Step 12 for Home Sellers: Inspection Response

In the previous step we talked about the home inspection. A few days after the inspection, the Buyer’s Realtor will send us a document called the Buyer’s Inspection Response.  Often- and hopefully- the Buyers will also send us the full Inspection Report.  We will review both in detail and prepare our next major negotiating piece: the Seller’s Inspection Response.

What is the Buyer’s Inspection Response?

The Buyer and the Buyer’s Realtor will have had first access to the full report.  They will have studied it, made lists, and decided what items they want to ask the Seller to fix.  These items will be described on the Buyer’s Inspection Response.  This is a legally binding document- they are saying that they will buy the home if the Seller does the items listed on the Response.  Their Response will give a time by which the Seller has to respond.

Why Should the Seller Read the Entire Inspection Report?

Reading the entire report can leave a seller discouraged, but it is best for you to read every word.  You will learn more about the issues the Buyer has asked you to repair- more about why the Inspector flagged these issues and how bad they seemed, but you will also, hopefully, learn that there were some things that the Buyer chose not to ask you to fix.  We have emphasized throughout these steps our philosophy that a good transaction can be a “win-win” story, and this is where we hope to see it again.  A Buyer who asks for everything is unlikely to get to the closing.  Similarly, a Seller who refuses to do any repairs is also in danger.  All homes have some issues.  It is a Buyer’s right to expect a home that is in good working order.  You should expect to fix some things and you should expect not to deal with others- but which is which?

What Should a Seller Fix?

So what does it look like to respond appropriately?  The truth is quite simple:  A Buyer can ask for anything but there are some general guidelines for getting from here to the closing table.

In general, Sellers should expect 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 can be compelled to buy a new furnace.  If it still works, a Seller will likely say this is yours to know and prepare for in your budgeting for the future.


After we Review the Buyer’s Inspection Response, What Happens Next?

Before the deadline, we will prepare either agree to address all the items on the Buyer’s Inspection Response, refuse to fix any of the items, or prepare our legal response document which is called the “Seller’s Inspection Response”.  If all the repairs are reasonable or minor, fixing them is legitimate and makes for an easy step forward.  If we refuse to do any, and some of the repairs are in the category of safety, health, or structure, the Buyer can ask to be released from the contract and ask to have his or her earnest money returned because you, as the Seller, have not acted in good faith.  The most likely outcome is the third one: we prepare a Seller’s Inspection Response.

I mention the deadline, and it is really important!  If we do not respond by the deadline- even if our response is to say we need more time to get estimates for repairs- we are legally agreeing to do all the repairs requested by the Buyer.  So we, at Watson Concierge Realty Group, are very careful to watch all deadlines closely.  During the time we have- hopefully about a week- we will help you find contractors who can come out and look at the items the Buyer has asked you to fix so that you can know how much the repairs of various items will cost.  We will help you know which items meet the health, safety, and structure criteria we mentioned.  Sometimes you fix more because it is easy or inexpensive, but we will strongly encourage you to fix the health, safety and structure items because if you don’t you will have to disclose them going forward.

What that means is that if you refuse to fix a leaking roof and go back on the market to find a new buyer, you will have to TELL the new Buyer that you know your roof leaks but you aren’t going to fix it.  It is unlikely that another buyer will be ok with this either, so these items are often in the category of “fix it now or fix it later.”  May as well fix it now.

What if we Can’t Agree?

Hopefully both sides can reasonably find the point where health, safety, and structure are addressed by the Seller and the Buyer is satisfied with leaving appearance and routine maintenance for the future.  If not, the deal may yet fall apart at this late stage.  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 comes up again.  But there are no guarantees.

If there is just too much wrong with the house, if the Buyer is utterly unreasonable in their requests, or if the Seller cannot or will not address items the Buyer requires, then we will begin the process of trying to find a new buyer.  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                     

Posted on December 3, 2018 at 2:30 am
Maureen Watson | Category: Steps for Sellers | Tagged

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