A home inspection can feel a little scary. Visions of Sherlock Holmes looking under your water heater with a flashlight may send you into a panic. Don’t worry; even though some buyers make the mistake of thinking the inspection as a way of getting their repair wish list, sellers are not required to have a perfect house.
So let’s look at the truth about a home inspection.
Everything on the inspection report is negotiable. Being honest about any known issues, and addressing any concerns, is the best practice. The truth will be revealed and it is easier, and typically more cost effective, to proactively handle any issues, or have a game plan going into the negotiations.
Here are some key points:
1. You’re not required to fix everything before you sell your home.
2. If you know something needs to be fixed, always disclose it.
3. Disclosures are not deal-breakers.
4. Wait for a copy of the report.
5. Negotiate repairs; both you and the buyer have options so stay positive and remember common sense and consideration.
6. A cosmetic issue should not be considered a repair. An issue is considered a repair if it poses a safety, structural, or physical hazard. Most buyers will want any repairs fixed.
Who Schedules The Inspection?
Okay, now that you have the key points you can now be confident with the inspection process and what to do with the inspection results.
The seller will choose their preferred inspector and pay for the inspection. You can be present during the inspection if you like. If you do attend be polite and cooperative during inspection; it’s not personal so resist getting defensive about any comments from the inspector or buyer.
Once the inspection is complete, the buyer will review it and decide what their concerns or issues are. The buyer has options as far as how they would like repairs completed. Below are the four basic choices the buyer has:
1. They will ask you to make requested repairs.
2. They will ask you to reduce the sales price in lieu of repairs.
3. They won’t request any repairs be done.
4. They will decline to buy the property. You cannot be forced to make any repairs, but the buyer has the power of walking away from the sale. If the buyer backs out of the purchase, any deposit that was received in escrow will need to be returned if the inspection is completed within the time allowed and cancellation is received by required date stipulated in the contract.
Your Options as a Seller
As a seller you also have rights and options. Here are the three options you have to choose from:
1. Agree to buyer’s request list and make the repairs.
2. Agree to part of the requests: a. Make some repairs and create an allowance for the rest of the repairs. This will need to be stipulated in the contract. b. Make no repairs and stipulate in the contract: “House is being sold as is and in lieu of repairs.” c. Any repairs you disclose you will not complete and you agree to credit the buyer will need to be stipulated on the contract: “Buyer will be credited $_______________ “
3. Agree to make no repairs and issue no credits. The buyers may still move forward with the purchase if the repairs are negligible, or they may decide to walk away. You need to be prepared to handle either outcome. Since you are not using an agent to sell your home, you do have more price flexibility to handle some minimal repairs.
So here is the bottom line…
Inspections aren’t bad or scary. We suggest you be prepared for feedback so you’re not surprised by issues the inspector may find. We find most sellers begin reviewing their property for any maintenance or repair item when they think they will sell their home. You want to get top dollar for your home so you will want it to be in the best shape possible when you list your home. As we’ve said before, it’s all about curb appeal so make sure you spruce up where possible. Either way, you can proactively begin the work or, as mentioned above, make note of the items.
Requests are just requests. They’re not ultimatums. Remember, you, as the seller, have options so be flexible and anticipate how you would like to handle any items noted when the Inspection Report is delivered.