A home inspection is one of the last steps before closing on a new house. It’s not mandatory in the buying process. However, an inspection allows buyers to find out what repairs, both big and small, may be needed to make the property safe and comfortable. As home inspectors, we are trained to find issues that aren’t obvious during a showing. Our findings may reveal issues you’ll want to consider and factor into the total cost of the property.
Once you’ve had your inspection, what comes next? A savvy real-estate agent should be a tremendous asset in helping you navigate the post-inspection process. However, today I’ll weigh in on some of the more common questions I hear from clients.
What Will My Home Inspection Report Tell Me?
Your inspection report is a wealth of information about the property. It provides photos and descriptions of everything inspected (and also specifies what is not included in the scope of your inspection). Most importantly, the report summarizes defects found.
I assign every defect a categorical distinction so you know if it’s an immediate safety hazard, an issue requiring a qualified professional’s expertise to repair, or simply a DIY fix to tackle at your earliest convenience.
Your report will serve as a guide of sorts, helping you prioritize the issues at hand. Most experienced agents are helpful in terms of helping to estimate repair costs, or they can direct you to various professionals who can provide you with ballpark figures. We also provide a list of specialists that may be of assistance in the evaluation or repairs process.
What Fixes are Mandatory After a Home Inspection?
There is no such thing as a mandatory fix required after a home inspection—at least not from a legal perspective.
I explain to clients that inspections can bring to light all kinds of issues, from moisture intrusion and mold to electrical issues and roof damage. This means that some repairs may be necessary to make a home safe. Other repairs fall into the category of “nice to have done” but don’t necessarily need to happen before a buyer moves in. None of these, however, are mandatory repairs required of the seller.
In general, realtors will advise their clients what fixes, if any, should be requested from the seller. Realtors will typically advise buyers to request fixes that address health hazards or major structural risks to the property. These issues may include:
- Fire or electrical hazards
- Major structural hazards
- Mold or water damage
- Toxic or chemical hazards
- Pest infestation
Unfortunately, cosmetic defects or easily-fixed items which are often the result of normal wear and tear are typically not included in buyer requests.
But My Lender Says Repairs are Mandatory…
Although repairs are not “mandatory” or required by the seller, you may hear that they are indeed required by your lender. It’s important to note there’s a difference between repairs that a buyer requests and those that a lender or insurance company requires in order to underwrite a mortgage or a homeowner’s policy. In some cases, you may be denied financing or insurance if the bank isn’t satisfied with the results of an inspection and the planned repairs. In this case, certain fixes may be “mandatory” for you as the buyer in order to get a loan and close on the home.
Who Pays for Repairs After a Home Inspection?
There is no clear-cut rule about who pays for repairs. Whether the buyer or seller pays depends on the contract you’ve negotiated. It also depends on the state you live in, so it’s critical these expectations are clearly defined in your offer.
Minnesota has an “as-is” addendum which can be added to the purchase agreement. This puts the onus on the buyer to accept the property in its current condition and the financial responsibility for fixes. Another type of contract is the “standard contract”. This contract requires sellers to pay for certain repairs up to a specified dollar amount.
Which Repairs Should I Request?
As an inspector, it’s not my role to get involved in which repairs a buyer should request of the seller. Experienced real estate agents have the skills to negotiate repair requests.
Generally speaking, however, if you’re the buyer, negotiating repairs will bring your costs down. This is true especially if you’re close to maxing out your budget and want some fixes completed sooner rather than later. However, in our current “seller’s market”, sellers have less incentive to make repairs. They know that if a buyer decides to walk away because they won’t agree to replace the roof, it’s very possible the next buyer will overlook the roof’s condition.
How Do I Know If I Should Walk Away After the Inspection?
As a home inspector, I never advise clients to proceed with a purchase or walk away from their offer, based on my inspection. This decision is entirely up to every individual (although it doesn’t stop people from asking!)
Some buyers want a fixer-upper, so an inspection report filled with 92 defects is hardly a deterrent. Other buyers want to deal with as few repairs as possible, and so the report may provide a reality check in terms of what they are really getting into.
Some buyers decide to walk away after a home inspection if they are not able to negotiate important repairs. Buyers have some leverage for negotiating repairs as long as they don’t start with the “as-is contract”. (It simply allows them to walk away but doesn’t leave room for repairs). You can negotiate the purchase price or ask for cash to cover some costs. If a seller is eager to close the deal, they may be more willing to accept these terms.
Moving Forward With the Results of Your Home Inspection
A licensed real-estate agent has the expertise to help you navigate this process. If you decide to go-it alone, just beware there is always some give and take between buyers and sellers. No matter which side you’re on, make sure you understand your responsibility as laid out in your contract.
The process of buying or selling a home typically creates stress for all involved. Our goal is to help clients move through the inspection process with ease. We are driven by the premise that our clients deserve to know as much information as we can provide in the time available so they can make a more-informed purchase decision. If we can be of help, please call us at (612) 440-8466 or visit our website at branchinvestigations.com.