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Homebuyers always want to pay as little as possible for their home purchase; the time to do this is during price negotiations. Most buyers assume once the price is agreed upon and the deal is finalized but not yet. Depending on the home inspection report, an additional opportunity exists to renegotiate the sales price. Unknown to many buyers, home inspections can sometimes be used as leverage to squeeze further price concessions out of sellers.
Say you reduced the home price to cover repairs or renovations for the deal to close. Don’t be shy about asking a lot. If there is a significant problem, you can decide to walk away from the deal without penalty as long as the contract has not been countersigned. You can also ask for the price of the repair credited to you. Or have the homeowner fix the problem before the closing.
If you are still interested in purchasing the home, you should receive the repair cost and pursue fixing it yourself. The seller could also play hardball, at which point you will have to decide whether you still want the home.
You can take various actions, and we will discuss your options.
Major problemsMajor problems
You have a few choices if your inspector uncovers significant issues, such as faulty wiring, plumbing, or HVAC problems. This could be a problem if the needed work is extensive and the seller refuses to pay enough funds to remedy it. The expense is lower when minor problems crop up and presents fewer problems. If the seller is unreasonable, you can walk away without a penalty since, in New York, you complete a home inspection before making your offer or not long after its acceptance. As long as you do not have a countersigned signed contract, you do not forfeit your deposit.
The second option is to allow the seller to make the repairs or take money off the purchase price. Many people opt for this, which is the best option, with a couple of caveats. First, make sure that there are no other problems yet to be; discovered. Second, you need to have a complete and reasonable assessment and estimate. Otherwise, you are not negotiating with the full amount of information. You may wish to bring in a contractor to ensure you receive satisfactory answers to these questions.
When buying “as-is.”When buying “as-is.”
The third option is to eat the entire repair cost yourself. If you bought the property for an attractive price, you might decide it is worth paying the extra expense. Perhaps the seller knew there were problems and factored it into the price, usually if it is an “as is” sale.
Lastly, you could agree to some combination of the second and third options. The negotiation is conducted through your buyer’s agent and seller’s agent. The seller may decide to reduce the price; if you are responsible for the balance of the repair cost.
Condo and Co-op Inspection IssuesCondo and Co-op Inspection Issues
Condo and co-op apartments present unique circumstances. Dealing with a condo inspection is a more straightforward situation. Remember, you own the space inside the condo walls and are responsible for this area. Therefore, you negotiate with the sellers if your home inspection brings up anything inside the unit.
Co-ops can be more confusing. You own shares in a corporation and live in one of the units. You pay monthly maintenance fees, covering repairs in the back of the walls in the apartment and common areas. However, this does not mean you are in the clear and do not have to worry about an inspection. Significant repairs to the common areas, such as the lobby, elevator, or roof, get paid from the reserve fund or a building assessment. could be on the horizon. You want to have those areas inspected. You should also have the same inspection inside the apartment if it were a private home or condo. However, you may have to negotiate the repair cost with the board.
New buildingsNew buildings
We also advise ordering a home inspection on a newly constructed building. Newly built does not mean there are no problems. In fact, in the case of poor construction and when the building settles, things could get much worse. Shoddy materials or poor installation could still present issues. In this case, you negotiate with the developers if problems arise, or you can walk away again before a signed contract; otherwise, make sure to have the developer fix any repairs needed within the 12-month developer’s warranty after closing.
Home Defects: What can a buyer do?Home Defects: What can a buyer do?
Have you discovered home defects after a sale? You may have buyer’s remorse. It is a substantial financial commitment, and it is natural to have jitters. However, while it is not uncommon for minor issues to crop up, you may find that you need to conduct significant repairs. It can get tricky, and generally, you are out of luck, but you can pursue remedies in certain circumstances.
Property Condition Disclosure ActProperty Condition Disclosure Act
New York State’s Property Disclosure Act requires sellers to provide buyers with a disclosure statement. The key phrase is that the seller had to have known about the issue; you need to prove it. Should the seller omit defects they knew about; you can decide that the seller owes you damages.
Sellers typically provide a $500 credit to waive the disclosure statement requirement. If so, you are out of luck on this front.
The seller is liable to you in cases where you can prove fraud. It would help if you showed that the seller knowingly made false statements (written or oral, but the latter is hard to justify) or omitted material facts. Once you demonstrate this, you need to show that you justifiably relied on the seller’s statement or omission, which caused you harm.
Breach of contractBreach of contract
You can recover damages if the seller violates the agreement of sale. It would be best to show that the seller gave you a warranty regarding specific issues concerning the property’s condition. However, these typically expire at closing under the Doctrine of Merger. You need to specify that the provisions stay in place beyond closing and the delivery of the deed. We recommend consulting your attorney before closing to fully understand your options in case of a breach of contract.
Additionally, the standard contract contains an “as is” clause, making a breach of contract challenging to enforce since you have agreed to buy the property in the current condition.
Going after the inspectorGoing after the inspector
There are conditions where you can sue your inspector for negligence. If they failed to uncover a problem within the inspection scope and failed to report it to you, you can do this.
How to proceed with Home Defects Discovered After the SaleHow to proceed with Home Defects Discovered After the Sale
The first step is to check the disclosure statement. Next, review your purchase contract. If there is “as is” language, this makes your case weaker. Neighbors are a great source and can tell you if this is a long-standing problem.
Then, review your contract and inspection report in case the seller should have disclosed the issue. Bring in your contractor to assess the problem and provide an estimate. Once you have the information, follow up with a letter to create a paper trail, define the issue, why you think the seller or inspector is responsible, and provide a cost estimate. We recommend you consult a lawyer to proceed.