Should I ask for a price reduction, a credit or a repair?

So you’ve conducted your home inspection, and now it’s time to negotiate with the sellers regarding disclosed issues on the inspection reports.

What is best to do?

You could ask for a price reduction in the house – easy if it’s a cash purchase…a little trickier if you are getting a loan/mortgage on the property.

A price reduction for a cash purchase is sometimes the easiest and the quickest way to closing.  There are no loan amounts to be adjusted and approved by a lender.  You can close quickly as there should not be any further contingencies in the contract unless you are obtaining a cash appraisal on the home.  The other advantage is, you are not depending on the seller to perform the repairs with their own contractors.  This is an important thing.  This can be good or it can be not favorable to your position as a buyer.  The good news is you get to hire your own contractors are your own pace and your own timeline and do the repairs after closing to your own standard.  The challenge may be that the repair cost may have been underestimated.  This is a risk.  The plus is you are in control of the job.

 Leaving it up to a seller to do the repairs can be a guarantee that they are performed, that the cost is being borne by the seller, but it could also delay closing and the contractors chosen for the job may have been up to the seller. 

Asking the seller to perform the repairs before closing, especially if you are obtaining a loan for the property, may delay closing and this may cost you in an interest rate lock or inconveniences regarding timing.  In a busy real estate market, contractors are also backed up and you don’t want anything but a licensed contractor (and in New Mexico this means having a contractor’s license as issued by the Construction Industries Division.  Be sure and plan for any possible delays and this includes informing your moving company that there may be changes to your schedule, utility companies in case you have contacted them about your upcoming move, your landlord, or your home sale if you are selling the home you are in to purchase the new home.

What repairs should be considered important enough to delay a closing?  That is strictly up to you, but health and safety questions obviously weigh more heavily than broken window screens, adjusting door knobs and adjusting a rocking toilet.  A new roof could possibly delay a closing for weeks, and broken sewer line could delay your closing date a week or two.

Remember – if you have gotten as far as the seller agreeing to give a concession for the repairs you have requested, you are fortunate and over the biggest hurdle in the transaction!  See what works for you, calculate your best way to the finish line, and start enjoying your new home!