Home inspections help buyers better understand the quality of the home they’re considering and what steps to take before moving forward with purchasing a new house.
After receiving the initial report, buyers and sellers can take several potential paths forward depending on what the inspector finds.
Positive inspections, with little to report, provide peace of mind that the home is ready to go. By contrast, inspections that reveal major issues can lead to lengthy negotiations to cover repair costs.
Reviewing the home inspection report
Home inspections are third-party assessments that analyze the major systems of a house. Once an inspection is complete, the licensed inspector will break down their findings in a home inspection report.
Common areas that home inspectors examine include:
- Roof for potential damage and longevity
- Foundation for signs of erosion or dampness
- Electrical systems for up-to-date wiring and components
- Plumbing and drainage for blockages or leaks
- Included appliances to ensure they work properly
Your inspection report will provide a detailed list of the inspector's findings that outline the necessary actions to resolve any issues and that will categorize the problems as either major or minor.
It’s important to review your report with a realtor or real estate expert to help you understand any issues the inspector finds.
Working with a real estate professional helps you distinguish between serious code violations and cosmetic fixes, and can also help you identify which items are worth negotiating.
In extreme cases of structural damage, such as foundation or major roof issues, inspection reports can also keep you from purchasing an unsafe home.
Negotiating after the inspection
If a home inspection reveals significant issues, realtors work with their clients to find the best path to resolution. The most common routes your realtor will take include:
- Repair requests
- Price reductions
- Credits toward closing costs
If an agent negotiates for too many things, the seller could walk away. And if the agent negotiates too little, buyers may be left with a house that has significant issues.
Common sticking points that may cause pushback are:
- Requests that sellers perceive as unreasonable or pushy
- Time constraints that prevent the seller from making repairs
- Backup offers from potential buyers who are negotiating less
During the negotiation process, agents attempt to strike a balance between covering repairs and letting some go untouched. Skilled agents help buyers get the best deal on their home — all while helping both sides feel like they won.
For example: The buying agent may convince the seller to repair the roof before closing and negotiate for a credit to be applied toward a new HVAC system, rather than requesting both updates before closing.
This strategy keeps the process moving smoothly, reduces the seller’s workload, and helps the buyer cover the costs of upgrades after moving in.
Potential outcomes
Not all real estate negotiations look the same. Agents will typically push for one of the following outcomes when negotiating issues after reviewing a home inspection report.
Outcome #1: The seller agrees to fix issues before closing
Significant repairs for code violations, such as updating outdated wiring or plumbing, are often necessary before insurance companies will cover a house. Buyers getting mortgage financing will need to show proof of insurance before they can finalize their home loan.
Making these repairs can help sellers more easily offload the home.
Outcome #2: The agent negotiates for a price reduction
Some issues found in an inspection are easier to overlook if the home needs future repairs.
For example, if a roof is nearing the end of its lifespan but doesn’t require an immediate repair, a lower selling price may be mutually beneficial.
Outcome #3: The seller offers a closing credit to let the buyer handle updates
In this instance, the buyer is willing to handle some repairs immediately, but the repair costs don’t come out of their pocket.
Adopting this strategy can facilitate a quick sale and make the property more appealing to buyers. One great example of this is a credit for updating appliances, which gives the buyer the freedom to make changes as they see fit.
Outcome #4: The deal falls through due to serious issues or failed negotiation
Not every negotiation is a win for agents and buyers. When this happens, it could be a side effect of a seller who is unwilling to budge or a home that requires more work than it’s worth.
To ensure that your home negotiations go smoothly after a home inspection report, it’s essential to work with a qualified real estate agent who understands your market.
And if you work with an agent that charges lower-than-average commissions, you may need to negotiate less when sellers consider the reduced costs of working with your agent at closing.
Clever Real Estate pre-negotiates lower commissions (just 1.5%) with top agents all over the country, then helps you find one in your area. Get started on your agent search by filling out a short quiz!
In cases where home inspections reveal significant issues and a resolution can’t be reached, some buyers may need to consult a real estate attorney.
Working with attorneys can help buyers apply more leverage to the situation and strengthen the buyer’s case for repairs to be covered.
If you’re a buyer and can’t reach an agreement with the seller, a contingency clause in your buying agreement gives you the option to walk away if the inspection reveals significant damage.
Situations like significant structural damage, system updates, or pest infestations (like termites) can all be grounds for buyers to walk away from the deal at closing.
What to expect after a home inspection
Home inspections are valuable tools that help buyers and sellers move one step closer to closing on a home sale. They provide clarity on a home’s condition, can open the door to negotiation, and even help buyers avoid a bad investment.
Understanding your options after a home inspection is critical for ensuring a smooth home sale.
Working with a trusted real estate agent and having contact with a real estate attorney — in case things go wrong — will help you to make the most of the buying process.
Finding an agent can be as easy as filling out a short quiz for Clever Real Estate. Clever's matching platform connects buyers with top local agents from reputable brokerages like Century 21, Compass, and Re/Max. Buyers who use Clever also have the opportunity to find their dream home at a discount through Home Buyer Rebates.
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FAQ
FAQ
What should I do immediately after receiving the home inspection report?
It’s important to work with someone you trust when reviewing your home inspection report. Your agent can help you understand which issues are serious and how they may impact the home’s value or safety.
Can I back out of a home purchase after the inspection?
Yes, if your contract includes an inspection contingency and the issues found are unacceptable to you. Inspection contingencies act as a safety net to protect you from being locked into buying a home with serious problems.
What if the seller refuses to make repairs?
You’re not stuck in a bad deal if the seller refuses to make repairs. You can negotiate a credit, accept the home as-is, or choose to walk away, depending on the terms of your contract.
Is the seller required to fix everything on the report?
No, sellers are not obligated to fix every issue unless the contract specifically requires it or if they failed to disclose known defects. It’s best to strike a balance between securing significant repairs and addressing minor ones after the sale.