For several years now, I’ve been teaching agents a tip on how to deal with home inspection negotiations. I’ve been involved with several nightmare situations in which the buyer was dissatisfied with the home’s preparation, which led to an unhappy time for both sides of the transaction. Today, I want to pass that tip onto you so that you can better prepare your clients for dealing with these situations or avoid them altogether.

These types of frustrations all stem from not setting up expectations correctly on the front end. When I’m holding either a listing presentation or a buyer consultation, I set up the expectation that, once we get to home inspection negotiations, we’ll settle on using one method of handling it—credit.

It’s simple. I tell my buyers that we’ll find an inspector who will come in and quantify all the issues and give us a figure of the cost to fix them, and then we’ll demand a credit in that amount from the seller’s list price. This way, the buyer will be able to use their own trusted repair person to fix those issues to their standards, and they won’t be without leverage during the transaction.

“I set up the expectation that, once we get to home inspection negotiations, we’ll settle on using one method of handling it—credit.”

On the seller’s side, the seller will have an easier closing and no liability regarding the contractor hired to fix the repairs. If the buyer picks a repair company who does a shoddy job, it’s on the buyer, not the seller. This will help you avoid any nasty confrontations or potential lawsuits.

This method has worked efficiently for me. There isn’t a lot of back-and-forth during the negotiations with respect to the wording of the addendum.

In response to my method, I’ve heard the question: “What if we’re an FHA buyer and we’ve already maxed out our seller assistance?”

There, you have two options:

1. You can reallocate the transfer tax from one party to another. If you’re the seller who’s paying the transfer tax, just switch that number from the buyer to the seller.

2. Make a check out to the contractor. I believe that it’s acceptable in most jurisdictions to make out a check to the contractor for the repair amounts but double-check with your legal counsel to be certain.

If you’d like to hear more about this technique, feel free to reach out to me. I’d be glad to help you.