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and electrical) and more. He/she will come up with a report which often highlights areas that have concern, and may need to be corrected. This list may be quite extensive, even for a new construction home. The list could include anything as minor as a small rip in the kitchen floor vinyl, to as extensive as a failing foundation.
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210 Comments on Buyers!!! A Home Inspection is Not to Re Negotiate the Deal!!!
If there is a lot of work on the house, I suggest that my buyers do the home inspection first before they decide on the offering price. It means them commiting funds before they purchase but it also gives the seller the comfort that the offer was made with due diligence. Of course, it may be a different situation where the property / location / listing price will trigger a multiple offer situation.
Bottome line? Deal's nullified and it becomes a COUNTER OFFER.
Post very well taken. I've yet to inspect a perfect property, not even new construction.
While I make it very clear that my inspection is not a "pass/fail" inspec tion, and what my Clients do with the findings is strictly their decision. the key points=, as I see it from an Inspector's point of view, is the degree to which issues found during an inspection are unepexted and significant.
I have a duty of fairness to the Seller, which I clearly state on my web site.I do my best to provide as balanced reporting of the findings. In fact, exaggerated reporting of issues could even backfire on them if they do end up buying the house.
As I see it, an inspection is intended to, as Pam stated, let my Client know better about the condition of the house on which they've submitted an offer, and -- to the point of possible renegotiation -- to spot any nasty suyrprises before they're stuck with them.
Hello All,
Great topic. As a home inspector that has performed more than 7,000 inspections over the last nearly 20 years, allow me to present things from my view. Is the purpose of a home inspection to renogiate the deal? Here is the painful part....YES! Its called Due Dilligence. A buyer makes an offer based on his perceptions of value. If there are items revealed that affect that value, why would anyone expect the buyer to not reopen negotiations?
However, the Commonwealth of PA has a very siimple solution to all the problems with fussy buyers. Statute states the purpose of an inspection is to identify Material Defects. A “Material Defect” defect is defined by state regulation as a problem with a residential real property or any portion of it that would have a significant adverse impact on the value of the property or that involves an unreasonable risk to people on the property. That fact that a structural element, system or subsystem is near, at or beyond the end of the normal life of such a structural element, system or subsystem is not by itself a material defect. So I have a question for the real estate professionals. It is unreasonable to expect a buyer to want to negotiate Material Defects that were not previously disclosed by the seller?
I know, I know everybody goes through alot of trouble getting the deal on paper and then that Snidely Whiplash of a home inspection steps in and messing the whole thing up. Here is a very simple solution that can diffuse everything and actually make the whole process better for everyone...Have your sellers do an inspection prior to listing.
Having an inspection performed by your seller does several things:
1. It allows the seller the chance to address items prior to listing.
2. It reveals items defects the seller may have no knowledge.
3. A seller can price in what to expect from a potential buyer in the way of negotiations.
4. It demonstrates an effort on the part of the seller to be open and honest to the marketplace.
Several of the top producing agents in my marketplace have made this a standard practive and with great success I might add.
I hope you all will take my comments in the spirit of which they were offered. I take pride in the fact that nearly all of my realtor referral base consists of top producing agents that want the best for everyone concerned.
-Fritz Butler
President
Castle Inspection, Inc.
Springfield, PA 19064
Very true Pam unless the repair allowance was previously negotiated in the contract (our contracts have this). Then it's not a re-negotiation but a fulfillment of the contract.
I strongly disagree. In our market in NM, it is common practice to re-negotiate at this phase. We use a specialty form called Objections, Waivers and Resolutions. This doesn't change the original offer, but if there are a lot of repairs needed and the seller doesn't want to fix them, we will often times ask for a reduction in price of the home or a large credit at closing. Our contact here does give the language to re-neogtaite at time of inspection report and I'm glad. Yes, seller can walk too, but 99% won't. They are saavy enough to know that if they don't fix it for this buyer, they will have to for the next AND now they have the legal responsibility to disclose the new defects.
John Arendsen,
You are right on point with my blog. The blog was not weather the buyer had the right to try to re negotiate. It was that if the buyer chose to, they needed to understand that they voided the original agreement and have countered it. Once you have a counter, it means you reject the original offer, and propose a new. Neither party is obligated to go back to the original offer.
In this market, many sellers will conceed and do repairs, or reduce prices, but you cn not bank on that with 100% certainty. You have to be willing to take the riskof loosing the property.
I think that now, (200 comments into the conversation) we're talking semantics.
The inspection is not supposed to be a tool for renegotiating the contract. It's a tool to find deficiencies that otherwise weren't apparent to the buyers, and adjust accordingly.
Comment #165 brought up a crack in the driveway. That crack in the driveway was readily apparent when you wrote the offer... so we should not be renegotiating that aspect, unless the inspector is telling you that due to that crack, the driveway can no longer perform the function for which it was designed.
In our area, the inspection is designed to find defects in major components, not "minor repairs and routine maintenance items" ... and our contract states: "The fact that a functioning major component may be at the end of its useful life, shall not render such component defective for purposes of this paragraph", and it goes on to say "a major component shall be deemed to be in operating condition if it performs the function for which it is intended, regardless of age, and does not constitute a threat to health or safety."
I do not agree. If a buyer submits it as a counter offer then yes the seller can walk. If the buyer is asking and they are still within their inspection period they can ask all they want. In our State once the seller knows of a defect he has to disclose it to all future buyers so he had better think twice before he jumps ship. It is his house and you would think he would know if there are major problems . . . why did he not tell the buyer in the first place. If he is going to be so upset when problems are found why don't you have your sellers get an inspection themselves before they put it on the market?
I bet very few would want to do that. They would rather have the buyer put up their own money to find out the seller never took very good care of his house. We do a lot of 'As-Is" contracts and you better believe anyone would want to adjust the price if they found major problems that were not disclosed up front. The price offered was for a home in working order unless the seller disclosed otherwise.
Now if you are talking about minor things that were easily observable when the buyer looked at the house then that is another thing.
This discussion points up that this is an open question across the nation - highly dependent on local contract language.
Based on the sum of all of these varying procedures: a signed contract can never be viewed as a done deal (even sans the financing contingency) until the inspection period is over and repairs have been negotiated.
Any listing agent who does not so advise his or her seller is asking for troubles.
Moral: Never count your chickens (commissions) until the inspection has roosted.
A seller may well blow off the deal over repairs - being unwilling to pay.
But it is far more likely that the buyer will quit the deal - being unable to pay.
In Florida, our contract has a section pertaining to repairs and it is negatioated as part of the contract, if any and how much to repair. It keeps it simple.
In our contracts, it gives the buyers 10 days to inspect the property with an out if they do not want to proceed. However, if there is a hidden defect in the property discovered by an inspection, all bets are off as far as I am concerned unless it is something they can live with. Why wouldn't compensation for these defects be a legitimate reason to reconsider the price or repairs?
Very good post. I should make this a billboard and hand it to every buyer who gets an acceptance on their offer. It is amazing how they want to renegotiate the deal every step of the way.
Very interesting discussion! As an inspector I often have clients ask me what items they should ask the seller to repair. My response: "My goal is to educate you on the condition of the home, but your Realtor can give you professional guidance on how to handle the request for repairs and any negotiations". I like to leave THAT to the Pros !
Great post...this happens more and more often in my market.
This was interesting to read. thanks for sharing. Looks like they needed a <a href="http://wavelengthdevelopments.com">handyman nwa</a> to fix up that roof. What caused that anyways?
I love our new florida contracts for the way they wrote in them that buyers cannot just walk away unless the seller is not willing to do the repairs.