Buyer Asks for a Price Cut After the Home Inspection: Seller Options

Your buyer's home inspection found something, and now the buyer wants money off the price, repairs, or both. The condition in your agreement is still open and the deadline is close.

This article sets out the choices in plain terms, and how your disclosure duties affect them. How a condition works depends on the exact wording of your agreement, so have a lawyer read it before you reply.

Your three basic options

When a buyer uses an inspection condition to ask for a price cut, you generally have three paths. You can decline and hold your price, you can negotiate a change, or you can wait and see what the buyer decides. What the buyer is allowed to do depends on the wording of your condition.

Which choice is best depends on the size of the issue, how many other buyers are interested and your timeline. Those are business judgments, but the legal wording matters a lot.

Disclosure still matters

A seller's duty to disclose latent defects comes from case law, not from TRESA. A latent defect is one that makes a property unfit for habitation, dangerous or potentially dangerous, and that is generally not apparent on reasonable inspection. This duty stays with the seller whether or not an agent is used.

Patent defects, which a buyer or inspector can detect through reasonable observation and inquiry, generally need not be disclosed under the idea of buyer beware. But a seller who tries to conceal a defect may lose that protection, and a seller can be liable for a latent defect they did not know about if they were wilfully blind to it.

If you have an agent who knows of a fact you must legally disclose, the agent must disclose it to every interested buyer and use best efforts to get a written acknowledgement from each buyer who receives the disclosure. Whether a particular inspection finding falls into that category depends on the facts, so it is worth confirming with a lawyer.

Deciding whether to renegotiate

• Get the full inspection summary and ask what is cosmetic and what is a real safety or habitability concern.
• Get your own quote for repairs so you know the real cost before you discuss a price change.
• Consider offering a repair, a credit or a lower price, and compare each against the cost and risk of relisting.
• Be careful with anything you say about the problem; do not hide or play down it, given your disclosure duties.
• Check whether the problem could affect insurance or the buyer's financing, since lenders and insurers often ask questions.

Septic systems are a common example. Most household septic systems need a permit before construction under the Building Code Act, typically issued by the local municipality or health unit. The province advises buyers of a sewage works to request approvals, operation and maintenance records and past inspection reports, because a buyer becomes responsible for all obligations associated with it on purchase. Having those records ready can speed up a negotiation.

Put any change in writing

If you agree to a lower price or to fix something, the change should be recorded in a signed amendment that both sides sign, with clear terms about what is being done, by when, and whether the condition is being removed. A verbal promise or a text message can lead to arguments later.

If the buyer is using an agent and you have none, remember that you are a self-represented party, and the buyer's agent cannot advise you on price or terms. RECO recommends independent professional advice in that situation.

If more inspections are needed, access to your property without your agent present requires your written consent, and access beyond what you expressly authorize may be treated as trespassing. Keep any consent specific about who, when and for what purpose.

What to do next

• Read the condition in your agreement and note its deadline and how it can be waived or ended.
• Review the inspection report with your agent or lawyer and decide which items are real concerns.
• Get repair quotes before you decide how to respond.
• Decide in advance your lowest acceptable outcome, and whether you prefer a credit, a repair or a price change.
• Have any amendment reviewed by a lawyer before you sign, and keep copies of everything.

Frequently asked questions