Real Estate Guide: How to Deal with a Bad Home Inspection
Posted by Bill True on
What to do when your home inspection is disappointing...
As a homebuyer, one word can fill you with both anticipatory excitement and dreadful foreboding. Yes, you guessed it - that word is inspection.
When your home inspection is 90% positive or 90% negative, making a decision to go forward or back out is generally easy. Or if you're hoping to snatch up a property at a discount because it "needs TLC," negative inspection findings are generally expected and easier to accept.
But when you get unexpected inspection reports that are not necessarily deal-breakers, but still disappointing, things are not so simple. For example, if you end up with a $30,000 pest repair bid, panic can set in... Can the sellers come up with that cash? Should you buy the home anyway and try to come up with the repair money?
If you receive unfortunate inspection results, take the following steps, and gather the information you'll need to make a reasoned and deliberate decision about buying the home.
1) Ask your agent to request an extension of your contingency or objection period to reduce your stress while you're gathering more information.
2) Assess how much work you are willing to complete after close of escrow. Consider both the cost as well as the personal aggravation.
3) Obtain three contractors' bids for the repairs in question (for both your own information and to heighten your credibility in renegotiations).
4) Ask the inspector if any of the repairs can be done later or can be done legally by an unlicensed handyman. Doing the work yourself or using an unlicensed repairman often means big savings.
5) Ask your agent to approach the sellers with these requests: (a) ask the sellers to pay a closing cost "credit" to free up some of your cash for post-closing repairs. If they reject this request, (b) ask them to complete some repairs themselves. Should this fail, (c) as a last resort, ask the sellers to reduce the price. Have your agent make the requests in that order. You want to prioritize the requests in a way that will result in the repairs actually getting completed, saving a price reduction request as a final effort to save the deal.
Sometimes a seller simply isn't in an equity position to budge. If this is the case, you may or may not be willing to move ahead. Whether you move forward on this property, or should you decide to find another property, you'll know that you thoughtfully worked your way through bad inspection results. As Buyer Agents for Sarasota real estate, we have guided many home buyers and real estate investors through the home buying and home inspection process.