This is the third in a four-part series we’re doing on home inspections. In the first part we focused on all the inspections that take place, while in the second we focused on an actual inspection addendum. in this entry we’ll look at how to review the inspections you receive.
So you have an accepted offer on your dream home and your home inspector sends you his report. First, make sure your Realtor has also received a copy of the report. Sit down with your Realtor and review the report. Bear in mind you are under a time constraint here – you need to respond to the seller within the agreed to time frame.
OK, a number of things showed up on the inspection – as they usually do. I always recommend
categorizing these issues into two categories – I call them “minor” issues and “major issues”. A minor issue might be a torn screen or a missing window crank etc. and a major issue might be a furnace with a cracked heat exchanger etc.
My advice to my buyers is not to worry too much about the minor issues and address the major issues. Be aware that sometimes major issues pointed out by an inspector turn out to be minor issues. For instance, there might be a small amount of mold in the corner of the basement; about the size of your thumb. The inspector tags the house as “having mold”. Well, most likely the house is not infected with mold (accept for that small spot) and the issue can be remedied easily.
So after your discussion with your Realtor you need to decide how you are going to respond to the seller. If you got a great deal on the house, the seller may not be very willing to make the repairs you request. If not, you will need to decide what direction you wish to take.
That said, you will need to make a written response to the seller. If you are not requesting any repairs that’s what the response should say. Then you might not need to read what follows. If you are requesting the seller to make repairs, then read on.
Take a look at the “Response to inspection” form we us in the Dubuque market – read it over. This form can be used to respond to multiple inspections. Notice under “BUYERS RESPONSE” that it says (2nd paragraph) “In order for the Buyer to proceed with the Purchase contract they require seller to”: – this is where you will list the repairs you are requesting the seller to make. Your realtor will guide you through the proper use of this form. So you list repairs 1. 2., & 3. whatever they might be.
Your Realtor will see that the response form is presented to the seller.
Under “SELLER’S RESPONSE” the seller has 3 options: 1. “To complete the repairs requested”; 2. “Not to complete the repairs you request”; or 3. “Other” – for instance the seller says I will make repairs 1 & 2 but not repair 3. If they choose 1 then no further negotiation is required. If they choose 2 or 3 then the form is returned to you for a decision on how you want to proceed.
Your options will be 1. “Accept the seller’s response” 2. “Reject the seller’s response” or 3. “Submit another response form requesting different procedures for the seller to complete in order for you to move forward with the purchase”. If you select 2 then negotiations end and you go your merry way –without the property. If you select 3 then you are leaving negotiations open and hopefully you can arrive at an agreement with the seller as far as repairs go.
Unless there is an overwhelming reason, I rarely recommend that a buyer not negotiate requested repairs with a seller.
So there you have it!! At this point, whether or not you move on toward closing on your new home depends on whether or not you are willing to negotiate inspection repairs if the seller is not willing to make the repairs, or is willing to make some of the repairs you request but not all of them.
I have seen many buyers lose their dream home because of requested inspection repairs. Remember, no house is perfect – not even newly constructed homes. It seems the older the house the more apt you are to encounter some issues. Be reasonable in your negotiations and you will usually be successful.
Next time we will wrap up this series with a summary of what we have talked about in regard to inspections.