Step 16: Read the Inspection Report
Once the inspection report comes back, make sure to read it thoroughly. Do not be surprised if this is a lengthy document (sometimes 30+ pages long) and can have multiple things listed as issues with the home (could be 20 items or more). This is pretty typical. There will always be at least a couple issues that arise, and depending on the condition of the home, there can be more issues with some homes than others.
There is a big difference in the type of issues that can arise. There can be cosmetic issues listed such as a broken door handle or chipping paint, or there can be bigger issues such as part of the roof is leaking. The inspection report is an informational report for you as the buyer and not necessarily a “to do” list for the seller. We should really only concern ourselves with the big issues like safety defects or the appliance/mechanical issues. Here are some tips for reading the inspection report:
- Pay attention to the items listed that are related to electrical, plumbing, foundation, roof, or water intrusion as these items can be very expensive to repair.
- If you notice any serious items listed on the report, such as the ones above, decide if you would like any additional inspections completed. Keep in mind that you will be responsible to pay for each additional inspection to be performed.
- Make a list of items that the seller must repair in order for you to follow through with the purchase of the home.
- Make another list of the items that you would like the seller to fix, but are not a must and would make it so you are still willing to follow through with the purchase.
- Make a third list of the items that you feel you can fix yourself or don’t really need to be fixed.
- Once you have completed doing the above, send us your lists and we will help you review them to see if you may have missed a crucial repair, or are not asking for enough, or too much, etc.
- Remember that you can ask the seller either to repair the items or you can ask for a credit for you to fix the items after closing. These credits will go towards your closing costs. For example, if you asked for $1500 as a credited amount for repairs, than you would bring to closing $1500 less to closing than you were originally planning to do. This way you are saving that money you asked for to fix the needed repairs after closing is taken care of.
- Keep in mind again the most important items on the inspection report are:
- Safety Issues
- Structural issues
- Non working appliances
Again, we should not be asking for cosmetic items to be fixed such as chipping paint, gutters to be cleaned out, a broken door knob, etc. No existing home is going to be perfect unless it is new construction. It is important to accept the house with some cosmetic flaws. If it is not up to your standards than we need to find a different house. Keep your focus on the above important items listed as far as things that need to be repaired.
Once we have gone over a strategy and agreed upon it, we will present our needed inspection repairs to the seller’s agent. From this point there will most likely be some negotiations. If the repairs are minor than negotiations will most likely go quick. However, if contractors need to be brought in to fix said items then expect the negotiations to take anywhere from about 3-7 days.
If we are able to come to an agreement then the amount we agreed upon will either be credited to you at closing, or if they agreed to fix the items we agreed on then items will need to be repaired before closing. In the case of the latter, the items will need to be fully repaired before the final walkthrough with receipts proving the work was done ahead of time. If we are not able to come to an agreement for the satisfaction of the fixed issues, you then have the right to cancel the contract instead and get your earnest money refunded to you.
Also, as part of the inspection negotiations we can ask the seller to provide a home warranty for the first year. Let us know if you would like to include this as part of the inspection negotiations.