A home inspection is performed for most home purchases and 100% of those that need financing, but what if the home inspection finds issues?
Firstly, don’t panic. A home inspector’s job is to find issues and in a full home inspection issues will be found. Some may affect the structure such as such as roof problems, some may affect safety such as electrical issues, some may be cosmetic like minor settlement cracks in a concrete walkway.
Secondly, I recommend to categorize the issues. There is no wrong answer here, just categorize the issues based on the importance to you.
- 4 Point – must be corrected before close in order to get insurance
- Major but not on the 4 point. Seriously impact the function or safety of the home, such as windows sealed shut or garage door opener not working.
- Anything that affects your enjoyment of the home. This could be minor items such as the fan on the patio isn’t working degrading the outdoor space, or more serious such as the sprinkler system is not working.
- Everything else such as a dripping faucet or non functioning garbage disposal.
Category 1 will have to be done. 2 and 3 will have some that are “Must Dos” for you.
We are only talking about Florida only here. If the purchase contract is “as is with the right to inspect” then a buyer has 4 options:
1. Ask for repairs
Ask the seller to fix certain items. 4 point items have to be done and there shouldn’t be any argument. After all if the seller declines and you walk away, then the next buyer will find the same issues and the seller will be back in the same position. Everything else is negotiable.
When deciding what to ask for, consider how strong your offer is, also consider the Seller’s ability to get things done. A seller that has already moved out of area may have difficulty in getting trades to address issues. On the opposite side, if the home is underpriced and there is demand, then a seller may prefer to put it back on the market rather than deal with an overly picky buyer.
2. Ask for a credit instead of repairs
Often it is more effectoive to ask for a credit, rather than a laundry list of small items. If you are handy and can fix that dripping faucet yourself after close, then that additional credit could really be worth it.
3. Walk away
This typically only happens when an inspector uncovers major issues that point to potentially a bigger problem, such as unpermitted structural work. Under a standard FL As Is contract a buyer can walk away during the inspection period for any reason. As long as the contract is followed, the buyer should be able to retain their earnest money deposit.
4. Do nothing
The final option for a buyer is to do nothing. If the inspection items are minor or don’t concern the buyer, then the buyer may just continue with the contract with no changes.
In reality the agreed solution is often a combination of some work being and a credit being given.
Get Everything in Writing
If repairs or a credit are agreed to, then get it in writing signed by the buyer and the seller. This is usually in the form of an Addendum to Contract prepared by the buyer’s realtor. Often it will specify the seller will provide receipts and photos to show the work has been completed. For 4 point and more serious items I recommend a reinspection by the inspector who did the original inspection. I’ve had cases where the buyer has accepted contractor receipts as confirmation of completed work only to find after close the job was only partially completed.
The Bottom Line
A home inspector will find issues an inspection. How you move forward depends on severity, impact on insurance, impact on your enjoyment of the home and strength of your offer.
If you have questions about inspections or are considering buying or selling a home in St Pete, Pinellas County or the greater Tampa Bay area then contact me below.
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