How do property inspections work?

Inspections are critical. In this tight seller’s market some buyers are waiving their inspections but as I mentioned earlier I think that is a bad move.

In most competitive situations right now my clients are largely giving up their right to object to minor items, but they are still making sure they have an inspection clause in the contract which allows them to object if the cost of repair for the items is more than $2,000. (that number may vary based on the price of the home and our aggressiveness on the offer).

I strongly suggest to every buyer that they get a general inspection of the home, a sewer scope and a radon test. The general inspection will cover all the major systems of the home such as HVAC (heating and cooling), roof, structural, plumbing, electrical, etc. (Quick tip: Inspectors aren’t really certified or regulated by anyone making the barrier to entry low. Unless you know someone you want to use you might want to use the inspectors we know, like and trust rather than the random one you find online)

If the inspector finds something that they are concerned about their role is to raise the issue and if it’s beyond their level of expertise they’ll suggest a specialist take a look and offer additional guidance.

The sewer scope is critical because you never know when there is a sewer line issue, even new homes can have them, and they can cost a ton to repair depending on location and the issue. How much? I’ve seen repairs range from $3,000 – $12,500 so be smart and spend the $120 up front to uncover any issues!

So let’s assume you have the home inspected and you find a few issues. Now what? At this point the process is to submit an “Inspection Objection” to the seller noting the issues and requesting either they repair the issues or give you cash in the form of a closing cost concession at closing so you can address the items later. I personally prefer the cash route, that way the buyer can control their own repairs & misunderstandings can be avoided between the buyer and seller.

So as a buyer what can I expect the seller to repair or pay for? The answer to this is it depends. (I know, that’s an annoying answer) But it does, it depends on the state of the market and the degree to which the seller can easily drop you and find another potential buyer. In this market, where there are more buyers than sellers, the seller has most of the leverage and isn’t likely to do a lot of repairs or a large cash concession. That said, I do sellers still agreeing to repair items if they are structural, health or safety related. For example, if the radon test comes back above the EPA suggested level then I still see sellers usually covering the cost of that mitigation.

Inspections and the subsequent negotiation between buyer and seller can be tense. If a deal is going to fall apart it usually happens in this phase. (Quick tip: Maintain an objective position rather than falling into an emotional one. It’s easy for both parties to feel a little frustrated at this point but if you keep your eye on the bigger picture and get your major items handled by the seller you’re doing the best you can in this market.

Remember, negotiating power is about having options and in this market the sellers know that you as a buyer don’t have a lot of other options. That gives them the leverage and the upper hand in most negotiations.

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