Purchasing a home is probably the largest financial moves a person can make. Buying a home is exciting and can be stressful. During the process it’s easy for home buyers to make mistakes during the negotiation process. As a NJ home inspector, I have seen buyers make many mistakes missing out on savings, overlooking red flags or just putting themselves in a poor position because they let emotions dictate their moves when buying a home.
As a New Jersey home inspector, I’m not a real estate agent. I don’t benefit from the sales price of the home in any way. My job is to represent the buyer and report on the condition of the home at the time of the home inspection verbally and in written form. Over the years I have watched lots of transactions come together or break apart. I have been exposed to what works and what does not work in the process. Buyers do make mistakes especially in the home inspection phase of the process.
Mistakes buyers can make:
Falling madly in love with the house quickly:
Buyers at times can get emotionally attached or involved. They see a beautiful kitchen, bathrooms or open concept. They then start picturing their family living in the home. This is fine until it starts playing on their emotions and possibly affecting their judgment. Emotions can make buyers make poor decisions. Emotionally attached buyers are less likely to negotiate in their best interest or possibly walk away if warranted. Buyers should try to keep themselves emotionally detached to the extent possible. When asked I tell buyers to pretend they are acting as a home consultant for another person or family. If they pretend they are working for someone else in the transaction they are less likely to get emotionally attached to the home too soon. It is also wise to hire an agent who can help you keep perspective. A good agent can direct you in the process and not allow you to get swept away by your dream house feelings.
Minimizing the home inspection:
Some buyers in today’s environment wave home inspection altogether or don’t take the home inspection findings as seriously as they should. Waiving the home inspection is like buying a car without every opening the hood. Every home has problems, some are larger and some are small. Buyers need a complete picture of the condition of the home they are buying. Even if they are not going to negotiate it is very helpful to have a home inspection as a tool for the future, so they understand what is coming up down the road as far as maintenance, repair and upkeep in the home. Home buyers should never waive a home inspection. When used properly a comprehensive home inspection will allow you to understand the homes conditions and possibly allow you to negotiate seller concessions that can save you some money down the road.
Having the seller present during the home inspection
Having the seller present can interfere with the inspection process and make all parties uncomfortable. The home inspection time is for the buyer. They are paying a lot of money for a home, and they should be able to conduct their home inspection free from seller interference. With the seller there the buyers may not be comfortable asking questions to the home inspector. Sellers often try to get involved and try to “help” the home inspector which leads to sellers’ interference and potential biases in the home inspection process. The presence of the seller can make the home inspector feel pressured not to point out issues in the home. This is especially true with new home inspectors. Sellers often get defensive when the home inspector flags an issue in the home. There are a multitude of reasons why a seller should not be at a home inspection. Buyers it is up to you and your agent to set the expectation and make sure the seller understands that they should not be present during the home inspection.
Assuming the seller will repair all of the issues:
The next mistake is assuming the seller will repair all the issues found. Buyers must understand the home inspection report is not a “to do list” that the seller must perform. The home inspection report is a tool used in making decisions. Often buyers will not ask for the right things to be fixed or credited. They will get hung up on the smaller issues found in the home. Getting hung up on smaller inspection items can sour negotiation. Buyers, especially in today’s market do not want to lose a home deal over smaller inspection items. Buyers should prioritize major problems, things that affect safety, structure and major systems like heating and air conditioning. Buyers should be strategic and choose their battles wisely especially in a challenging real estate market.
Buyers do not ask for the right kind or repairs or credits:
Some buyers ask for repairs without a full understanding of the meaning. Nonspecific repair requests can lead to confusion. We often see vague language in repair requests that lead to seller confusion about what issues require repairs. Without being clear and specific the seller will not be able to obtain accurate assessments and quotes. Vague requests can lead to later disagreements if the buyer is not happy with the repair that was performed. Often especially in today’s market environment it is more advantageous to ask for credits than actual repairs. If the buyer is going to ask for actual repairs, then that requirement must be detailed and fully explain the problem and what the buyer is asking for as far as a solution.
Allowing too many people to influence the buyers in the process:
Everyone will have an opinion, however not everyone understands your financial position, your goals and the specifics in the home you are purchasing. I have seen buyers walk away from solid homes because of family members or friends’ opinions. On the same token I have seen buyers accept major defects in homes because they did not want to upset the selling party. Take all advice with a grain of salt and rely on the trained professionals for their opinions. Listen to your inspector, your agent and if need be professional contractors. Attempt to filter all the opinions and the noise and make good decisions based on facts.
Not understanding the existing market conditions:
In a buyers market which is a market where the buyer has more leverage, sellers are more likely to negotiate on inspection items. In this type of market supply exceeds demand providing more leverage to home buyers. In the market that we are in today and will be in the foreseeable future where demand far outstrips the supply of homes on the market, buyers will not have a lot of leverage. The power today is in the hands of the home sellers. I have seen clients present the entire NJ home inspection report as a repair list. In this type of tough market, the seller will just move on to the next offer. Sellers have leverage and choices and typically they will have multiple offers to consider. If you negotiate too aggressively in this market, you could lose the house. On the other hand, if the market is soft and you don’t negotiate you could be leaving money on the table. Buyers can avoid this by working with an agent that has high integrity and one that understands the current market conditions. Once you have the inspection report ask your home inspector to help you understand and further clarify the major issues that were found in the home.
Attempting to win every point:
Some buyers treat home negotiations like a game where the goal is to win. A home deal is more like a coming together or a partnership. If you push too hard the seller may decline and move on to the next offer. Also, if you give in too easily you may regret it later. Buyers may want to stay firm on major home inspection issues and be more flexible with minor ones. Buyers should communicate clearly and most of all its not about winning or losing it is about working a deal that is smart and works for both parties.
Failing to re-inspect repairs:
When sellers have contractors repair items buyers often assume the repairs were done correctly. Many times, when home inspectors return home when hired to do a reinspection, we find that repairs are incomplete or not done correctly. Often the repair work is not done at all. As a buyer asking for repairs you are asking someone else to act with integrity and hold up their end of the deal. Often, they don’t causing delays or dissatisfaction. Once a buyer closes on the house the issues are theirs. It pays to get a reinspection if the issues are larger and the buyer has asked for repairs rather than credits. Having a re-inspection can help prevent a lot of drama and headaches down the road.
A comprehensive home inspection provides insight into what you are really buying. Done correctly the home inspection can help you negotiate, ask for credits or in some cases allow you to move on from the deal. To use it effectively buyers should approach the negotiation process with their eyes open and stay informed and calm. Buyers should think long term and ask their home inspector and their agent for their opinions. The goal in a real estate negotiation is not to have the seller repair every issue. The goal is to make sure you the buyer are making smart decisions. Good, seasoned long-standing New Jersey home inspectors can help you in this process.