By: Ryan C. Benton
Whether you’re searching for a home or selling one you currently own, the home inspection can be one of the most stressful and frightening parts of the process.
Before you get too worked up, take a deep breath and realize that no home inspection will yield perfect results.
But some inspection reports are more concerning than others. It’s important to know if an issue is a minor repair or a money pit and for buyers and sellers to deal fairly through the process.
What is a home inspection?
Home inspections are a vital part of the home-buying process because they help the buyer avoid any surprises with the property they are purchasing. Generally, the inspection mainly looks at the following:
• Grounds for possible water-intrusion problems
• Structure for foundation, window or door problems
• Exterior for rot, decay and excavation problems
• Roof for shingle, flashing and fascia problems
• Interior for framing, insulation, HVAC, plumbing and electrical issues
• Kitchen for electrical code compliance, operating cabinets and plumbing problems
An inspection of a typical house can take two or three hours; larger homes with multiple bathrooms and two or three HVAC systems will take longer. After the inspection, the buyer typically receives a comprehensive report with photos, which can be used to negotiate repairs with the seller if their contingency allows.
After reviewing the report, typically the buyer will have to decide whether to negotiate with the seller or to walk away. No matter how bad it seems, it’s important for both buyers and sellers to remember that everything is fixable. But of course, it depends on the budget and the parties willingness to take on whatever the project may be.
The buyer’s perspective and expense
Home inspections are an opportunity to evaluate a home before you buy it.
Because let’s face it, buying a home is a huge investment, and you can’t exactly read online reviews to get a sense of any problems that might pop up once you’ve signed the deed at closing.
Buyers typically pay for home inspections, which can cost between $350 and $600 depending on the size and age of the home. Paying a few hundred dollars now is certainly worth the peace of mind to avoid a costly expense down the road.
So, consider your home inspection mandatory. That’s why your Realtor will likely make sure it’s included as part of the purchase agreement.
Home inspection tips for sellers
After working so hard to attract buyers with a move-in-ready home, the last thing a seller wants is to lose a sale. So, if your home inspection turns up flaws that the potential homebuyer wants fixed, what then?
Rest assured there’s not always the need to fix everything a home inspector thinks could stand for improvement; a home inspection report is not a to-do list. Work with your Realtor to understand what items you should tackle and where you might want to push back.
You’ll want to be reasonable. After all, you’ve already put a lot of time into the selling process, and it’s likely in your best interest to accommodate some repairs rather than allowing the buyer to walk away.
Also, depending on the magnitude of the requested repair, it’s not likely to go away. I once had a seller who let a deal fall apart over some electrical work only to have it pop back up with the next buyer’s inspection. Eventually, they agreed to the repair — but ended up with a lower price.
A major fix may feel out of reach if your money is tied up in the home’s equity, but you can still bring options to the table. Work with your Realtor to gather a few professional quotes for repairs that can be paid at settlement. In lieu of repair, you may also consider adjusting the terms of sale, such as offering the buyer a reduced sales price or closing cost assistance.
What can the seller offer the buyer in lieu of repairs?
There are a few things that sellers can keep up their sleeves to smooth over nonessential repairs in the inspection report. Sometimes it pays to get creative to keep the sale on track.
• Offer a one-year home warranty. This can come in handy if there is an element that doesn’t truly need repairs but is still worrying the buyers, such as an aging HVAC unit.
• Offer to leave appliances. Conveying the washer and dryer can save the buyer thousands, so they may be willing to accept some items as-is.
• Offer to share the cost of expensive repairs that aren’t structural. I am negotiating a sale now where the seller is providing new windows for the home, but we were able to increase the sales price to cover most of the additional expense.
Giving the buyer a choice can often be a winning approach because they like having control over the outcome. It also shows you’re willing to meet them in the middle.
Use your Realtor for advice
Whether you’re the buyer or the seller, a less-than-perfect home inspection can certainly complicate things. Every situation is different, and it’s difficult to tell when to spend the money to fix an issue and when to negotiate a compromise. An experienced Realtor can help you navigate the findings and set priorities for moving forward.