Step 15: Read the Inspection Report

Once the inspection report comes back, you need to review it thoroughly. Don’t be surprised if it’s 30 + pages long with more than 25 “issues” that need to be addressed. This is typical. We’ve never seen an inspection report that didn’t have at least 5 items that needed repair.

There is a big difference between small mainly cosmetic repairs such as recaulking a shower or repairing a broken microwave handle and large issues such as sewer back up in the basement. Remember, the home inspection report is an informational report for you, the buyer, not a to-do list for the seller. We should only be concerned about structural issues, safety defects, or appliances/mechanicals not working.

Therefore, here are our tips for reading the inspection report:

  1. Pay particular attention to issues relating to the electrical, plumbing, roof, and foundation, or water intrusion issues, as these can be big-ticket items to repair.

  2. If there are any big-ticket items that are concerning to you, decide if you want to have additional inspections performed. We can bring in a structural engineer, a sewer inspector, an electrician, or a pest control company. You’ll be responsible for paying their fees.

  3. Make a list of items you feel the seller must repair for you to be willing to close on the purchase.

  4. Write a second list of items you’d like the seller to fix but which would not be deal-breakers if they aren’t fixed.

  5. Make a third list of the items you’re OK with fixing yourself or feel don’t really need to be fixed.

  6. Once you’ve done this, we’ll review the lists with you and suggest changes if you’re leaving out an expensive repair, not asking for enough, or asking for too much.

  7. Keep in mind that you can ask the sellers to repair items or provide a credit for you to fix the items yourself after closing. Credits go towards your closing costs. For instance, if we negotiate a $2,000 inspection credit, you’d bring to closing $2,000 less than originally expected. That way you have that $2,000 to complete needed repairs after the closing.

  8. Remember that the crucial items on the inspection report are:

    1. Safety issues

    2. Structural issues

    3. Components such as appliances or systems that are not working.

After Reading Carefully:

Once we’ve agreed on a strategy, we’ll negotiate the inspection repairs with the seller’s agent using a Buyer’s Inspection Response. If there are only a few items that need to be fixed, the negotiation will probably go quickly. However, if contractors or tradespeople need to be brought in to give estimates, expect the inspection negotiations to take 3 – 7 days.

It is important to note that the sellers will respond with their Seller’s Inspection Response to our repair requests. It is best to hang tight and be patient at this time.

The repairs need to be completed by the final walkthrough, with receipts proving that the work was done sent to us ahead of closing. If we are not able to come to an agreement, you have the right to walk away from the contract and get a refund of your earnest money.

Keep in mind, as part of the inspection negotiations I can also ask the sellers to provide a home warranty for the first year.

 

 

 

Posted on November 20, 2018 at 9:51 am
Lee Ann Balta | Category: Buyer Step by Step

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