Step 11 for Home Buyers: Your Inspection Response

Several steps ago we talked about attending the home inspection and getting all the information you could from the inspector while he or she is in the property you hope to buy.  At some point after the inspection, you will receive a long and very detailed Inspection Report.  Some inspectors provide that report immediately as they enter info into the software as they perform the inspection while others go back and input the info and construct comments after the inspection.  The immediate report is great, and I have some inspectors I really like who do this, but don’t be fooled – speed is only great if the inspector who does the inspection is too!   I can help you find a quality inspection provider and we will be sure the report is available with plenty of time for you to read through it, go over it at length with me, then discuss your official Buyer’s Inspection Response.

What is in the Inspection Report?

The inspection report is going to identify many items that are not in perfect order.  That is the point of the inspection.  As a result, reading the inspection report can leave a buyer discouraged – the house you thought was nearly perfect has some issues you didn’t know about.  The truth is that all homes have some issues.  The purpose of the inspection is to provide some expert eyes to help you see the status and respond accordingly.

What Should we Ask a Seller to Fix?

So what does it look like to “respond accordingly”?  In other words, what should the Seller fix and what is reasonable to leave for the new buyer?  The truth is quite simple:  This is the second major phase of negotiation in your buying process.  You can ask for anything, they can agree to anything – or nothing.  That said, there are some general guidelines to getting from here to the closing table, so let’s talk through those.

In general, Sellers should be expected to address issues related to health, safety, or major structural soundness.  Examples: they should expect to be asked to address mold, infestations, issues of fire safety or electrical shock hazards, roof leaks or issues with floor joists or foundation.  These are issues that clearly fall into the above categories.  The reasons these categories are important is that these are, again generally, reasons that the buyer can refuse to purchase the home and still get their earnest money back.

Conversely, Buyers should generally expect to address later themselves issues related to decorating, taste, routine maintenance, and aging mechanicals.  For example, when the inspector says that the furnace is “approaching its expected life” it is unlikely that the Seller will be compelled to buy you a new furnace.  If it still works, they will likely say this is yours to know and prepare for.  And, you could have – and should have – looked in the furnace closet when you viewed the home to note that the furnace was less than new.  You can ask for carpet to be changed out, or for walls to be painted, or for HVAC to be serviced before closing.  Sometimes Sellers will agree, especially if there are not other major repairs they really MUST do.  But if you back out over one of these things you will likely lose your earnest money.

Can I Ask for Anything I Want To?

This stage of our negotiation with the Seller is very important, and this is where you need an agent who you have come to trust and believe.  And you can hope that the agent representing the Seller also has a good relationship with their client.  Many transactions fall apart over the inspection responses, but usually they should not.

My standard procedure here is to ask that we meet, hopefully in person, to walk through the report.  We will list all the issues so that you have the list later on so that you are more likely to remember the smaller items that remain yours to complete later on.  From that list we will talk first about items that you should insist upon – those items that make the house unsafe, unhealthy, or un-saleable in its current condition.  Those we will surely ask the Seller to address.  Next we will return to the longer list and talk about what else, if anything, you would like to ask for and whether or not doing so is wise – this conversation may well hinge on how expensive the “have to” list is.  You are the determining vote, but advice here is very valuable.  At this point you have already spent money and time on buying this house and have hopefully begun to get excited about taking ownership … asking for too much or asking for the wrong things can end you back at Step 1 if the deal unravels.

After we finalize our list, which is called our “Buyer’s Inspection Response”, then you will sign it.  We will decide upon an appropriate timeline for the Seller to respond – we usually give a week, especially if there are items on the list for which the Seller may need to have repair people out to give estimates to fix.  I will then forward our Response to the Seller’s agent and confirm that they have received it.

Once we Send our Inspection Response, What Happens Next?

Before the deadline we set, we will receive a document called “Seller’s Inspection Response”.  The Sellers will either 1) agree to fix all the items you requested, 2) agree to fix some of the items you requested but not all of them, or 3) refuse to fix any of them.  Based on the Seller’s Response, we will meet again and decide what to do.  You can either accept what they are willing to do, propose another plan, or refuse to go forward and ask for your earnest money back.

How often do deals fall apart over the inspection?  Well … it is one of the more emotional portions of the transaction on both sides.  This is where the “win-win” mentality I talked about related to the Purchase Agreement comes up again.  If you have good counsel and are reasonable in your requests, and if the Seller has good counsel and is reasonable in his responses, most deals will go forward.  However when one or both sides go for a “win-lose”, or are unreasonable, or frankly if either side is very surprised by the extent and cost of repairs needed, then the deal can fall through.

If there is just too much wrong with the house, or if the Seller cannot or will not address items which you should legitimately require, then we will begin the process of trying to get your earnest money returned and we will go back to Searching for another property.  But we hope to succeed here at coming to agreement (we usually do!) and moving forward – we are getting close to the end now!

If you have questions about this item or others, get in touch:

Maureen Watson: 317-752-3377                               mwatson@c21scheetz.com

Posted on November 19, 2018 at 8:36 pm
Maureen Watson | Category: Steps for Buyers | Tagged , , ,

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