How A Home Inspection Can Lower The Purchase Price Of Your Dream Home

March 9th, 2015 by Admin on

A home inspection doesn’t just help you to find out about dangerous and costly problems that exist within the property; it can also help you lower the asking price!

A home inspection is a vital step in the process of purchasing a home. This involves having a trained professional go in and evaluate the structure of the building according to a wide variety of criteria. This includes safety and structural issues, as well as potential water damage, plumbing, electrical issues, and even minor issues that can affect the value of a property.

Potential Problems

In addition, home inspections can make you aware of any potentially dangerous, or life threatening issues that might exist. Bad wiring can lead to fires, rotting walls can lead to collapses, and decaying floors can turn into sink holes which have the ability to do physical harm to your family. There are also more subtle problems such as the presence of mold, which can be less dangerous immediately, but which can cause long-term health problems for you and your family.

All of these factors are important for determining whether it is a good and safe idea to purchase a particular house. At the same time they can also be used as a negotiating tool in order to try and reduce the price of your dream home. Problems that turn up and potential issues that are uncovered can be used as negotiating tools to try and achieve more favorable terms with the Seller and rectify the issues.

Any contract that is signed between a Seller and Buyer should include a property inspection condition, allowing for negotiations to take place if problems are discovered after the process has started. This will allow the Buyer to either ask that the issues be repaired, or alternatively receive a credit so that they can undertake that work themselves. In some cases, they will agree on a combination of those two options.
According to Michele Lerner of “Your ability to negotiate depends on the way your contract has been written. In most cases you don’t have to agree to make cosmetic repairs. If a home inspection finds other problems, though, you are typically better off making repairs rather than having the Buyers walk away from the transaction.”

Negotiating Price

One thing that is important to keep in mind when you go into any negotiation over the price of a new home is the psychology of the person on the other side of the table. The Seller doesn’t want to have to reduce the price, or pay for costly repairs that can eat up even more of their profit.  And the Buyer also wants to make sure that they aren’t being taken advantage of. In other words, both parties want to ‘win’ the negotiation. Understanding that will make it easier for you to come to an amicable arrangement when trying to negotiate costs/reduction due to inspection issues.

If you are purchasing a brand new home then there may be a “no inspection” clause in the contract. This skews more towards the favor of the builders, however, it is often balanced out by the New Home Warranty. This is often acceptable, as new construction buildings should not have any defects, and if they do, then those are the responsibility of the building company.  To view what New Home Warranty covers, go to the Resources page at

With newer homes, there will generally be fewer problems, but an inspection is still necessary in order to determine if potential issues are starting to creep up. If only minor problems exist then you don’t want to get too bogged down battling over nickels and dimes with the seller. It may just be best to settle on a credit for the repairs so that you can move forward with the purchasing process.

When looking to purchase older homes the property may have significant damage, and may have to undergo extreme repairs to be restored to a livable state. In that case, you need to negotiate carefully with the Buyer, so that they take on the fair share of the cost of restoration to the home. In some cases, older homes will also sell for less than newer ones, due to the prevalence of issues that can arise over time.

Sometimes you will find a home being sold as-is. That means that any damage will be the responsibility of the Buyer once the transaction is complete. In situations like that, you should add the estimated cost of repairs to the actual price of the home, as that will be how much you actually have to expend to make the home livable. It is still advisable to get a home inspection so that you can determine the issues and the reparation costs involved.

Depending on your preferences and DIY skills, you may want to simply negotiate a fair reduction in price and then handle the repair process yourself so that you know the work is getting done exactly as you want it. Whichever way you choose to proceed, being informed and having knowledge on your side before releasing conditions and signing the mortgage papers gives you true buying power.

To serve our clients better, all Realtors at Greentree Real Estate Group have specialized training in New Home Construction and Buyer Representation. We work closely with Home Inspectors in our Region and would be happy to recommend them to you.

For more information, please contact us at or go to our website at

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