After a Home Inspection Reveals Defects

Negotiate how repairs are handled and who pays for them

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Real estate professionals urge home buyers to obtain home inspections before closing on a purchase because they offer disclosures agents cannot provide. Inspections are handled by independent professionals who evaluate the condition of a home and report on necessary repairs and issues that may need to be addressed in the near future. For example, an inspector might make note of a plumbing problem that needs immediate attention in addition to estimating how long it will be before a furnace needs to be replaced.

Fees for home inspections typically are paid by prospective buyers.

Not the Same as Disclosure

State laws vary, but most sellers are required to disclose material facts, including anything they know to be wrong with the home. If a seller possesses knowledge, for example, that tree roots often creep into the sewer line and need to be removed from time to time, that fact needs to be disclosed. It could mean the sewer line should be replaced, and the buyer might want to obtain a sewer inspection.

Because home inspections are handled by a third party trained to assess homes, they are more thorough and detailed than anything sellers might disclose. It's typical that home inspections will include information that was not disclosed—often because the sellers did not know about it.

While home inspections serve as a check against sellers failing to disclose relevant information, sellers still can be sued by buyers who find out about a problem after the sale has closed. These lawsuits often include more than just the sellers and list their real estate agents and brokerages as defendants.

Handling Repairs

Repairs are not required, but buyers also typically make offers contingent on the outcome of a home inspection, giving them the freedom to walk away if they discover defects they don't like or if the buyer refuses to make repairs. Additionally, disclosure laws mean sellers need to make the home inspectors' findings available to any future potential buyers. Often, the best thing for sellers to do is to make the necessary repairs to keep the sale from falling through.

However, in a sellers' market, sellers might be willing to take the chance that they can find a buyer willing to purchase the home as-is and make the repairs themselves. Even homes that are sold as-is are subject to home inspections. In those cases, the inspection information is used by buyers to proceed with the repairs themselves.

Sellers Seeking Home Inspections

Some sellers try to be proactive by ordering home inspections before putting a house on the market. Such preemptive disclosures might be useful, but they also can backfire. Buyers still are likely to order a separate inspection, and no two home inspections are alike. A buyer's inspector still might find something a seller's did not.

It also could turn out to be a waste of money if a seller makes repairs that a buyer would not have requested. Different buyers might have different demands, and how necessary repairs are handled always can be negotiated. For example, if a furnace needs to be replaced, buyers might ask the sellers to do it, or they might simply seek an equivalent reduction in price so they can handle it themselves.