Buyer’s Guide to Home Inspections
Your offer was accepted! Now for the HOME INSPECTION! This is a great window of time to learn more about the house you’ll be buying. The purpose of the inspection is to disclose defects in the property that could materially affect its safety, livability, or resale value. No home gets 5 stars with no issues/findings. It is the home inspector’s job to thoroughly inspect the house and inform the buyer of any and all defects - and there will ALWAYS be some.
You may also leave the inspection feeling like your mental to-do list just tripled in size: “now I have to replace outlets with GFCI outlets, now I have to add a gutter to the south side of the house, I need railings on all the stairs!” There will be many recommendations for maintenance, repair, bringing elements of the house up to current building standards/code, and it is up to you to prioritize what you feel is important.
Now what about renegotiating the price or asking the seller to make repairs prior to closing? This is a balancing act an experienced buyer agent can advise you on. It may depend on the market - if it’s a seller’s market and there were multiple offers and back up offers waiting in the wings, it is important to determine what is a “want” vs. a “need”. A “want” is something that would be nice to have done before closing, but not a deal breaker. A “need” is something that absolutely must be addressed in order for you to close (a deal breaker). In a seller’s market, a laundry list of small repairs could lead to the seller’s agent making calls to those back-up offers.
What about in a buyer’s market? You may have some more leverage, but keep in mind that presenting a 2 page list of all the defects in the house to the seller in order for a discount in any market, will not likely go well. In any market, asking to renegotiate the price based on minor wear and tear or cosmetic issues with the house is not the role of the inspection contingency. It is also important to realize that any defects that were disclosed or apparent at your first viewing or before submitting an offer are off the table in terms of renegotiating. A savvy listing agent will make sure you know everything ahead of time to avoid these discussions/surprises down the line.
Prior to making an offer here are some suggestions in order from most radical to least that might help buyers navigate the home inspection contingency:
Request a preliminary home inspection prior to making the offer, then, provided no issues are found, waive the contingency in the offer. This is a risk for buyers—they’ll be out the money they paid for the home inspection if their offer isn’t the winning one—but it may be a strategy that puts them on top.
Shorten the inspection time period from a default amount in the sales contract to something less than that (but still manageable). Keep in mind that, in a hot market, inspections are often difficult to schedule.
Agree to limit seller repair costs to a specific dollar amount, such as $500. This still allows the buyer to pull out if an inspection uncovers repairs that will cost more than that to fix. Or agree to not ask for repairs unless they exceed $500. This will assure the seller that the buyer won’t be asking for nuisance repairs. A seller who believes the home is in good shape might be inclined to accept this term.
The number one cause of deals falling apart is findings and negotiations post home inspection, but if you are prepared and informed and have a good agent in your corner, there is often a solution that satisfies both the buyer and seller!
