Home inspections are a key part of the real estate sales process. A home sale agreement often is contingent upon passing a home inspection performed by a certified home inspector.
Benefits for the Buyer
- Regardless of the age of the home, inspections can expose issues not seen by the naked eye. Whether it’s bad plumbing or wiring, a buyer will get a full report of any issues. This can provide peace of mind to a buyer that the house is in good condition.
- If an inspection shows minor problems with the home, the buyer can use this to his/her advantage during the negotiation process. A buyer might ask the seller to fix the issues or lower the asking price.
- When major issues are reported, buyers have an option to opt-out. This allows the buyer to get out of contract on the home if the repairs are too extensive.
The largest benefit to a buyer is to really know what you are purchasing. The more you know now, the less shocked you will be later on. A buyer can also learn about potential maintenance that he/she can do to the house to avoid any additional repairs.
Strengths for the Seller
- Sellers generally have a tougher time shelling out the money for a home inspection. However, if the seller completes a pre-inspection, they have more control in a lot of areas. As the seller, you can choose who you want to inspect the house. This means you can hire a licensed professional home inspector and know that any issues that come back are in fact real issues.
- If a seller has an inspection done on the house, he/she can make the repairs at their own pace and budget instead of getting hit all at once on negotiation day.
- The seller also has justification on the listing price. Any repairs or upgrades the seller made can add more value to the home.
When a seller lists their house on the market and notes that they have a pre-inspection report available, this not only offers transparency but it builds trust between the buyer and seller. In this case, both parties benefit!
What to Negotiate
- Major deficiencies. When major problems within a house, such as a mold or pest infestation, the buyer can withdraw from the sale without penalty. Mold remediation is expensive and the seller’s options are to reduce the price to cover the cost of the repairs, do the repairs or face the possibility of losing the sale.
- Large repairs. The repair of a rotting roof, an aged HVAC system or leaking pool is negotiable items between the seller and the buyer, as are all large repairs. A licensed contractor can supply an estimate of cost for the repair and the question of who pays for this is often divided between the seller and buyer, as the repair, while necessary, is considered an upgrade.
- Small repairs. Appliance failures, plumbing leaks and other small repairs are often ignored during negotiations. The buyer may request that the seller removes inoperative appliances, and the seller may offer to repair or replace plumbing fixtures. A set amount of money to cover these repairs can be agreed upon by both seller and buyer, with the costs paid to the buyer out of escrow.
A home inspection is worth the cost and can be a powerful tool in the right hands to obtain the optimum price for your next home.