K.M. Minemier & Associates is a certified Woman Owned Small Business (WOSB) engaged in full service real estate asset management and marketing.

HUD Articles

What if there are private inspection problems?

September 26, 2022

What happens if the inspection reveals problems with the home?

There’s no such thing as a perfect house, so it’s inevitable the report will uncover things that need to be addressed. Even brand-new homes have a few items requiring repairs, often referred to as a “punch list,” that’s identified in the final walkthrough. If you want to forego a full inspection when purchasing a new home, an agent experienced in new home construction may help identify what to look for.

With all this in mind, if the inspection report comes back with serious issues, you’ll have to decide how to proceed with the sale (or not).

Keep in mind that there’s no pass or fail with an inspection. The report will provide you with a list of components that do not meet minimum standards or are not functioning properly, along with recommendations to repair or replace items.

So if you get a problematic inspection report, what comes next? You have a few options, though specifics may vary depending on what’s specified in the contract.

Ask the seller to pay for repairs

Determine what you’re comfortable fixing and which items you’d like the seller to repair. Your agent can be a helpful resource here, as they’ll probably have a good idea of what sellers will be willing to take on, given local market conditions.

Also bear in mind that the seller is leaving the house behind, while you’re moving in. They likely won’t be as invested as you are in the quality of the repairs.

Pay for the repairs yourself

Perhaps you’re in a competitive market and don’t think the seller will agree to foot the repair bill. Or maybe you’re getting a great deal and have some extra funds saved. Your inspection report will outline the severity of the issues found so you can prioritize repairs that impact health, safety, and comfort.

“Whether or not repairs are done before closing or after closing, they (buyers) at least have a starting place on where to start improving their new home,” says Damm.

Share costs with the seller

If your agent thinks the seller may be willing to meet you halfway, consider negotiating costs for major repairs. Splitting costs could be negotiated as a percentage, an agreement to pay for specific items, or a credit at closing from the seller.

Walk away

If the inspection report reveals serious defects and you’re no longer comfortable moving forward with the sale, you can cancel the contract if you’re still within the inspection period outlined in the contract. The inspection period is a specific amount of time designated in the home sale contract to allow for buyers to perform their due diligence on the property.

For example, Haggstrom’s client who discovered the sewer leak decided the home wasn’t a good fit after the seller refused to pay for the repairs. “They were able to withdraw their contract without any kind of penalty because of that home inspection period.”

Know your limits

Identifying your priorities and what you’re willing to accept in a home inspection is a personal matter. Your best bet is to find an agent you trust so they can help you discover what’s most important to you so you’re equipped for the transaction’s inevitable ups and downs.


Back To Article List