12 Weeks to Buying or Selling a Home: Week 5
A Real Estate Series
Thanks for checking back in with me for Week 5 of my Home Series! Today we are going to discuss the scary stuff - things that can go wrong during inspections! But don’t worry, as long as you have a good agent walking alongside you in this journey, you can get through this part of the deal! For ease of reading, this week I am going to combine the buyer and seller point-of-views. Let’s go!
One of the very first things that happens after an offer is accepted is an inspection on the home you plan to purchase. It is so very, VERY important that you do not skip this step even if you are neck and neck with other buyers for the same home. You can increase your price, bring a little cash to the table, negotiate possession, etc. but I would never suggest foregoing an inspection unless the home is brand new. Many buyers got themselves into very sticky situations over the last couple of years by doing this, and you have no idea what an inspection can uncover that would have caused you to walk away. By putting in the purchase agreement that you WILL be doing an inspection you cover yourself for anything “bad” that may pop up.
Let’s go through the steps of this process and common items we see on reports with some solutions!
Inspection is scheduled. The buyer will schedule the inspection with an inspector of their choice - don’t worry! Most people do not know an inspector and we have one that we work with and trust and so should other agents! The inspector can usually schedule within the next couple of days. Once this happens, the inspector will reach out to the seller to confirm the appointment, and then will arrive at his or her scheduled time. You can either choose to be present or not go - this is totally up to you! A detailed report will be sent to you so there is really no reason for you to go if you are unable or just do not want to go.
Report rolls in. Remember - this inspection is a cost to the buyer! Buyers will need to be prepared to pay around $300-600 for this part of the process (this is money you will not get back but it is well worth it) and you will not receive your report until you have paid. The report is going to be multiple pages long- do not freak out about this! The inspector lists EVERYTHING he inspected and will include whether it is acceptable or has some kind of defect. Usually most of the items listed are “acceptable”, but this causes the report to be long. If you were using us as your agent, at this point we would give you a call and walk through everything on the inspection list that was “wrong” and decide which items are necessary to fix and which are not a big deal! We then create an inspection response together and send it to the seller’s agent to begin negotiating the items we want fixed. Sellers- once the response is handed over to your agent, it is now their job to discuss the advantages and disadvantages of fixing the items that were asked for, and presenting you with your options as well!
What are my options? For buyers, your options are to 1) walk away from the deal and get your earnest money back, 2) ask the seller to fix the items you want fixed, 3) ask for a certain number off the price to cover the defects, or 4) take the home as it is! For sellers, you have very similar options as buyers do! You can kill the deal as soon as you receive an inspection response and just say, “Nope...not doing any of that.” I am not suggesting that is a good idea though because you have to consider that you have already lost time on the market, you will have to wait for a new buyer, and any new inspection will likely uncover the same problems putting you in the SAME position. It is a great idea to really strongly consider what the buyer is asking for, and consider fixing those things or giving them money off the price. Some inspection line items can unfortunately be deal breakers - let’s discuss those next:
Mold. This is a very spooky word in the real estate world. No buyer, seller, or agent on either side of a deal wants to see or hear the word “mold” associated with a house. But guys - it’s not really that scary! And a lot of times, it really isn’t that expensive to remediate. It’s important to remain calm and try not to freak out! We have had MANY deals come together when mold has been involved just by simply having the problem taken care of right away.
Foundation issues. UGHHH! This is the worst in my opinion because it is typically the most costly to fix. If a home has issues with its foundation, there are often many other issues that come with it. Buyers when you are looking at homes, make sure you pay attention to the floor and whether it is solid or wavy. Does it have a lot of soft spots? Do the doors and windows open and close easily? Are there any noticeable cracks in the foundation or in the basement if there is one? These are all things you can look out for BEFORE writing an offer on a home. This can save you a lot of future headaches if you are aware of these things before. On the other hand, sellers if you KNOW you have foundation problems it would be in your best interest to have this checked out before you put your home on the market. Get a quote and have the work done OR have your home priced accordingly to reflect the needed work. Always disclose any problems you are aware of with the house when selling it - you do NOT want to end up in court with a buyer over something you knew was wrong with the house! Your agent should be helping you with all of this before listing the home and also during the process.
Bad roof. This is another super common and costly problem with houses. Depending on the size of the house, a roof replacement can be north of $10,000! Buyers - when looking at homes for sale, be sure to find out how old the roof is. If the owner doesn’t have any idea, there is a really good chance it is old. Sellers- get your roof replaced during that hail storm! You can often get insurance to cover it and there is very little cost to you. But again, this has to be taken care of BEFORE listing the home.
Bad windows or HVAC. These are two more big ones that are seen especially in older homes. Windows are not a cheap fix, and if the whole house needs them you are looking at spending a ton of money on something that isn’t the fun stuff - you know adding granite countertops to the kitchen or your fancy shiplap to your master bedroom wall. Replacing the furnace and/or air conditioning is also very costly and isn’t very exciting! Have your agent check to see how old these things are before you write that offer! For my sellers, do you have to replace these things before listing? No of course not, however you are going to get more potential buyers and more money for your investment if these things are newer. It is definitely something to consider!
Ok, I am done being the bearer of bad news…for today at least. I will definitely have more bad news for you next week - sorry about that! The key for both buyers and sellers during inspections is to remain calm and let your agent help you figure out a solution. Trust me - there is a way to find a common ground that benefits both parties, you just have to be willing to budge a little to get there! And as I have mentioned many, many times before, be sure you choose an agent who has your best interest at heart and has great communication skills. These two things are going to be vital for both you as a buyer and you as a seller to get through this process!
Thanks for sticking around long enough to get to the end! Join me next time for Week 6 of my series where we will tackle the appraisal process and how it can also kill a deal. Sounds exciting right?! Can’t wait to meet you back here next week!
About the Content Creator:
Courtney Burke is a real estate agent and co-owner of Welcome Home Realty Group, LLC located in Franklin, Indiana. She spent 9 years as a Biology teacher at Franklin Community High School but left teaching in 2021 to pursue a career in real estate alongside her husband, Chris Burke, who has been in the business since 2014. She uses her background in teaching to educate her clients on the steps to home buying, selling, and investing and help them reach their goals.
For more information, contact Courtney at 317-416-3073. You can also visit her website at www.whindiana.com.
