For sellers (and first-time buyers, too) the home inspection can be a bit unnerving. What will the inspector find? What impact will a potential defect have on the sale price? Will I insult the seller if I ask for too many repairs? These are questions everyone asks, so you shouldn’t be alarmed.
The best thing you can do as a seller or buyer is to first understand the process. This way you can best prepare your home for the inspection and know what to do if you get negative results.
An Overview of the Process
The challenge of the home inspection process is that so much rides on the outcome. The seller is almost always biased; he or she believes the residence is in better condition than it probably is. However, no buyer wants to purchase a house that has certain defects and issues. Often times, sellers may not even be aware of issues that are brought up in the inspection.
To give an idea of what the process looks like, here’s how home inspections tend to roll out:
• The buyer places an offer and the seller accepts.
• The buyer’s offer is likely to be contingent on the home passing a certified inspection.
• The home inspection will be arranged within 5 business days of the accepted offer.
• The actual inspection lasts between 2 and 4 hours, depending on the size of the home. The inspector will examine both the interior and the exterior of the home. Both buyer and buyer's agent are present during the entire inspection.
• The inspector will discuss certain aspects of the home as he/she examines the house, calling out specific areas they note are issues. Usually they will say upfront if the issue needs immediate attention or that an update that can be done when time/money permits.
How to Prepare for the Home Inspection - As a Seller You have only a limited number of things you can do to prepare for the inspection. Most of the preparation takes place in the years leading up to it; that is, how you treat and care for the home during the entire period you own it. In addition, during your pre-listing agent consultation, you will have discussed fixing items that are not functioning or in disrepair.
There are some steps you can also take as a seller:
• Mold and mildew. If you know of any mold or mildew in your home — including the basement or crawlspace –by all means, take care of it. Inspectors are attracted to mold like an animals to prey. If they find it, mold will be a issue down the road. Even if it gets fixed, the notion will stick with the buyer and may cause him or her to revoke the offer. Spend whatever it costs to fix it, or be prepared to go back to the negotiation table with the potential buyers.
• Roof and chimney. Another serious problem area is the roof and chimney. If you know of deficiencies there, it’s better to take care of them prior to the home inspection. The inspector will look carefully at your fireplace, too, so it’s wise to stay on top of any issues there. I always suggest you get the chimney swept prior to going to market for this very reason.
• Electrical problems. Inspectors don’t mess around with electrical problems. You can increase your chances of getting a favorable inspection by ensuring all light bulbs are working, no visible cords are hanging from light fixtures, and GFCI outlets have been installed in all areas near water (bathrooms, laundry rooms, garages, etc.). If they are not installed, trust me, they will be asked to be.
• Plumbing and Septic issues. If you know of leaky conditions, or basement water issues, have them addressed again before you put the home on the market. Sump pump and dry basement systems should be serviced every few years. If you have a septic system, have it pumped if it is due (every 1-2 years depending on household size). A separate septic inspection company will address the system. If your septic system is very old, has not been pumped regularly, or not well cared for, be prepared...your system has the potential to fail. This is a costly item (like a new roof or more) to fix.
• Clean the house. There are two reasons this is very important. While having a dirty home won’t necessarily have a negative impact in an inspection report, it certainly won’t help your case. Cleaning your house prior to the inspection shows the inspector that you care for your home. Also, your buyers will be in your home for a long time mulling over possibly reasons why they either paid too much or might have pulled the trigger too soon. If there are dirty dishes in the sink, dust on the tables, huge messes all around, this tells the buyer you may not have treated the entire home structure well in other ways and they could get spooked.
How to Prepare for the Inspection - As the Buyer
I always explain to my clients in advance that the inspection will yield a 40+ page report with photos and a very detailed explanation of every aspect of the home. Call-outs to items in the areas of electrical, structural, possibly plumbing and the HVAC are quite common.
No house is perfect - not the house you grew up in, not the house you might own yourself and certainly not the one you are buying. Be prepared to pay attention to the big issues and not nit-picky things. Also, cosmetic issues are most often not negotiable and likely should have been noticed while you were considering this home to purchase.
What to Do After the Inspection
As the listing agent, I always try to touch base with the buyer's agent midway during the inspection to see how things are going. If I am the buyer's agent, I will be candid if there are some major problems right then, so that there are no huge surprises.
Typically the report is emailed to the buyers that night or the next day. They must take the time soon after to go through it. Most of the items, if not all, are not "new" news - they have already been flagged and discussed during the inspection. It is now time to make a list and consult with your agent on what is reasonable to request.
I tend to advise my clients to stick to 'Health, Safety and Structural' issues. Importantly, even worst case situations are usually addressed by the sellers. I have seen septics fail, vermiculite (asbestos) found in attics, dangerous mold in basements and termite infestations. In every one of these situations, the seller has properly fixed the problems generally 100% on their dime.
As the seller, you’ll want to be reasonably agreeable when it comes to repairs because you have already put a lot of time into the selling process. It’s likely in your best interest to accommodate some fixes rather than allowing the buyer to walk away. Also, depending on the magnitude of the requested fix, it’s not likely to go away. Now that it’s been uncovered by the home inspector, you’ll need to disclose the issue to the next buyer if you don't address it.
I try hard to not have clients walk away or be scared by problems because almost every problem has a good solution. However, if the buyers get cold feet and truly have decided there are too many items to deal with, in the end, there is not much a seller or agent can do. Their minds will be made up.
Sometimes in the negotiations, if a seller has agreed to a less than desirable sales price, the agent can state upfront, the seller will not be interested in making a large number of repairs. The seller can also have the upper hand in a high buyer demand market. On the other hand, when a buyer has agreed to purchase at near or full asking price, it is natural to expect they will want things to be in good shape when they buy.
For non-major items, a seller can agree upfront or wait to get bids from contractors before responding. By getting a range of prices, you may be able to show the buyer that the problem isn’t as big a deal and they may have assumed. You could offer an "average" cost as a closing credit if you are not interested in dealing with fixing the issue (s). If the requests are not expensive, I often suggest sellers just take care of them. It shows good faith and keeps the buyers engaged and moving forward.
Looking Ahead
No matter what, a good agent on both sides will ensure that the inspection process is handled smoothly and educate clients in advance of the inspection. Once this process has passed, there is usually smooth sailing ahead towards the closing table.
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