At the end of the day we decided to negotiate w/ the seller on the cost of the upgrade to get them into compliance.

We just did this as a seller on some of my new builds.. we sold 3 in the last few week and I negotiated commission on all of them.. a little different for us here in Oregon as these are new builds and folks ask for upgrades.. so like on one I said sure we will upgrade to Hardwood throughout but we are not paying a broker fee to your agent you will need to pay them.. well they passed on the hardwood and we agreed to pay their broker 1%. thats how it worked out.. in the higher priced markets its going to put buyers agents on the spot. because if sellers say we will pay 10k which is about 1% and buyers agents are used to getting double that they will have a hard time talking to their buyer who still thinks 10k is a big pay day and wont understand why the agent thinks they are getting shorted.. 

It seems to last forever and the tenants like the upgrade from carpet.

Cities that require each:Soils reports ($6-7K for report & required work): Carlsbad, Chula Vista, Encinitas, La Mesa, National City, San Marcos, VistaStorm water management ($5-7K): Del Mar, Encinitas, VistaBuilding Verification Survey ($3-8K): Del Mar, Oceanside, San MarcosUtility upgrades are also a very important consideration, and City of SD in particular is enforcing more requirements than they have in the past, e.g. water fixture counts and requiring ROW work to upgrade.

Contacted PGE for upgrading my main panel, they are asking me to have separate main panel meters because the ADU has a separate address..

In addition, we're forced to pay ~1k/ month to help pay for the CAM upgrade fees. 

Added cheap square footage and improved features - ie. additional bedrooms, quality outside space, and upgrades throughout

If you want to negotiate prior to contract, most builders are going to do everything in their power to avoid dropping the price...this could mean paying closing costs, pre-paying HOA dues, buying down your rate, giving options/upgrades at no cost, etc...basically anything that is going to allow them to keep the recorded price elevated.Even in down markets we are still trying to show price INCREASES phase over phase, even if that means giving away more in concessions on a case-by-case basis to get deals done.

I will say for myself, I'm fine paying $X to install a faucet (for example), but when it is broken down into $A for travel, $B for labour...it bugs me-stupid, I know, but I'm being honest. 

My wife and I own a two-flat in Chicago, and we're planning to upgrade our heating system.