If you’ve bought or sold a house, you know that the routine includes a home inspection, which often identifies some problems with the house. Then comes the haggling, when buyers, sellers and real estate agents argue over who’s going to pay to fix the problems. And if it’s a new house, no matter how many defects it has, the builder will comfort you with this promise: “Every house in the development is built this way, we’ve been doing it this way for 20 years and the house passed code.” Well, over the last 20 years or so, I’ve witnessed thousands of haggle sessions. Most have been sensible and reasoned while a few have been surreal. I have seen people move into poorly built houses because they were afraid to reschedule the moving truck. I saw one customer walk away from a good house because the sellers wouldn’t fix the sprayer on the kitchen sink. Anyhow, I thought I’d share some thoughts on keeping post-home-inspection haggling to a minimum. If you’re selling a house, hire a home inspector before you put your house on the market. That way, you’ll get a preview of the problems the buyer’s home inspector will find. But don’t expect your home inspector to find every problem, and don’t expect would-be buyers to rely on your inspector’s findings. (More on this below.) Fix the problems your home inspector finds. Besides adding some value to your house, you’ll gain an advantage over other sellers who’ll try to sell their houses “warts and all.” If your house is in good shape when buyers come calling, you shouldn’t have to worry much about haggling. Whatever you do, don’t hide any problems that your home inspector finds. And don’t fudge any answers on your seller’s disclosure form. That can get you into serious legal trouble and cost you a pile of money. Before you put your house on the market, make it spotless. The best way is to hire a reputable cleaning company. If your house needs painting inside or outside, paint the offending areas yourself or hire somebody to paint them. The cost of cleaning and painting will help you get a better price for your house. Both are worth the money. Pack up the family memorabilia. Would-be buyers want to envision themselves in the house. They don’t want to envision themselves living amongst your vacation pictures and sports trophies. If you’re buying a house, hire your own home inspector. Don’t rely on the seller’s home inspection report. You don’t know if the seller’s home inspector is brilliant or ignorant, honest or dishonest. When you hire your home inspector, check his credentials. Ask about his education, ask if he’s been published and read a few of his old reports. Ask for customer referrals. If he offers to give you referrals from real estate agents, that’s a red flag, or at least a hot-pink one. As I’ve said before, many real estate agents’ guideline for a good home inspector is, “he helps me sell houses.” That’s not a quality you want in a home inspector when you’re buying. If you’re planning to buy a new house, shop around until you find a home inspector who’s well versed in the local building codes, and is willing to use the building codes to back up his findings. A home inspector who has no knowledge of the building codes and can’t back up his opinions with reputable sources is useless for a new-house inspection. Unverifiable opinions from your home inspector could lead to endless haggling. Hire a lawyer to look over your sales contract. The folks with whom you’re negotiating—sellers and real estate agents—don’t get paid unless you buy the house. They’re looking out for their interests, and rightly so. You need a lawyer to look out for yours. If you’re buying a new house, you’re crazy if you don’t hire a lawyer. Sales contracts on new houses are very seller-friendly. The ubiquitous one-year builder’s warranties are pretty much limited to things that never go wrong in a year’s time. Keep in mind that the builder isn’t off the hook after the one-year warranty period. Your lawyer can tell you how long the builder is liable for damages. (Last time I checked, it was four years.) If you buy a new house, get yourself a copy of Residential Construction Performance Guidelines for Professional Builders and Remodelers, published by the National Association of Home Builders (NAHB). You can order it online from builderbooks.com. The book is a fairly easy read and will cost you about $40. If you find problems with your new house, such as uneven floors, water in the crawl space, nails popping out of your walls and ceilings, etc., you can gently introduce your builder to the book and convince him to fix things. If he doesn’t convince easy, you can introduce him to your lawyer. Don’t take the negotiations personally. You don’t want to blow up your house deal with arguments about who ought to pay for cleaning the gutters or sealing the driveway. If you’re buying a house with, say, a dead garbage disposal, don’t expect the seller to buy you a new one. But if you’re selling, go ahead and get those nice buyers a new garbage disposal. It’s way cheaper than starting over with new buyers.
