How To Manage The Results Of The Home Inspection
Home buyers and sellers have several options for action once they receive the results of the home inspection. Let’s discuss the different scenarios that may arise and how they can affect your purchase contract negotiations.
Result: No Major Issues
This is the ideal scenario for any prospective buyer, signaling that the property is in good shape and likely doesn’t have any significant problems that could affect its value or your future living conditions.
Even in this best-case scenario, it's wise not to become complacent. While the absence of major concerns certainly provides peace of mind and a green light toward proceeding with your purchase, you may still consider investing in a home warranty to offer long-term protection for your soon-to-be new home.
Result: Fixable Issues
If the home inspector finds a few items that concern you, you can ask the seller to fix the problem, reduce the purchase price or give you a cash credit at closing to fix the problem yourself.
This is where a thorough home inspection report can help with negotiations. Making an offer contingent on inspection allows buyers to negotiate repairs or adjustments more confidently.
For example, say the home inspector finds some evidence of termite damage in an all-season room. The home buyers would then present the issue to the sellers and ask that they get a pest inspection to ensure there is no active infestation. The sellers agree to a pest inspection, the home passes and all parties are happy to close on the home.
Result: Significant Issues
Not every home sale ends up at the closing table. In our previous example, the sellers spent $250 for a pest inspection to give their buyers peace of mind. Bigger-ticket repair items like a new roof or foundation issues are often the reason buyers back out of a contract.
Let's use another example. You fall in love with a home and you have it inspected. The inspector finds there has been a slow leak from a second-story bathroom that has caused a significant amount of mold and mildew. The repairs are estimated at $15,000 and could take 6 weeks or more.
You can ask for the seller to lower the sale price or provide a credit at closing, but do you and your family have 6 – 8 weeks to wait for repairs? Many buyers would use the inspection contingency to back out to avoid the chaos of construction.
