If you're one of those prospective home buyers whose base education is derived mostly from shows airing on HGTV, you may not realize the level of flexibility that often exists during the course of a sale. Institutional investors and all-cash buyers, such as the ones seen on Flip or Flop, can make more traditional shoppers feel as if their chances are slim. But the reality is that, in most circumstances, leverage is still very attainable.
In order to use leverage to your advantage as a buyer, it's important to have a solid grasp on the situation. The more aware you are of what the seller is seeking, the more likely you'll be to come to terms on an agreement that's favorable for all parties. Remember that, as the buyer, you may be in control of the home inspection contingencies, meaning you can dictate when it is conducted and how its findings affect the ultimate terms of the transaction. As the Washington Post recently detailed, however, it's important to play these cards carefully so that you can effectively compromise with the seller without frustrating them by delaying closing for too long.
Know what you want and don't be afraid to speak up
Perhaps most importantly, it's essential that the home inspection itself be well-researched, with its goals clearly outlined. This means choosing home inspections services professionals that are reputable, trusted and equipped to tackle the specific issues that may be presented by the property in question. Don't hesitate to ask questions and to be detailed in relaying what you want to see from the inspector's report. That doesn't mean you shouldn't allow the inspector to conduct things their way, but you are entitled to clarifications or elaboration when they seem appropriate. It is, after all, your long-term investment that is being evaluated.
Pick your spots
Especially if yours is not the only offer on the table, you can't mistake your leverage for the ability to contend with a seller on every point that's not to your complete satisfaction. Sellers are human and can become annoyed, so knowing which battles are worth fighting is a subtly important trait for any negotiator. In places where inventory is low, buyers are usually permitted to make an as-is offer while retaining the right to void. These are often attractive proposals for a seller - though they possess more leverage when supply is tight - because you're essentially saying that you will not ask them to pay for repairs after the inspection. You are, however, reserving your option for backing out of the deal if the inspection uncovers something you really don't like.
Consider credit options
In the same interest of making things easier on the seller - and therefore making yourself a more attractive buyer - you can forego the option of having a seller pay for and provide the contractor who presides over necessary repairs. Instead, credit in lieu of repairs can offer a convenient option if you're ready to move in and want to choose your own contractor. Having a broader level of control over the work being done in your future home offers peace of mind while also speeding up the closing process. You'll need to negotiate the appropriate amount of credit, and there may be restrictions imposed by your lender, but you will ultimately be afforded full disclosure in terms of who did the renovations and how they were done. Consulting with your real estate agent and the inspector who determines whether renovations are necessary will help you decide what's best for your situation, but it's always important to remember that you have options.
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