How to deal with a bad inspection?

said on April 7th, 2010 filed under: Information for Sellers

Inspections that reveal a lot of issues aren’t fun, particularly when you are on the receiving end of a troublesome report.

One important thing to remember is that most inspectors are independent contractors. No two inspections will reveal exactly the same issues (though you hope for some consistency!), and the weight given to each of the specific issues will depend upon the individual inspector. Some of them are focused on water issues, while others are electronics fanatics. It varies.

What to do if you are a seller?

If you’ve got the time and the money, hire your own inspector prior to listing your house and address the items that are problematic. Not only will it improve your bragging rights (new water heater installed in 2010, bathroom tile re-grouted in 2010, etc…), but it will give you a hint of what might come when the buyer brings their own inspector to your house. Insist on a written report. That way, should there be a difference of opinion, at least you have something in writing to send back with your rebuttal.

Unless you are selling your place “as-is” the regional contract for Maryland/DC/Virginia specifies that certain items must be in normal working condition at settlement, specifically: appliances, heating, cooling, plumbing, electrical systems and equipment, and smoke and heat detectors (as required). The word normal is often abused. Remember, “normal” doesn’t mean new, nor does it mean something is being held together by a paperclip. If the inspection report reveals problems in any of these areas, they have to be fixed. And if they can’t be fixed, then they need to be replaced.

What about items that don’t fall under the heading above… like a roof, a cracked foundation, aging single pane windows, etc… These are all negotiable. And if a compromise can’t be found, you run the risk of the deal falling apart. What if you are told that your roof is at the end of its life cycle, but there have never been any leaks into your home. Are you obligated to replace that roof? No. Similarly, old windows might be drafty and not terribly energy efficient, but if they open and close, they function. Your buyer may want new windows or a roof, but you, as the seller, are not required to buy it for them. Knowing how to respond to these demands takes a lot of practice and skill. I’ve had a lot of practice.

A lot of inspectors like to focus in on “code”. While this is extremely important when buying a new home, it is less so when purchasing a “used” home. The house has to live up to code requirements that were in place at the time it was built or added onto. It’s important to understand the distinction, particularly when responding to an over-zealous inspector.

Keep in mind, once you’ve received the home inspection report, anything noted in the report has to be shared with future buyers in the disclosure paperwork. So, even though you might have the immedieate satisfaction of walking away from some pretty obnoxious demands, you will be left with the repercussions. Disclosure forms will have to be updated to reflect the new information, whether you agree with it or not. Not a fun place to be. I often recommend to my sellers that they respond and deal with it the first time around.

A bad inspection report doesn’t have to be the end of the world. Sometimes you have to take a deep breath. But I’ve found that most all issues can be worked out. If the report is bad enough that people choose to walk away, then there are often bigger issues at hand (and not always yours).

As a listing agent I’ve managed to smooth the way for a lot of sellers presented with an alarming inspection notice. With 10+ years in the business I have the tools it takes to negotiate a successful sale.

Got any inspection nightmares of your own to share? I’d love to hear about ‘em.

posted by Marcie Sandalow

This entry was posted on Wednesday, April 7th, 2010 at 10:05 am and is filed under Information for Sellers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.