How to Price the Repairs on Your Inspection Report

Although a home inspection report can be intimidating, it's a powerful financial negotiating tool when purchasing a home. Here's how to understand whether a repair is a $50 or $5,000 fix.

Buying a property is a huge investment, so the last thing you want to underestimate is the cost of repairs. That said, most people are exercising their right to a home inspection before agreeing to purchase the home. That is a smart decision, but home inspections can deflate even the most optimistic buyer. The list of repairs can be long and full of details that could make or break a purchase. While a home inspection is an incredibly useful tool for buyers to know more about their home, including its appliances, the report doesn't tell the whole story.

Many buyers expect that the inspector will also provide estimates for repairs, but most simply won't. As neutral parties that are meant to offer a professional opinion about building codes and safety compliance, inspectors aren't to be confused with general contractors who make a living by fixing all the outdated or damaged items on the list. Because of possible conflicts of interest or just the fluctuations in labor costs, few inspectors will talk numbers.

person inspecting fireplace in empty room in a new house with potential homebuyers
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Instead, buyers should be prepared to have general contractors and experienced repair services on speed dial to prioritize repairs and comparison-shop for remedies. Doing so could put the buyer in an aggressive position to negotiate down the asking price or to see if the seller will pay for big-ticket items. Also, a frustrated buyer could walk away from the sale entirely.

Before going into panic mode, check out these three easy ways to figure out the price of everything on your punch list.

1. Rely on your real estate agent.

If your agent is really a local expert, she or he will know professionals in the trades needed to get the house into shape. They will also be familiar with which kinds of issues are common to the neighborhood or topography of your home. Brian Chinn of Newberry Real Estate in Texas says that it is important for buyers to set proper expectations when they are purchasing a home. The house won't be perfect; it would be unusual for an old home to be up to code.

"Most home inspections have to use the current code, 2020, to compare everything," Chinn explains. "So if you are looking at the report and it is talking about your electrical wiring, guess what? It isn't going to meet the current code if the house was built prior."

A good agent will see hundreds of these reports and can help bring the right people to the table in each of the key areas—electrical, plumbing, HVAC, flooring—where costs typically soar. For routine fixes, the agent might already have a rough estimate in mind and a trusted contractor in their back pocket.

Both options could give you a loose sense of the numbers, but it is important to remember that your agent is not a neutral party. They only get paid when you close on the home and, technically, this part of the process is your responsibility. That said, duplicitous agents might undersell the severity of an issue, and honest ones can miscalculate the cost. Both could result in inaccurate quotes that leave a new owner underwater. Although dumping this pricing task on an agent can seem like an easy solution, it isn't always the best.

When an agent offers to "call a guy I know" to mock up the costs, that is a referral. Some of these contractors will do this as a favor to your agent or in the hopes of getting your business, but others will send you a bill for the "call fee." These non-refundable fees are associated with time and travel costs to help diagnose the problem. Ask your agent before assuming this service is free.

2. Call your own contractors.

If the house is in a neighborhood you're familiar with, chances are that you have your own preferred handy person for small things and you know where to find pros for the big ones. Pick up the phone and call around to ask if these service providers would be willing to look at the inspection report. If they verbally agree to review the list, email it over quickly and identify the issues you care about most.

Since these documents can be lengthy, ask their help to prioritize. To get a speedy turnaround, skip over the fluff. But if you have more time on your hands or are new to the area, you might want to ask for their expertise on what is urgent in this region. For example, if seasonal flooding is a particular problem, these local experts will likely spot a drainage issue that you might have overlooked.

Very rarely do these phone calls or emails come with a fee, but the tradeoff is that the professionals can't take a detailed look at the house. From the document alone, they might miss the interconnectivity of issues on each floor or the quantity of materials needed to complete the repair. Either way, their guess is better than nothing.

The rule of thumb is to get three quotes. If you've got no clue where to begin, try the Nextdoor App, a neighborhood group on Facebook, or Angi, the website formerly known as Angie's List.

3. Go high-tech with AI.

For a variety of reasons, a hyper-local focus on a home repair team might be the wrong way to go. An out-of-state investor might not have the local knowledge. Or the inspection contingency period may be too short to wait for a contractor's personalized review. Instead, there are a variety of websites that use a combination of licensed vendor lists, geocoding, and online pricing analysis to craft a personalized price quote.

Patrick O'Sullivan, owner of getMULTIfamily in Phoenix, explains that "these online tools include Repair Pricer and other sites. All these AI-powered home inspection cost-calculating tools can quickly turn a home inspection report to an almost accurate and easy-to-read repair estimate."

Services such as Punchlist also offer to include pricing for a project manager, should the magnitude of the repair or remodel require it. Although these quoting tools tend to be free and fast to use, some homeowners find their overall quote to be higher than what's offered by brick-and-mortar shops.

Remember: The inspection report can save you money in the long run.

Receiving an inspection report can feel like opening a restaurant menu with no prices. Be prepared to go the extra mile to get the financial information needed to make an educated decision about your purchase. No matter the timeline or page count, figure out just how much time and money is needed to remedy the major issues on the inspection report. That knowledge can be leveraged to get the seller to make those repairs or offer credits that will offset the most costly issues.

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