Bad Home Inspection for Sellers: Common Causes and Reasonable Repairs

When making an offer on a house, almost all purchasers will request that a home inspection be performed first. After receiving the report of the inspection, many people end up asking for concessions or requesting that repairs be made.

As a seller, it is crucial to prepare yourself for the process of having a house inspected, and it is also important to know how to bargain after an inspection has been completed in the event that it returns with some less-than-ideal news. In the end, among sellers who attempted to sell their property but were unsuccessful, the inspection report was responsible for the failure of the transaction 15 percent of the time.

Home inspection frequently asked questions for real estate

What exactly is involved in a house inspection?

A home inspection is a detailed study of the property that is up for sale, performed by a qualified and certified professional home inspector. This review is based on a visual examination as well as testing of the properties various systems and components. The result of a home inspection is a report that describes the state of the property at the time of the examination and warns buyers about any significant problems. When purchasing a home, the vast majority of purchasers opt to get a home inspection done first. This protects them from overpaying for the property and helps them avoid spending thousands of dollars (or more) on unanticipated repairs after the closing.

What does it mean for there to be a contingency in the home inspection report? Is that typical?

A home inspection contingency is an amendment to the offer contract that grants the buyer the right to inspect the property and withdraw from the transaction if they are unhappy with the results of the inspection. It is not uncommon for purchasers to give up their right to an inspection in order to make their offer more desirable to the seller, and this occurs most frequently in markets in which sellers face intense competition from other sellers.

What aspects of the house inspection are covered by the contingency?

The language used in each contract is different, but in most cases, it states that the buyer must find the results of the inspection to be satisfactory. If it is not, the buyer has the option to either renegotiate the terms of the deal or back out of the deal entirely or receive a full refund of any earnest money that was paid. Before you sign any documents, you should discuss the details of the home inspection contingency with your real estate agent if you have any questions regarding the provisions of the agreement.

Who is responsible for paying for the home inspection report?

In most cases, the buyer is responsible for paying for their own inspection and is free to work with any certified home inspector of their choosing. On the other hand, sellers who have reason to be concerned about the findings of an inspection may choose to pay for and conduct their own pre-inspection of the property. You will be able to adjust the price of your house appropriately based on the findings, and you won’t be caught off guard by the findings of the buyer’s inspection. It is important to keep in mind that the buyer must be made aware of any issues that are discovered during the pre-inspection.

How long does the buyer have to do an inspection after making an offer on a house?

When both parties have accepted the terms of the deal, the timescale should typically be within five to ten business days, however this number can vary depending on the market and the contract.

How long does a buyer have to make a request for repairs after receiving the results of a home inspection?

Again, this is dependent on the market as well as the particular contract you have. In most cases, the inspection and the written request for any repairs are both included in the allotted time in the contract, which is typically between five and ten working days. In a market where sellers have the upper hand, buyers typically have more time on their hands, whereas in a market where buyers have the upper hand, sellers typically require purchasers to move swiftly.

Should sellers attend the home inspection?

It makes perfect sense for you to be present during the home inspection if you are handling the sale of your property on your own. If you are collaborating with a broker, it is highly recommended that you have the broker represent you at the event.

The most common causes of failed home inspections

Even if the house isn’t that old, when the buyer’s inspection report comes back with a big list of repairs, the seller is typically taken aback and surprised by the findings. The following is a list of some of the most typical serious problems that are discovered during inspections:

• Roofing problems: Roofing problems can range from a few missing shingles to leaks or soft places, or even a full roof replacement if the roof is old or failing. If the roof is old or failing, a full roof replacement may be necessary.

• Electrical concerns: The most common electrical issues include wiring that is not up to code, frayed wiring, or improperly wired electrical panels.

• Plumbing issues: The most common plumbing issues are leaky faucets, broken toilets, and clogged drains.

• Plumbing issues: Some of the most expensive repairs are leaking pipes (and the resulting water damage), failed water heaters, and difficulties with the sewer system.

• Foundation issues can be expensive to repair, including cracks in the foundation, settling, and water damage in the basement.

• Termites and other pests: Damage caused by termites, in addition to the presence of other pests or vermin, can be a major warning sign for prospective purchasers.

• Mold: Issues related to mould are rather prevalent, particularly in regions that are moist or humid, and the necessary repairs can be quite extensive.

• Problems with windows and doors: inspectors frequently find cracked panes, failing window seals, windows and doors that do not open and close correctly, and other similar issues.

• Asbestos or lead paint: This is a significant issue, and something you should be extra aware of if you’re selling an older property. If you’re selling an older home, you should be especially cautious of these potential hazards. Be sure to tell everyone all you know about asbestos and lead paint because many contracts have specific criteria relating to the use of these materials.

• Damage to the chimney Old chimneys provide a potential risk to public safety and should generally be removed if they are not in good functioning order.

The good news about the process is that as a result of the inspection, the buyer knows what they are getting into and has the opportunity to ask for repairs or walk away, both of which protect the seller from future liability. The bad news is that a bad home inspection report isn’t what any seller is hoping for, but the good news is that as a result of the inspection, the buyer knows what they are getting into and has the chance to ask for repairs or walk away.

Behavior of the Buyer: What comes next once the home has been inspected?

After getting the inspection report on your property, the buyer may choose to perform one of the following, depending on the provisions of the contract you have with them:

• Make a request for repairs: The buyer has the option of making a request to the seller to complete a list of needed repairs as a prerequisite to moving forward with the sale.

• Request a credit: The prospective purchaser has the option of requesting a credit, which is also known as a concession, in an amount that is sufficient to pay the costs of the repairs. They give you a specific monetary amount that they want refunded to them as a closing credit, which does not affect the total cost of the transaction but does cut into your net earnings. When a seller is unwilling to make repairs, or when a buyer wants to conduct the repairs on their own terms, this is a frequent alternative for purchasers to consider.

• Withdraw from the transaction entirely: As a result of a poor inspection, the buyer typically has the option to back out of the contract, even in the worst-case scenario. Be aware that prospective purchasers who are experiencing second thoughts may use the inspection as an excuse to pull out of the deal, even if the report only identifies minor problems.

Following the completion of the house inspection, the seller and the seller’s agent should both ask themselves the following questions:

• Which repairs need to be completed immediately? You should give higher priority to repairs that address issues relating to safety or compliance with the law.

• How much will it cost to make the repairs? If you plan to do the repairs on your own, it is recommended that you obtain at least three estimates from credible professionals in the field.

• Do you need to engage a professional to make the repairs, or can you do it yourself? It is dependent on what the customer wants, the kind of repair that needs to be done, and your own level of ability.

• How much of a credit line would you be able to extend to the buyer if you decide against making the necessary repairs before the sale? You are in good company, since 83 percent of sellers make some kind of concession to the buyer in order to clinch the transaction. The amount of credit you offer to the buyer and the type of credit you offer depends on the level of repairs that need to be done.

• What are some strategies for negotiating repairs? Your real estate agent is an important resource in this situation since they should have negotiation methods that help buyers and sellers meet in the middle on repair requests and come up with sensible solutions. These strategies can be found in your real estate agent’s toolbox.

• Is it even worth it to go through with the repairs? It may make sense in certain circumstances to confer with your real estate agent and assess the benefits and drawbacks of making repairs to your property versus allowing the buyer to back out of the deal and re-listing your home in its current condition.

Remedy for poor home inspections offered to sellers

If the results of the house inspection aren’t good, there’s no need to freak out. Buyers who are reasonable will understand that no home, not even brand new construction, is perfect in every way. Also, keep in mind that they are interested in purchasing your home. Therefore, they ought to have the same level of interest in moving the deal forward as you do.

You have a few choices available to you, and you should make your decision about what course of action to take based on what makes the most sense for your finances and for the real estate market in your area. Here are some options:

• You need to fix the problems: In most cases, this is the right course of action to take, provided that you consider the demands for repairs to be acceptable and that you have the financial means to carry them out. You will want to keep the deal moving forward if at all possible because, if the deal does fall apart, you will be required to disclose the findings of this first report if you re-list your home, and you run the risk of scaring off a potential buyer as a result. Therefore, you will want to do everything in your power to keep the deal moving forward. According to research conducted by Zillow, one third of purchasers request that the seller fix the issue before the sale is finalized.

• Offer a credit: As was just stated, purchasers are usually willing to accept a credit for the cost of repairs. However, despite the fact that you won’t be making the repairs on your own, you should still acquire estimates from a contractor so that you don’t end up offering a credit that is way too expensive.

• Reduce the asking price and sell the property “as is”: If you are unable to afford the necessary repairs for your property or if you are in a rush to sell, one viable option is to sell the house in its current condition at a reduced price.

• Include a one-year home warranty with your package: An olive branch in the form of the purchase of a house warranty for the buyer can be a good gesture to offer. It will only set you back a few hundred dollars, and it will provide the buyer with piece of mind in the event that any problems arise in the first year after the completion of the deal. This is an especially attractive option for inspection findings that aren’t necessarily failing products but rather aged systems that will need to be replaced within the next few years.

• Barter in other ways: You may always offer to barter with other items, such as furniture that wasn’t originally included but the buyer might desire, or appliances that you weren’t planning on leaving behind. For example, you could say that you are willing to barter with these items.

Problems found during home inspections: What steps to do in the event that you do not have faith in the inspection report

It can be difficult to know what to do if a house inspection turns out to be negative. The buyer selects their own house inspector, and it sometimes happens that the seller believes that the report is inaccurate or overblown in some way.

Home inspectors have no business counselling buyers about whether or not they should go through with the purchase of a property, regardless of the findings of the inspection. Their responsibility is limited to performing the inspection, compiling a report of their findings, and then giving the buyer the opportunity to draw their own conclusions.

Home inspectors have, on occasion, been the target of legal action brought by sellers who maintain that the collapse of a transaction was the inspector’s responsibility due to inaccurate reporting on their part. The laws of the state will determine whether or not you have the right to sue the inspector. However, because the relationship in question is between the buyer and the inspector, it can be difficult for sellers to challenge the inspection as a third party. In this case, the inspection is being challenged.

What to do in the event that the buyer cancels their order

Remember that if a buyer backs out and you re-list, you are going to be required to disclose whatever was found in the report to future buyers, so the best thing to do is go ahead and complete the repairs and keep any documentation from your contractor that proves the work was done. If a buyer backs out and you re-list, you are required to disclose whatever was found in the report to future buyers.

You could also want to note the repairs in the description of your listing on the website. A transparent explanation of why the home was taken off the market after being under contract, as well as assuring potential buyers that any problems they had with the property have been resolved, can be an effective marketing strategy. Buyers and their agents will be aware that your home is now available for sale again. This is just one illustration: “The seller has addressed all of the concerns noted in the most recent inspection report, including installing a brand-new roof and electrical panel.”

After the home inspection, typical repairs made by the seller

It is essential to differentiate between reasonable and unreasonable requests made by buyers before going too far down the path of arranging for seller repairs after the home inspection has been completed. The prospective buyers shouldn’t assume that the residence is in perfect condition.

After a home inspection, reasonable demands are made.

• Plumbing, drainage, sewer, septic, or water issues (or well water issues, if applicable);

• Mold or water damage;

• Significant electrical problems that pose a threat to safety or violate building codes.

• Issues with heating, ventilation, and air conditioning (HVAC) that compromise the cosiness of the home

• Roofs that are leaking or are missing shingles

• Termite and pest damage

• Infractions of the building code

• Paint containing lead or asbestos

• Elevated radon levels (a common issue in homes with basements)

Unreasonable demands following the completion of a home inspection

• Anything that costs less than one hundred dollars and that the buyer can reasonably fix themselves (this is especially important in a seller’s market, where buyers don’t want to appear to be overly picky).

• Aesthetic concerns, such as the need for paint touch-ups or replacement of aged tiles

• Minor water damage, such a leaky toilet

• You are not responsible for transforming the property into the home of your buyer’s dreams when it comes to renovations.

Fixtures that aren’t securely fastened but can be tightened with just a few tools

• Minor electrical fixes

• Cracks in the basement floor that do not affect the structure of the building

• Performing cosmetic landscaping or cleaning the garage