A home inspection is a critical checkpoint when buying or selling a house. It sheds light on the property’s condition that might not be visible to the naked eye.
For buyers, it’s a safeguard against unforeseen expenses. It represents an opportunity for first-time sellers to rectify problems and enhance the home’s appeal. Preparing for the inspection’s outcomes ensures that both parties can confidently navigate this part of a real estate transaction.
From experience as a REALTOR® for the past 38 years, home inspections are one of the most critical hurdles. Many sales fall through at this stage of a contingent transaction.
Homesellers can take some steps to avoid this unfortunate circumstance. Wise home sellers take this approach to be ready before a house is inspected. One is to have a pre-listing inspection and then make necessary repairs or improvements.
The result is a transaction that stays together, and a buyer arrives with a home in better condition. Let’s examine everything you should know.
Understanding the basics of home inspections
A home inspection is a comprehensive evaluation of a property’s physical condition. A certified inspector usually performs it. The aim is to identify potential issues affecting the property’s safety, functionality, or value.
The home inspection cost is well worth it for the peace of mind it provides.
Most buyers have a home inspection contingency that allows them to walk away from the sale with unsatisfactory results. Understanding this contingency is an essential hurdle.
Inspectors examine significant systems like plumbing, electrical and HVAC. They will assess structural integrity and identify safety hazards. A report will be done that details the inspection findings.
Inspectors often detail the most significant issues that need immediate attention.
Reading the inspection report, which details the inspector’s findings, is crucial for understanding the property’s condition and planning the next steps.
How to prepare for the inspection as a buyer and seller
For sellers: Start with decluttering and deep cleaning to ensure the inspector can easily access all areas. Consider a pre-inspection to uncover and address significant issues beforehand. This proactive approach can streamline the process and enhance your negotiation stance.
Over the years, I have recommended that many of my seller clients have a pre-listing inspection. It is money well spent. Inspectors have occasionally found problems that could have tanked the sale.
For example, an inspector found a significant amount of mold tucked back in the attic where nobody could see it.
Luckily, the seller made this repair before listing the home for sale.
For buyers: Choose a reputable inspector with experience in your property type. Attend the inspection to gain firsthand insight into the home’s condition. Ask questions to understand anything you’re unsure about.
Understanding what you’re buying and the severity of any issues is crucial. An excellent home inspector will take the time to share their expertise. They won’t exaggerate problems and make you feel like the home isn’t worth purchasing.
When you receive the report after the inspection, you should always seek answers to anything confusing. Having a home inspection checklist can come in handy to ensure nothing is missed.
Navigating the inspection results
After receiving the inspection report, both parties must assess the findings to decide their next steps. Common issues range from minor cosmetic flaws to significant structural damages.
For buyers, it’s crucial to identify which issues are severe enough to be deal-breakers. Major concerns might include foundation problems, outdated electrical systems, or significant roof damage.
Understanding the potential repair costs can help buyers negotiate more effectively. Sometimes, the issues may be severe enough that walking away is the best option.
For sellers, the inspection results can guide decisions on which repairs to undertake to facilitate the sale. As mentioned, addressing significant issues before listing can make the property more appealing and may prevent renegotiation later.
Sellers should prioritize repairs based on their impact on the sale’s viability. One of the things I always ask sellers is whether another buyer would have the same concerns. If you reasonably assume they would, sellers should agree to the buyer’s request.
On the other hand, buyers should always focus on the more significant issues. Don’t be an unreasonable buyer looking for perfection. That’s a big turnoff.
Negotiating repairs and concessions
Negotiating after a home inspection requires a strategic approach from buyers and sellers. Buyers should prioritize their repair requests, focusing on significant issues that impact the home’s safety or livability.
It’s essential to be realistic about what to request. Asking for too many minor fixes can strain negotiations. In most cases, requesting a price reduction or a seller’s concession can be more practical than insisting on repairs.
You’ll be able to complete the job the way you want it done.
On the other hand, sellers must decide whether to undertake the repairs, offer a price reduction, or provide concessions towards the buyer’s closing costs.
Some sellers opt for an “as-is” sale, particularly if they cannot manage or finance the repairs. However, being open to negotiations and willing to address significant concerns can keep the sale on track.
Real estate agents play a crucial role in this phase. They offer guidance based on their experience and knowledge of the market. They can help both parties understand which demands are reasonable and which might derail the transaction.
Most REALTORS® don’t like this aspect of the job, but it comes with the turf.
The impact on buying and selling
The outcomes of a home inspection can significantly influence the sale. For buyers, findings might affect the final offer, alter financing options, or lead to withdrawal.
Sellers may need to adjust their expectations regarding the sale price or extend their timelines to accommodate repairs. Before changing the listing status to pending, you’ll need to get past this hurdle.
Inspection findings and subsequent negotiations can directly impact closing timelines. Delays are common as parties work through disagreements or wait for repairs to be completed. Buyers and sellers must maintain flexibility and understand that these negotiations are part of the process.
The emotional aspect of the transaction should be considered. Receiving a list of defects can be disheartening for sellers, while buyers might feel anxious about future expenses.
Excellent real estate agents will maintain a positive negotiation atmosphere. They will focus on solutions rather than problems, which can help keep the transaction moving forward.
Excellent article!