What to do if your home inspection uncovers major repairs

After making a few (or a few dozen) offers, you’ve finally had a seller accept your offer. All has gone to plan -  until your inspection report comes back showing a major issue. That begs the question... what comes next?

Whether it's a foundation crack, mold and rot, or roof replacement, it can be overwhelming to know what to do next. But don’t fret, we’re here to help. Here is what you need to know your home inspection discovers a major issue.

What is a home inspection?

But first, let's cover the basics.

A home inspection is a visual evaluation of the entire home, including the plumbing, heating, air-conditioning, and electrical systems. It also includes physical structures such as the roof, doors, windows, floors, basements, attics, and ceilings.

A good home inspector should walk you through the property, helping you understand any defects and how severe they are. The goal is for you to understand the condition of the property so you can make an informed decision (on whether to purchase or not).

Please note, for liability reasons, home inspectors won’t give an opinion on whether you should purchase the property, or how much you can expect to pay for repairs. Their job is to tell you if there is an issue, how serious it is, and if you need a more thorough inspection.

Why you should get a home inspection

There are a lot of benefits to getting a home inspection. Here are a few important ones.

1. It helps you understand the property.

If you didn’t know, home inspections are beneficial for both buyers and sellers.

As a seller, it gives you a chance to make necessary repairs before listing, helping you fetch a higher price. As a buyer, it helps you understand the condition of the home before you commit to buying it.

2. Untrained eyes can’t spot everything.

A good home inspector (depending on state regulations) is licensed and certified to assess property conditions. This means that they are specifically trained to spot out defects and help you understand the properties' condition. With one of the biggest purchases of your life, its best to use a professional.

3. Budget for future repairs

It’s important to remember that just because the inspection doesn’t find any current issues, that doesn’t mean you won’t need to prepare for repairs. A home inspector can give you rough estimates on the life span of certain systems and structures so you can be prepared for the future.

4. Leveraging negotiations

As long as you include the proper contingencies in your offer, you are able to renegotiate using your inspection report. Based on the number of repairs needed, you can ask for a lower price or ask them to fix the repairs before you move in. If the sellers are unwilling to budge, you can walk away with confidence that you are making the right decision.

What to do if the inspection uncovered major repairs

If the home inspection uncovers major repairs, there are a few things you should do to make sure you don’t overpay for a property in bad shape.

1. Find the severity and cost of repairs

Your first step should be to understand just how severe the damage is. You can do this by chatting with your inspector or getting a more thorough inspection if needed. You’ll want to know if there are any code violations, safety hazards, or if they can lead to bigger problems.

Next, your goal should be to learn how much this repair will cost. There are a few ways to do this. If you got your inspection through Inspectify, your report will come with a free repair cost estimate. We use proprietary data and average pricing for your area to give you an idea of what you can expect to pay.

Alternatively, you can try to contact local contractors to get a quote. However, this option is very time-consuming and requires coordination with the seller. Looking up average prices online could also work, but you should take those averages with a grain of salt.

2. Renegotiate terms of the sale

By the time you get the home inspection part of the sale process, there’s a good chance that you’re serious about the sale. After getting the home inspection report, you can request the homeowner to finish up the repairs before moving in if you'd like to proceed.

Alternatively, you can negotiate a lower closing price based on the estimated cost or get repair credits. If you have a real estate agent, it's best to let them negotiate on your behalf and send them a copy of the new report to give them an upper hand in the discussion.

3. Decide whether to buy the home

The purpose of a home inspection is to identify any major and minor concerns with the home before closing the deal. The inspection report serves as a contingency in the sale contract.

If there are any significant issues, this contingency gives you a chance to back out of the sale. You will likely not incur any penalties if you do so within a specific duration, except for any earnest money already provided.  If they aren’t willing to meet your new terms, walking away could be your best option.

4. Get a re-inspection

If the sale goes on as planned, you’ll want to make sure the repairs were done properly. A reinspection is a short (and inexpensive) inspection to make sure the repairs were done and there are no lingering issues.

Which repairs are the seller’s responsibility?

Before closing a sale, any significant problems that violate building codes or pose safety risks should get resolved no matter how expensive. This includes electrical systems, plumbing, HVAC defects, and termite and roof damages.

As a seller, handling the major repairs is beneficial regardless of whether the current potential buyer closes the sale. If you fail to do so, the next buyer will still find the same issues. Lenders may also fail to approve any loans if the home has significant safety hazards, building code violations, or structural defects.

Additionally, buyers who back out have a legal obligation to report any issues highlighted by the home inspection report in the interest of future buyers.

Minor cosmetic issues such as wear and tear are discretionary; you have a choice to address them or not. Buyers will likely want to request expensive repairs are fixed, but might not want to haggle over small defects.

In some cases, instead of repairing the damages, you can ask for a discount on the final closing price. This means that it’s up to you (the buyer) to repair the defects yourself. It varies from sale to sale depending on the priorities of you and the sellers.

Frequently asked questions

1. What if the sellers won't budge?

If you cannot agree with the buyer on the repair costs, you have the right to back out if you have an inspection contingency in your offer. The contingency clause on the contract allows you to decline the deal without any penalties.

You’ll have to decide whether it’s worth continuing with the sale or if you should back out. When deciding, consider your budget, how much you like the home, and how difficult it will be to find another one you like.

2. How do I make sure the repairs were done correctly?

Cosmetic repairs are easy to verify, but some significant repairs need a trained eye and proper evaluation knowledge. After completing all the recommended repairs, it's best to consult a professional for a re-inspection.

They are in a better position to determine the quality of work and materials used.

3. How can I make this process easier?

Inspectify makes home inspections easier and faster. We have thousands of highly qualified inspectors across the country ready to help you. We provide you with free repair cost estimates for your entire inspection report, making it easy to renegotiate. You can book an inspection in just a few minutes.

Conclusion

We hope you found this guide useful! Still have unanswered questions? Feel free to email us at hello@inspectify.com or leave a message below!

Happy holidays and house hunting!