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Asking for Price Reductions after a Home Inspection

Posted by Rachel R. Vanderveen on Thursday, September 20th, 2012 at 1:56pm.

There’s nothing more deflating than finding flaws on your home inspection, and suddenly doubting the price you paid for the home. Certain types of flaws definitely warrant a second look at the purchase price. There are times when it is entirely appropriate to do this, and there are times when it is neither helpful nor appropriate. Let’s go through a few examples.

When we go through a home with a home inspector, we are looking for all types of defects so that buyers can enter their home purchase with confidence---knowing exactly what they bought. However, we want to be especially mindful of material latent defects. These are defects which are hazardous, or potentially hazardous, and/or would involve great expense to remedy. These are usually defects which could not be easily uncovered by a basic visual inspection of the home. This is why home inspector is there---to give a deep and thorough look.

When we find these types of defects that we were not previously aware of, it’s certainly a good time to start thinking about the cost to repair these items. The homeowner must turn over the home and the attached chattels to you in full working order on possession day. (Unless you have agreed otherwise in the contract). So if something is completely broken, it must be fixed by the seller and at the seller’s expense before possession day comes up. It’s important to mention the findings of the home inspector to the seller to make sure they know exactly what they have to fix.

Now, I often get buyers who are shopping in character or older neighbourhoods, go through an inspection, and say, “Hey, these chattels are old and may be close to the end of their shelf-life. I want the seller to buy me new ones or take money off the price in order to replace them myself.” This sounds nice of course, but you have to remember that we’re comparing apples to apples here. If you’re buying an old home in an old neighbourhood, it’s expected that many of your chattels will be old. Your agent will have done a comparative market analysis and used properties which were also dated in order to come up with your purchase price. Yes, this home Woodbine has older appliances and older equipment, but we’re comparing it to other homes in Woodbine which also have older chattels. We don’t compare a home in Woodbine to a Home in Auburn Bay. That’s not comparable. We can’t expect to buy a brand new home in an old neighbourhood. So it isn’t reasonable to ask for money off of the price because a person would like new appliances. The agreed upon price that you already have should reflect the fact that the home is dated. You will likely not have a lot of luck getting the seller to lower the price or replace appliances if that is your reasoning.

I recently closed a deal in a very old home, which was practically in original condition. Once the inspection was complete, we found that the entire upstairs shower was completely rotted out, and that the foundation was cracked and had allowed moisture into the basement which had started to grow mold. When we came back looking for a price reduction, they agreed to fix the basement (it was a condo so it was all getting done at the expense of the condo corporation) but they said that the shower was reflective of the age of the house and would therefore not be fixed.

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(This is a picture of the mold which was forming in the basement)

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(This is a picture of the breeched tile in the shower)

 

That’s where I had to respectfully disagree. I pointed out that all the original flooring, the old appliances and drab window treatments were reflective of the age of the home. The shower, however, was a maintenance issue. Had they caught the breech in the tile sooner, it would not have cracked, allowed moisture in, and grown mold. The shower was now useless until torn out to the studs and remediated.

We won that round, and we received a significant price reduction based on the flaws that we found on the inspection.

In the end, everything on a contract is negotiable. When you finish a home inspection and you’re questioning the results, it’s a great time to talk to your agent about reducing that price if there are major concerns.


Rachel Vanderveen

The Vanderveen Team
Maxwell South Star Realty
Phone: 403.253.5678 Fax: 403.592.6736
Email: Info@VanderveenTeam.com

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