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Home Inspection Contingency | The BEST Way to Negotiate the Home Inspection Contingency - YouTube
Channel: Matt Leighton
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How’s it going everyone Matt Leighton and
welcome back to another video.
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In this video we’re talking about the home
inspection.
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Ahh, the home inspection, the most exciting
part of the home buying process.
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Okay not really.
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It can actually be one of the more stressful
parts of the home buying experience because
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well you find out how healthy the property
is.
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It’s almost like going to the doctor for
a physical for the first time in 10 years.
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Maybe you have an ache or a pain or maybe
you feel amazing but you know the doctor is
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still going to find out something about you
that might be a cause for concern.
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The home inspection is kind of the same way.
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Whether it’s a 500 square foot condo or
a 5,000 square foot mansion, the home inspector
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will discover imperfections and faults with
the home that you will most likely want to
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get fixed.
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So what do you do next?
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Well in a perfect world.
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You as a buyer will submit the home inspection
contingency and report to the sellers that
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outline the items that are broken or need
to
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be fixed and
the seller will say, ‘ahh geez, these items
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are broken, I better fix every single one
of these’.
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No that almost never happens.
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It becomes a negotiation and the seller may
or may not decide to fix the items.
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But for the sake of the argument, let’s
say they agree to fix the items in the home
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inspection.
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This could be as minor as caulking, yes I’ve
seen people put calking on the home inspection,
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or as major as an electrical issue or roofing
issue.
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But let’s say the seller does fix it.
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You as a buyer should be happy right?
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Well let’s think about it for a second.
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As a buyer, if you were fixing the items,
you would probably go out and get 3 estimates
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from a contractor, choose the middle one or
get a referral for a handyman, double-check
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the work has been done up to your standards
and be happy with the finished product.
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Well what do you think the seller is planning
on doing for fixes?
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You think they’re going to go out and get
3 estimates and pick the middle option?
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No!
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They’re going to go out and find the cheapest
contractor they can find to do the bare minimum
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to satisfy the contingency.
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Why would the seller spend a lot of money
on these fixes?
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They’re going to find the lowest option
out there.
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There’s going to be very little emphasis
on quality.
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So when you go for your final walk-through
inspection, that drywall might be repaired
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but it might be a sloppy job.
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Then what a day before closing are you going
to ask to delay settlement to get a better
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drywall handyman in there to fix the job?
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Probably not.
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Which brings me to the better alternative
for home inspection repairs.
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Money!
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Money in lieu of repairs.
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This way you as the buyer after closing you
get to choose your own contractor, get to
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oversee the work, and get to ensure that the
job is done.
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Well what if I don’t know how much a project
costs and then I have to estimate?
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Well there’s this little machine called
the google that can help you out with predicting
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pretty much any expense.
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And how many contractors offer free estimates?
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Hmm, I don’t know?
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All of them…
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Asking for a credit instead of repairs is
significantly better for both parties because
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now the seller doesn’t have to run around
and fix a bunch of small items and waste their
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time making sure that the fixes have been
done.
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When you are faced with the option, as a buyer,
or seller for that matter, on whether to propose
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fixes to a home or a buyer credit, I highly
encourage you to go with the credit option.
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Believe me, it will save you time, money,
and a potential headache on that final walk-through.
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Now one final thing, if you as a buyer must
ask for repairs and there’s no other solution,
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write in the addendum that receipts will be
provided 7 days prior to closing.
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You will be shocked, actually you probably
won’t be shocked to hear that some sellers
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forget, or let me re-phrase that…some sellers
‘forget’ to do the home inspection repairs.
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And guys, I love surprises but in real estate,
there are no good surprises.
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Only bad surprises.
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And the last thing you want is when you go
to the final walk-through to find out that
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none of the items have been fixed.
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So guys, please opt for a buyer credit on
the home inspection items.
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If you have to do repairs, ask for receipts
7 days before closing and you will save yourself
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a lot of stress.
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Thanks for watching.
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Until next time, create a productive day.
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Take care.
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