- The Washington Times - Friday, November 1, 2002

Q: I am in escrow on a house. We had the inspection done yesterday. There are a few major concerns of which we were unaware. The largest is a faulty shower pan, which has been leaking for several years and has caused substantial damage to the subflooring.

What is the best way to handle this allow the seller to choose the method and company to repair it or have a professional estimate the costs, then ask for cash from the seller so I have control over the work? I would like to know the best way to negotiate an allowance (or discount off the sales price) for these items. I don't expect the house to be restored to perfect condition for me, but I have heard of parties negotiating on such items. Bill B.

A: Negotiating items from a home inspection is tricky business. Very quickly, a professional sales transaction can deteriorate to a preschooler-style argument:

"The roof needs replacing."

"Does not."

"Does too."

The reason this can happen is that home inspections are designed only to find defects and the current condition of a house not to find out who's going to pay for any repairs that might be necessary. Sometimes, too, just because the home inspector finds something that's not perfect doesn't mean it needs to be replaced now or the repairs must be covered by the current owner.

If the roof has worked for the seller during the past 20 years and it's not leaking or showing evidence of leakage, why should he replace it just because it might be "nearing the end of its life cycle," which is home inspector-ese for "Watch out, this needs replacing, soon." Usually, it does.

Let's face it, every piece of the house eventually will need replacement, so where do you stop? Just because it will need replacement in the future, that shouldn't be grounds for stopping a transaction.

Most mechanical parts of the house appliances, heat pumps, furnaces have roughly a 20-year life span, depending on the quality and warranty of the original. If the mechanical device is getting close to the end of that cycle but is still working, buyer beware but don't expect the seller to roll over and replace it.

If you have several items on your inspection sheet that are obvious defects, however, you have several ways to negotiate about them.

• Ask the seller to fix them. This usually is the first step. See if the seller will take care of the problem before you move in. It might depend on what other contracts are offering, and this is especially true in a sellers' market in which some contracts have eliminated a home inspection. However, the seller might be willing to pay for repair of some items. This is most prevalent if the item is something that the contract requires to be in working order, such as a plumbing or electrical item.

If your inspector found the defect, the next buyer's inspector will most likely find it, too, meaning it must be fixed.

• Put money in escrow to fix the defect once the transaction is complete. This would require an estimate from a licensed tradesman, depending on the extent of the damage. That amount of money would then be left in escrow to cover the costs.

One caveat for this scenario, however: Once the repair work begins, the contractor could find even more hidden damage more severe rot, more water damage, more of anything and the agreed-upon amount of escrow repair money won't cover the real expense.

Nevertheless, if you're talking a pretty basic repair, such as a new paint job or new carpeting, a cash amount left in escrow could cover the expense.

• Split the costs. Say you have found lots of rot on the back porch and you just can't pay for the complete repair job. Even if the seller is releasing the property "as-is," he still might be willing to split the difference with you on the repair just to get the transaction through.

The great thing about real estate is that everything is negotiable. If a home inspection finds hidden defects, keep in mind that they weren't obvious. The seller didn't know about them, either, and is likely not trying to hoodwink you into a bad deal. Negotiate with an open mind and willingness to get to the bottom line your new home.

M. Anthony Carr has written about the real estate industry for more than 13 years. Reach him by e-mail ([email protected]).

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