How to Negotiate Repairs After Your Home Inspection Reveals Issues

Don’t panic. This is a normal part of the home buying process, and you have options. Let’s walk through how to effectively negotiate with sellers when inspections reveal that work needs to be done.

Understanding Your Inspection Reports
Before you can negotiate effectively, you need to understand what you’re dealing with:
Home Inspection: This comprehensive evaluation examines the home’s major systems and structure, identifying both immediate concerns and potential future issues.

4-Point Inspection: Required by many insurance companies in certain states, this focused inspection looks specifically at four critical areas: roofing, electrical, plumbing, and HVAC systems.

Appraisal: While primarily determining market value, appraisers also note conditions that affect the property’s worth or make it ineligible for certain loan types, particularly FHA or VA loans.

When any of these reports reveal unaddressed repairs or incomplete work, you have leverage to negotiate.

Your Negotiation Options
Once you know what needs fixing, you have several paths forward:

1. Request Seller-Paid Repairs
You can ask the seller to complete specific repairs before closing. This approach works well for:
    •    Safety issues like faulty electrical wiring or structural concerns
    •    Items that insurance companies require be fixed before issuing a policy
    •    Repairs that lenders mandate for loan approval
Pros: Problems are resolved before you take ownership
Cons: You have limited control over contractor selection and repair quality

2. Negotiate a Price Reduction
Instead of having the seller make repairs, you can request a lower purchase price that reflects the cost of needed work. This gives you control over how and when repairs are completed.
Pros: You choose your contractors and oversee the work quality
Cons: You’ll need cash reserves beyond your down payment and closing costs

3. Ask for Closing Cost Credits
Sellers can contribute money at closing specifically designated for repairs. This is often called a “seller concession” and can be a win-win solution.
Pros: Reduces your out-of-pocket expenses at closing
Cons: Lenders typically cap seller concessions (usually 3-6% of the purchase price depending on your loan type)

4. Request a Combination Approach
Many buyers negotiate a mixed solution—asking sellers to fix critical safety items while providing credits for cosmetic issues or future maintenance needs.

What Issues Give You the Strongest

Negotiating Position?
Not all inspection findings carry equal weight. You’ll have the most leverage when addressing:

Safety Hazards: Electrical problems, structural issues, roof damage, mold, or gas leaks are serious concerns that reasonable sellers should address.

Lender Requirements: If your mortgage lender won’t approve the loan until certain repairs are made, the seller must fix these issues or risk losing the sale.

Insurance Deal-Breakers: When insurance companies refuse coverage until problems are resolved, sellers typically have little choice but to comply.

Code Violations: Current code violations may need correction before the property can legally transfer ownership.

Appraisal-Required Repairs: For FHA and VA loans especially, appraisers may require specific repairs before the loan can be approved.

Issues That Are Harder to Negotiate
Keep your expectations realistic. Sellers are less likely to budge on:

    •    Normal wear and tear
    •    Cosmetic issues that don’t affect safety or function
    •    Items you could have seen during your initial showing
    •    Problems typical for homes of that age
    •    Minor maintenance items

How to Approach the Negotiation
1. Prioritize Your Requests
Focus on safety, structural, and lender-required repairs first. Don’t overwhelm sellers with a laundry list of minor items.
2. Get Repair Estimates
Professional quotes from licensed contractors strengthen your position by showing exact costs rather than guesswork.
3. Consider the Market
In a competitive seller’s market, you may need to be more flexible. In a buyer’s market, you have more negotiating power.
4. Work Through Your Real Estate Agent
Your agent understands local market conditions and can present your requests strategically to maximize success.
5. Be Reasonable and Professional
Remember, the seller likely has emotional ties to the home. Frame requests factually based on inspection findings rather than as personal criticism.
6. Know Your Walk-Away Point
Decide in advance which issues are deal-breakers. If the seller refuses to address serious safety concerns, you may need to reconsider the purchase.

Special Considerations for Different Loan Types

Conventional Loans: Generally the most flexible, with fewer mandatory repair requirements.

FHA Loans: Have stricter property standards. Appraisers must note any conditions affecting safety, security, or structural soundness.

VA Loans: Similar to FHA with specific requirements for veteran buyers, including functioning systems and safe conditions.

USDA Loans: Also have property condition standards that must be met for loan approval.
Understanding your loan type helps you identify which repairs are negotiable versus mandatory.

Documenting Your Agreement
Once you’ve reached terms with the seller, ensure everything is in writing through:
    •    An amendment to your purchase contract
    •    Detailed descriptions of what will be repaired
    •    Deadlines for completion
    •    Right to re-inspect completed work
    •    Clear terms for any credits or price reductions

Never accept verbal promises. Proper documentation protects both parties and ensures your lender can process the loan correctly.

What If the Seller Refuses to Negotiate?
You have several options if negotiations stall:
Exercise your inspection contingency to walk away and receive your earnest money back (if your contract includes this protection).

Proceed with the purchase as-is if you love the home and can handle the repairs yourself.
Meet somewhere in the middle by scaling back your requests to only the most critical items.
Request an extension to get additional quotes or find creative solutions.

The Bottom Line

Finding repair issues during your home inspection doesn’t mean your dream home is a nightmare—it’s simply part of the process. Most sellers are willing to negotiate reasonably, especially on legitimate safety concerns or items that affect your ability to secure financing and insurance.

Work closely with your real estate agent and mortgage broker to understand your options and leverage. With the right approach, you can reach an agreement that protects your investment while keeping your home purchase on track.

Remember, the goal isn’t to get every minor item fixed—it’s to ensure you’re buying a safe, sound property at a fair price that you can insure and finance. Focus on what truly matters, negotiate professionally, and you’ll be holding those keys before you know it.

Have questions about how inspection findings might affect your mortgage approval? Contact our team today for personalized guidance through the negotiation and financing process.