By Tali Wee
Whether you’re buying a newly constructed home or an existing home, you’ll inevitably want to change or upgrade some aspect of the home before you close. Below are three tips to achieve this goal without leaving anything to chance.
Know What You’re Looking for in a Home Inspection
An existing home will always have some wear and tear. It could be a truly small issue like nail holes in walls from pictures. Or it could be something that seems small like an odd smell, which could eventually be revealed to be a large mold problem inside the walls.
To properly determine the condition of the home, start with this basic home inspection checklist. After this, you’ll need a licensed contractor to inspect the home, which costs $200 to $1,000 depending on your market, home size and the level of inspection detail you request.
Ask your real estate agent to initially examine the property with you, and ask them to recommend a suitable inspector.
The document you use to write your offer–often called a purchase contract–will include an inspection contingency. Make sure you use this contingency. It allows you to choose how many days you want for an inspection, and allows you to cancel the contract and fully recover your deposit if the inspection reveals items you don’t like.
A new home might seem idyllic because there’s no wear and tear, but new homes might not come with basics like glassed-in showers, built out closets or complete lighting fixtures. If you’re buying directly from a builder (instead of using a real estate agent who’s representing only you and not the builder), you should hire your own inspector to examine the project.
Negotiate Repairs After Home Inspection
If your inspection reveals items you don’t like, but none are deal breakers, you can negotiate for repairs or closing cost credits.
If there are items that impact daily life like leaky sinks or tubs, push for those to be repaired before you close. When it comes to other items like broken stoves or refrigerators, your mortgage lender will require their appraiser to verify that a kitchen is fully functioning prior to close, which helps your negotiating power.
If there are smaller items like scuffed walls, damaged floors or broken interior doors, you are often more successful asking the seller for a closing cost credit rather than asking them to make the repairs. But remember that lenders don’t allow seller credits to exceed your closing costs, so if the deferred maintenance you’re negotiating exceeds your closing costs, you might also have to ask for a price reduction.
Negotiate Upgrades Before Releasing Inspection Contingencies
If your inspection or appraisal reveals anything you want to negotiate, do not release your contingencies (purchase contracts have the same contingency period for appraisals as they do for inspections). Doing so will compromise your negotiating ability because the seller will know they have a claim to your deposit if you cancel a contract after releasing contingencies.
Tali Wee is a Marketing Content Specialist at Zillow.com. She writes about personal finances, mortgages, and home improvements for the Zillow Blog and other Zillow partners.
Views expressed are the personal views of the author, and do not represent the views of the National Foundation for Credit Counseling, its employees, its members, or its clients.