Buyers and Inspections: How Much is Too Much to Ask?
At time of writing the offer on a property, I discuss the inspection options with each buyer. Depending on the age of the home, the condition of the home, and the seller property disclosure information, the buyer determines which inspections that they would like to request. These inspections are customarily ordered and paid for by the buyer and completed within 10 business days or less of the accepted offer.
In the Cedar Rapids/Marion, Iowa area, the purchase contract addresses the intent of inspections as the following:
"These inspections are not to be construed as inspections to bring an older home into compliance with the current local building codes. These inspections are only mean to discover any major structural, mechanical, safety and health related issues or defects."
In other words, you can ask a seller to repair a leaking roof or a water heater that does not heat water, but you cannot ask for them to replace the furnace just because it is 15 years old or to clean the gutters. If you have concern about broken window seals, overflowing gutters, tree limbs over the house, or a leaking faucet, these items can be requested in the initial offer for the property. The seller can respond to the request at that point, prior to acceptance. These types of "repairs" cannot be asked of the seller as part of the inspection contingency as they do not fall into one of the categories above of "major structural, mechanical, safety and health related issues or defects."
If there is an item of concern, such as a safety issue with a double tapped breaker, the buyer can request this repair to be completed prior to closing by a licensed electrician. It is important to know that the repair was done correctly by a licensed contractor with a receipt to be provided. Once a repair is requested, the seller and buyer have 3 days to negotiate the terms of the inspection remedy.
The sellers may choose to do any of the following:
1. The seller may accept and agree to complete the repairs prior to closing as requested by the buyer.
2. The seller may obtain an estimate and offer a credit for the buyers to complete the repairs after the closing.
3. The seller may offer to repair some of the items but not all of those requested.
4. The seller may say no to any repair requests and choose to cancel the contract.
Why might a seller deny completing any of the requested repairs? Perhaps there is a backup offer on the property with another buyer that has similar terms or a higher price with no inspection contingencies. Or maybe the seller cannot afford to complete the repairs as they are already required to bring money to the closing in order to sell at the agreed upon price with the buyer.
As your agent, I will be able to provide guidance in deciding which repairs the seller is likely to complete for any buyer. Some repairs may be required by the appraiser in order for the buyer to obtain financing. I will provide a list of contractors to make these required repairs if needed.
The home inspection contingency is the largest hurdle in the purchase contract. Depending on the age of the home, there may be no issues or there may be many issues that cannot be corrected. Things like termite damage, bad wiring, foundation cracks, etc. may be too much for a buyer to handle. The home buyer can decide to terminate the contract and request for their earnest money deposit to be returned. The only cost the buyer loses is the cost of the inspections, which is a small price to pay in comparison to owning a home deemed as a money pit!
Each home is unique. Each buyer is unique. Some buyers have family, friends, or they themselves that are able to make some of the repairs themselves. Other buyers have no family close by and do not have the funds to make repairs. Each situation is unique and the buyer makes the decision about how much to request of the seller.
How much is too much? It depends on the financial position for the seller, their motivation to sell, how long the house has been on the market, etc. Trust that as a buyer's agent, I will provide all of the choices to you and you will make a decision that is best for you and that particular home.
If you are considering purchasing a home in 2016, I would love the opportunity to work with you to accomplish your goals! Call me today to set up a free home buyer consultation, 319-521-0701.