When placing an offer, most Buyers make their offer contingent upon a satisfactory inspection. But what happens when the inspection is NOT satisfactory? There are several options and Buyers should understand the implications of each before choosing one.
First, let’s review the purpose of the home inspection. The home inspection is intended to make the Buyer aware of issues that they — as average consumers — had no way of knowing about or understanding without the inspection. This includes issues that were not clearly visible to the average Buyer and/or whose significance was not readily understood by someone without specialized knowledge. Issues that ARE visible and/or are clearly understood should be taken into consideration by the Buyer when he or she is making the initial offer. These issues will be tougher to renegotiate after the inspection, and rightly so.
If issues have surfaced during the inspection that you did not know about, are serious in nature, will need to be remedied ASAP, and will cost more than one percent of the purchase price, they are good candidates for renegotiating (or withdrawing) your original offer. As the Buyer, here are your typical options after the inspection:
- Tell the Seller you are satisfied with the results of the inspection and that you plan to move forward according to the original terms.
- Tell the Seller you are unsatisfied with the results of the inspection and would like to renegotiate your offer.
- Tell the Seller you are unsatisfied with the results of the inspection and that you do not wish to proceed with the purchase of the home.
Options 1 and 3 are pretty straightforward. But Option 2 could take on many different forms. You could ask the Seller to address the issues that concern you prior to the sale. You could ask for a reduced sale price so that you can address the issues yourself after the sale. You could stick with the original sale price but ask for a credit at closing so that you can address the issues yourself after the sale. The best option depends upon your particular needs and circumstances, and your Buyer’s Agent can help you decide which course to pursue.
The Seller does not HAVE to agree to any of these options. He or she can tell you there will be no further concessions and take his/her chances that another Buyer will come along. If the home had just hit the market, the chances of the Seller choosing this option are greater than if it had been on the market for 3 months. If the Seller refuses any concessions, you will need to decide whether or not you wish to move forward. Usually, and if the issues are both legitimate and serious, some middle-ground is reached between the Buyer and Seller.
In summary, before you make an offer on a home, be sure you have taken a long, hard look at everything that is visible. Are the windows cloudy? If so, the seals are likely broken. Is there rotted wood on the outside of the home? Factor in some money to have this repaired. Are there fans in the bathrooms? If not, they’re not being properly ventilated. The older the home, the longer you should spend inspecting everything that is visible. This will save both you and the Seller unnecessary sparring after the inspection.
Good luck, and be sure you are working with a good Buyer’s Agent to assist you throughout the process. Please contact me for assistance. It would be my privilege to work with you.