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Can you negotiate renovations into a home purchase?

If the home you want to buy needs work, you might be able to negotiate renovations into the purchase. Here are some tips for reaching a successful compromise.

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Jean Folger

9/27/2022 · 3 min read

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Key takeaways

  • If an inspection reveals significant issues, a seller might be willing to make repairs, offer a closing credit, or reduce the price.

  • Sellers might be unwilling to negotiate if they already factored repairs into the list price.

Thinking about buying a home that needs some repairs or remodeling? You might be able to negotiate renovations into the home purchase. Whether the house needs a new roof or new wiring, here are tips to consider before approaching the seller.

Determine which repairs you think are needed

A home inspection can be a great way to determine if repairs are needed. It can reveal some problems and safety issues and help you understand a home’s condition (and what you might be getting yourself into). Though an inspection isn’t guaranteed to catch everything, some of the more common issues an inspector might find include:

  • Drainage. Improper surface grading, water damage, and mold.

  • Electrical. Wiring that’s frayed or not up to code and improperly wired electrical panels.

  • Foundation. Cracks, sloping floors, water damage, and structural damage.

  • Health hazards. Mold, lead paint, asbestos, radon, and carbon monoxide.

  • HVAC. Leaks, faulty wiring, clogged drains, unlevel units, poor ductwork, and old age.

  • Plumbing. Leaks, water damage, sewer problems, faulty water heaters, and polybutylene pipes.

  • Roofing. Leaks, missing or damaged shingles, and old age.

  • Termites and pests. Infestations and structural damage.

  • Windows and doors. Drafts, leaks, broken locks, and faulty seals.

Decide if the repairs are necessary or cosmetic updates

Many homes can have issues — whether they’re brand new or 100 years old. Try to narrow down your repair list to major defects that would cost a lot to repair, crossing off the smaller problems you could easily fix yourself.

If the seller didn’t already factor in the home’s condition into their requested list price, they could be open to negotiating if there are serious defects or safety issues, such as a cracked foundation or faulty wiring. However, they may be less accommodating if you’re after a kitchen remodel because you don’t like the dated cabinets and counters. 

Estimate the repair costs

Once you narrow your list, one of the next steps is estimating repair costs. After all, if you plan to negotiate with the seller, you need to know what you’re asking for. Your real estate agent may be able to offer a ballpark figure or recommend a contractor who can provide a more detailed estimate. 

If you plan on doing the renovations yourself, you can use the estimate as a starting point or create your own budget if you know how. 

Negotiate (nicely) with the seller 

Once you have a list of repairs and an estimate in hand, you can ask the seller to make some or all the repairs, give you a closing credit, or lower the asking price. They may be more willing to negotiate if you are reasonable, understanding, and not demanding or insulting. Repairs often come as a surprise to the seller, who may have had no idea they were living with, say, scary wiring and termites.

 Remember, the seller is not obligated to make repairs or lower the price. So, if you’re far apart on price, you can walk away if you have an inspection contingency. Alternatively, you might decide the repairs aren’t worth losing the home over and proceed with the purchase.

This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice. Opendoor always encourages you to reach out to an advisor regarding your own situation.

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Jean FolgerAuthor

Jean Folger is a researcher, editor, and writer with more than 15 years experience, specializing in real estate and personal finance. Her goal is to help people make better financial decisions, so they have more money and time to spend on the things that matter most. ​In the past, she has been a real estate broker, an English teacher, and a trip leader for an adventure travel company.

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Jena GreeneEditor

Jena Greene is the Managing Editor at Opendoor. She covers real estate, personal finance, money management, and market best practices. Jena is passionate about empowering people to find their dream homes and making the home-buying process a delightful one.