The discovery of water damage is not always a deal-breaker. Assuming that the buyer does not want to just walk away, it should be possible to negotiate an agreement. That could mean you offer to pay for the costs to clean up the water damage and repair the source of it, or modify the sales price to reflect these costs. In this situation, the ball is completely in the buyer’s court, although your willingness to make things right could go a long way toward sealing the deal.
You should also consider having your own inspection done by someone you trust. Differences of opinion about the extent and cause of the water damage — and whether the issue could be part of a larger, ongoing issue — are highly relevant to buyer-seller negotiations.
It can also be helpful to speak with an attorney during the home sale process, especially if you knew about or suspected the water damage. Failure to disclose defects to the buyer could create a legal dispute down the road. It’s best to avoid problems later with a quick legal consultation now.