Bad Home Inspection For Sellers
Nearly all buyers request a home inspector when they make an offer on a property. But, unfortunately, many buyers end up asking for repairs or concessions after receiving the inspection report.
Sellers must be prepared for home inspections. If the inspection report comes back with bad news, they know how to negotiate. 15% of all the sellers who lost a sale were because the buyer backed out after receiving the inspection report.
FAQs: Home Inspection For Real Estate
What's A Home Inspection?
A professional licensed home inspector performs a home inspection. It involves a thorough review of the home for sale based on visual evaluations and its systems and components testing. A home inspection report is a final product. It details the condition of the home and warns buyers about any major problems. A home inspection is required by most buyers when purchasing a home. This allows them to avoid paying thousands of dollars in repairs and protect their investment.
What Is A Home Inspection Report Contingency, And How Does It Work? Is It Common?
A home inspection clause is an addition to an offer contract. It allows buyers to inspect the property and then cancel the deal if they are not satisfied with its findings. Buyers may sometimes waive their right of inspection, especially in highly competitive markets.
What Is Included In The Home Inspection Contingency?
Each contract is different, but it generally states that the buyer must approve of the inspection. If it isn't, the buyer can renegotiate or cancel the deal and get their earnest money back. Ask your agent about the home inspection clauses that your buyers have presented before you sign.
Who Pays To Have A House Inspected?
The buyer usually pays for their inspection and can choose to use any licensed home inspector they prefer. Sellers who are concerned about the results of an inspection may opt to have their pre-inspection. The results will help you price your home appropriately, and you won't have to be surprised by what your buyer finds. Your buyer must be informed of any issues discovered in your pre-inspection.
How Long Must A Buyer Conduct A Home Inspection Before They Can Sell The House?
The timeframe depends on the market and contract. However, it is usually within 5-10 days after both parties accept the deal.
How Long Must A Buyer Wait Have Repairs Done After A Home Inspection?
It all depends on the market and the contract you have. The inspection is usually completed within 5-10 business days. You can also request repairs in writing. Buyers sometimes have more time in a buyer's market while sellers have to move quickly.
Do Sellers Need To Attend The Home Inspection?
It is a good idea to go to the inspection if you are selling your home on your own. It's best to have an agent attend your home inspection if you are working with one.
The Top Reasons Why Home Inspections Fail
Sellers often find themselves surprised when a buyer's inspector report includes a lengthy list of repairs. These are the most frequent major problems that inspectors find during an inspection.
Roofing Problems:
Roof troubles can include missing shingles, leaks, soft spots, or even complete roof replacements if the roof is older or in decline.
Electrical Problems:
Common electrical issues include frayed wiring or wiring that isn't up to code.
Plumbing Problems:
Leaky pipes and resulting water damage, failing water heaters, and sewer system issues are the most costly.
Foundation Problems:
Cracking foundations and basement water damage are costly repairs.
Termites & Pests:
Termite damage and the presence of other pests or vermin can all be red flags for buyers.
Mold: Mold issues can be a problem in humid or wet climates. Repairs can be costly.
Door and Window Issues:
Inspectors often find broken or damaged panes and windows that aren't opening and closing properly.
Lead Paint Or Asbestos:
This can be a serious problem, and you should be cautious if you are selling an older house. There are many contracts that have specific requirements regarding asbestos or lead paint. Make sure you disclose all information.
Chimney Damage:
Old chimneys can pose a danger to the safety and should be removed.
A bad home inspection report can be a nightmare for sellers. However, it is a good thing that the buyer is able to see what they are getting into and ask for repairs.
Buyer Action: What Happens Following A Home Inspection
The buyer can do any of the following things depending on the terms in your contract:
Repairs Requested By The Buyer:
As a condition to the sale, the buyer can request that the seller make a list of repairs.
Request A Credit:
A buyer can request a credit, also known as a concession, in an amount sufficient to cover repairs. The buyer may request a closing credit in the amount of a dollar. This won't affect your purchase price, but it will reduce your net profit. If sellers refuse to repair the property, buyers may opt for this option.
The buyer can back out of the deal if there is a poor inspection
Buyers who feel cold will often use inspections as an excuse to withdraw, even if there are minor problems.
After The Inspection, Sellers And Their Agents Should Have Questions
What Repairs Are Required?
Prioritize repairs that pose a legal or safety risk.
What Will The Cost Of Repairs Be?
Get at least three estimates from reputable contractors if you plan to do repairs.
Should You Hire A Professional?
That depends on the repair you are doing and the skill level of your buyer.
What amount of credit do you need to offer the buyer if the repairs are not completed before closing?
An estimated 83 percent of sellers make some concessions to close the deal.
How Do You Negotiate Repairs?
Your agent can be a great resource as they have negotiation strategies that help buyers or sellers come to an agreement on repair requests.
Do you need to repair your home?
Sellers Can Use Bad Home Inspections
If you get a negative home inspection, don't panic. Reasonable buyers will realize that no home is perfect, even new construction. Remember, they want to purchase your house! They should be as eager to make the deal move forward as you are.
There are many options available to you, and you should choose the best course of action for yourself and your local realty market. These are some of the options available:
Do The Repairs:
If the repair requests seem reasonable and you have the funds to pay for them, then this is the best option. Keep the deal going if possible. If the deal falls apart, you will need to reveal the results of the first report to re-list your house. This could put you at risk of losing a potential buyer. Research shows that 36% of buyers demand the seller fix the problem before purchasing.
Offer A Credit:
As we have mentioned, buyers are often open to repair credits. Even though you won't be doing the repairs, it is important to get estimates from contractors so that you don't offer too much credit.
Reduce The Price:
If you don't have the funds or are in a hurry to sell, selling a home as is can be an option.
Offer A 1-Year Home Warranty:
A home warranty can be a nice gift for the buyer. The warranty will cost only a few hundred dollars and gives peace of mind to the buyer in case of any problems that may arise within the first year. This is particularly appealing for inspection results that aren't necessarily failing, but older systems will need replacement within the next few decades.
You Can Also Barter With Other Items:
This includes furniture that was not originally included, but the buyer may want and appliances you didn't intend to leave behind.
Problems With Home Inspections: What To Do If The Inspection Report Is Not Trustworthy?
It can be difficult to know what to do if a home inspection is negative. Buyers can choose their home inspector, and sellers may feel that the report is inaccurate or exaggerated.
Home inspectors shouldn't advise buyers about whether or not they should proceed with the purchase, regardless of their inspection findings. They are only there to report on the findings and let the buyer make their decision.
Sellers have sued home inspectors before, claiming that the inspector's inaccuracy reporting and fault caused a deal to fall through. The state laws will determine whether you can sue the inspector. However, it can be difficult for sellers to challenge an inspection as a third party because the relationship is between the buyer, the inspector, and both.
What Should You Do If The Buyer Refuses To Pay?
You must inform future buyers if a buyer withdraws.
It is possible to add a note about the repairs to your listing description. Then, buyers and agents will be aware that your home has been placed on the market. Being open about why and letting buyers know all issues have been resolved can help you stand out. Here's an example: "Seller fixed every item in the previous inspection report, including a roof and electrical panel."
Common Seller Repairs After The Home Inspection
It's important to distinguish between reasonable and unreasonable buyer requests before you make any arrangements for seller repairs. In addition, buyers should not expect the house to be perfect.
After A Home Inspection, Reasonable Requests
Safety or code violations can lead to major electrical problems
If applicable, plumbing, drainage, sewer, or septic issues, as well as water issues (or well water problems)
Water damage or mold
HVAC issues that impact home comfort
Missing shingles or leaking roofs
Pest damage and termite infestation
Building code violations
Lead paint or asbestos
Elevated levels of radon (a common problem in basement homes)
Unreasonable Demands After A Home Inspection
Any item less than $100 that the buyer can fix themselves (especially in a seller's market where buyers don't want too much control)
Cosmetic problems, such as paint touch-ups and older tiles
Water damage that is minor, such as a leaky toilet, can be repaired.
Renovations -- You are not responsible for making the home your buyer's dream house
You can fix loose fixtures with just a few tools
Minor electrical fixes
Basement floor cracks with no structural impact
Garage cleaning or cosmetic landscaping
