Bad Home Inspection? Here Are Your Next Steps

Home inspections are an important step in the home buying and selling process. It's in the best interest of both parties that the inspection process goes well, so what happens when it doesn't? Here are a few steps you can take toward finding a resolution, rather than cancelling the entire transaction.

What Exactly Does a Home Inspector Do?

Think of an inspection as a routine check-up and the inspector as a doctor. The inspector isn't performing an X-ray on your home, but rather is checking for current or foreseeable issues. They will review the physical structure, mechanical and electrical systems, as well as the plumbing.

An inspector won't give a personal opinion on the "deal" you're getting on the house or provide their thoughts on compliance with local building codes. They are simply there to provide an unbiased, objective opinion on the structure of the house.

What is the Inspector Looking for?

As a seller, it's important to read your contract carefully. It will dictate what must be in "good working order" at closing. For buyers, it's important to understand that an inspection is not a wish list of things you wish the house featured, such as a new roof or updated appliances. If the dishwasher is older, but it doesn't leak when it runs, then it's in good working condition.

So, what is an inspector actually looking for?

• Damp basements or crawl spaces
• Damage to the chimney or roof
• Non-functioning electrical panels
• Possible mildew or mold
• Structural damage in the walls or foundation
• Plumbing issues
• Broken heating or cooling systems

A few of the most common reasons home will fail an inspection are:

• Roofing Issues: Even a recently built home could be missing a few shingles.
• Electrical Problems: Wiring that's not up to code, frayed, or improperly wired from the start are just a few common issues.
• Leaky Plumbing
• Foundational Cracking or Settling
• Mold: Mold issues tend to be a more common issue in wet or humid climates
• Chimney Damage: Old chimneys can be a safety hazard, especially in older homes.

What Happens if My Home Fails an Inspection?

Even newer homes kept in the best condition can still fall victim to climate challenges, such as mold and leaky windows, or even issues that weren't addressed when the home was originally built, like cracks in the foundation. So, as the seller, what are your options when your house "fails" a home inspection?

Well, for starters, a home cannot "fail" an inspection, per se. However, clear descriptions of any issues with the home will be provided to the buyer. Depending on the extremity of the repair, your buyer may be understanding of smaller issues. For bigger issues, you may need to:

Lower the sale price. If you don't have the time or resources to make the repairs before selling, your real estate agent may encourage you to sell at a lower price than you originally asked. Depending

Make the repairs. If the repairs are reasonable to complete before closing, the easiest thing to do might be to just make the repairs. Keep in mind that if the current buyer backs out, you will have to disclose the inspection results to new potential buyers. So, making the repairs now could save you the loss of your current buyer, or future buyers.

Offer to pay for a one-year home warranty. Have you considered this option? In cases where repairs aren't exactly necessary now but could cause trouble for your buyer in the future, offering to pay for a year of home warranty gives the buyer peace of mind, and allows you to follow through with the sale.

Get a second opinion. If you believe your inspection isn't an accurate depiction of the quality of your home, you can always pursue a second inspection.

Ask questions. Determine which repairs are mandatory and begin there. If you have a long list of items that need repairs, and you can't afford the time or cost of all of the repairs, work with your real estate agent to determine non-negotiables.

What if the Home I'm Buying Needs Repairs?

If you're the buyer stuck in a situation where the home you're purchasing needs repairs, don't panic! It's unlikely that any house you look at will be perfect. However, there is a difference between a few creaky floorboards and a damaged foundation.

In most cases, you can request that the seller complete the repairs listed on the inspection or propose a lower purchase price and make the repairs yourself. Keep in mind, requests such as loose wall fixtures, cosmetic landscaping, and paint touch-ups are likely to be seen as unreasonable. Work with your seller and real estate agent to determine which items on your list should be repaired, and which items aren't worth the time and effort of anyone involved.

Are you ready to learn more about the homebuying process? Contact a Mortgage Advisor today to begin your journey!