even more if it\u2019s a highly competitive market, and do all my negotiating during the inspection. This allows me to compete if needed and usually results in an awarded contract because I am offering the seller exactly what they are asking. There are other ways to <a href=\"https:\/\/www.biggerpockets.com\/blog\/7-tips-offer-accepted-hot-market\" target=\"_blank\">make offers strong<\/a>: quick closing, cash purchase, few or no contingencies, etc. However, committing to negotiating after the inspection allows a buyer to put forth a strong, competitive offer and move on to the due diligence phase. If you lowball the listing price or try to include several discounts in your initial offer, you risk offending the seller or not being awarded the contract.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/simple-process-assessing-reality-preparing-offer-sellers-market\" target=\"_blank\">How to Make an Offer in a Seller&#8217;s Market<\/a><\/em><\/p>\n<h3>3. You don\u2019t need to waste time on due diligence until you have a contract.<\/h3>\n<p>If you make your offer contingent on an inspection and resolution period, much of your due diligence can wait until you\u2019ve submitted an offer and it&#8217;s been accepted. This means that after preliminarily checking the numbers and with a general confidence in the property and the returns, you can make an offer and feel good knowing that if something does not turn out the way you expect it to, you can walk away from the contract.<\/p>\n<h3>4. You already have a solid contract locked in and now have complete control.<\/h3>\n<p>You can ask for everything you want and walk away if you don\u2019t get it. If you know what\u2019s important to you and what actually constitutes a deal-breaker (something you\u2019d be unwilling to concede), then you simply terminate the contract if the seller isn\u2019t willing to give you what you want. Since you are still within the timeline of your inspection and resolution period, you should have no issue recovering the earnest money deposit.<\/p>\n<h3>5. The possibilities are limitless.<\/h3>\n<p>After you\u2019ve determined what needs to be repaired, replaced, or further investigated, you can begin to put a creative solution together so both parties walk away content. You can ask for money off the purchase price, checks sent to vendors or contractors at closing, or even credit back to you in the form of cash following the closing. You can also ask the seller to make the repairs using licensed contractors before closing or any combination thereof.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"https:\/\/www.biggerpockets.com\/blog\/2015-01-21-negotiating-101-make-first-offer\" target=\"_blank\">Negotiating 101: Yes, You SHOULD Make the First Offer. Here\u2019s Why.<\/a><\/em><\/p>\n<p>In terms of a rental, my rule of thumb is, \u201cIf it ain\u2019t broke, don\u2019t fix it.\u201d But I still ask for the money as a credit at closing. So if an inspector tells me that the water heater or the HVAC could give any day, I generally ask for money off the purchase price. However, I don\u2019t make those repairs or replacements until the systems actually break.<\/p>\n<h2>The Bottom Line<\/h2>\n<p>So, get out there and start making offers! Once you have the property under contract, hire a good, reputable contractor and get bids for the work that needs to be done so you know what to ask for from the seller. Then, start negotiating. Decide what is most important, use a quality <a href=\"https:\/\/www.biggerpockets.com\/blog\/diy-home-inspection\" target=\"_blank\" rel=\"noopener\">home inspection checklist<\/a>, and be sure to have a list of things that are non-negotiable. That way, if negotiations begin to get tense, at least you can give a little bit while still getting the things that are important to you.<\/p>\n<p><a href=\"https:\/\/store.biggerpockets.com\/products\/sold-every-real-estate-agent-s-guide-to-building-a-profitable-business?utm_source=blog&amp;utm_medium=blog%20ad&amp;utm_campaign=soldlaunch\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-134120\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/01\/SOLD-banner.jpg\" alt=\"\" width=\"700\" height=\"120\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/01\/SOLD-banner.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2021\/01\/SOLD-banner-300x51.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><em>Do you agree or disagree with this strategy? If you disagree, what do you recommend instead?<\/em><\/p>\n<p><strong>Join the discussion in the comment section.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Negotiating the purchase price of real estate can be simple and straightforward\u2014especially if you wait until the inspection is complete.<\/p>\n","protected":false},"author":439461,"featured_media":127662,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7390,7119],"tags":[],"class_list":["post-133811","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-acquiring-property","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/133811","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/439461"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=133811"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/133811\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/127662"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=133811"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=133811"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=133811"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}