Home Inspections & Repair Negotiations
If you’ve purchased a used car in the last few years, the dealer may have provided you with a CarFax report. It tells you about the history of the car, number of owners, major repairs or accidents, and mileage. There is no equivalent in the housing industry, but with the high cost of a home, knowing the condition is even more important.
Inspections are the way that a prudent homeowner will determine as best they can that there are no bad problems with the construction of the home or in major systems like heating and air conditioning. There are a number of different areas for inspections, with the ones you need dependent upon where the home is located and local custom and conditions:
- Mechanical (heating, air conditioning, etc.)
- Pests (termites, carpenter ants)
In most areas, the majority of these items all fall under one inspection done by a Home Inspector trained in these areas. However, there can be specialists hired for well and septic inspections. You can also call in experts if there are doubts about structural integrity when cracks are seen, even engineers if necessary.
Though it’s negotiable, the buyer generally determines which inspections they want and pays for them. A certain minimum level of inspection may be required by the lender. Once inspectors have done their job, they submit reports to the buyer with comments about conditions, and possibly recommendations for repairs. You may be able to get rough cost estimates from them or call a repair company if you’re going to ask for seller repairs.
There are very few existing homes out there that are so well-maintained that there aren’t things needing repair. From cracked windows to torn window screens and cracks in counter tile, there are always normal “wear and tear” items in inspection reports. The decision the buyer then must make is whether to try to get the seller to make the repairs, and which to ask for. Sometimes the lender will want to see the inspection, and the lender may require that certain repairs be completed before closing.
This is another negotiation point. If you’ve pushed the seller against the wall with the initial price negotiation, you may have a problem getting any repairs or money credits from the seller to fix items. Many lenders will not allow monetary credits from the seller to the buyer for repairs.
Remember that your goals and those of the seller are at odds at this point. If they agree to make repairs, they want the lowest bid work done, so that they keep as much of the purchase price as possible. You want lasting and quality repairs. The best approach is to have in writing in the repair negotiations to let your inspector return and approve the work.
A home purchase is a major event, so inspections are very important. Hire competent inspectors. Do not let real estate agents recommend an inspector. They can provide you with a list, but you need choices and control of the quality of the inspectors.