Not Thrilled with your Home Inspection Results but Really Love the House?

Real Estate Agent with Keller Williams Realty 04101860

You're in love with the house but the home inspection results are not what you hoped they'd be.  What next?

I suggest:

1. Is the inspection report calling for further inspection on certain items?

To me that means either A.) He doesn't feel qualified to comment and is recommending you seek the opinion of specialist (i.e. a foundation contractor, a grading contractor, a HVAC specialist, etc.), B.) He feels that he can't determine the severity without opening walls or other invasive practices.  If it's "A", call out a specialist in the area of concern for more insight.       

2. Learn more about the neighborhood and the builder.  

Maybe the issues you're seeing on this house are typical for the neighborhood?  If so, and you are set on that neighborhood, you may need to expect and accept.  For example, there are older neighborhoods in Sac that consistently present the same issues, like outdated wiring, insufficient plumbing, and lack of proper drainage.  The buyers who commit to the area need to expect the issues and accept that renovation is in their future!

How do you go about researching the situation?  Try this: Go to the neighborhood in the evening or on a Saturday morning and knock on some doors.  Talk to your prospective neighbors.  This can be an eye opener!  Sometimes this exercise results in lessened concerns, especially if there are unfounded rumors about a particular neighborhood.  Other times it confirms a common problem, reveals a past class action lawsuit, etc.  Neighbors are often "in the know", especially in older neighborhoods.  Besides, they are nosey, so even if a problem lies with a single house, they may remember seeing repair men out to address the same problems over and over again.  Another channel: Is there's an HOA, call them up.  They can provide insight into common issues in a particular community.  Or: A simple "google" search may bring to light positive/negative reviews on a community or builder. 

3. Get a bid from a licensed Contractor. 

Finding out how much it's going to cost you to bring it to a standard that's acceptable to you as the new owner and to current code is key!  Knowing your budget and sticking to it is Real Estate 101!   Make sure you ask for worst case scenario - meaning have him pad his estimate for potential issues.  Remember, until you start tearing into a project it's very difficult to know the full scope!    

(I can suggest a great general contractor if you're in Sac County, Placer County, Yolo County, or El Dorado County: Moore Brothers Construction .) 

 4. What do the Seller's disclosures say?

Compare the results of the home inspection with the information provided by the seller.  It's perfectly acceptable, and advisable I might add, to send a written list of follow up questions to the seller after the inspection.  Often times Sellers need their memory jogged regarding old issues, or ones they've gotten used to living around.  For example, if the inspection report revealed a crack in the foundation, a follow up question asking the seller specifically if water has ever come up through that crack might be in order.  Note, always present these questions in writing and expect the answers in that same format!   

5. Pull permits.

If the home inspection report refers to questionable remodels, renovations, alterations, it would be wise to research whether these repairs/renovations were done with proper permits and inspections.   

Now that you've done your homework:

Ask yourself if you really want the house, if you are willing to proceed, and under what terms. 

Depending on the type of sale (short sale, bank repo, standard, probate, trust, auction, etc.), your choices may be limited.

1.  If it's possible to negotiate for the seller to complete repairs, that's the ideal.  Although it often extends the length of your escrow, you know that if/when the contractor finds additional work requiring a bid revision, the burden will fall on the seller. 

2.  Maybe the seller isn't open to facilitating repairs, but they will agree to a credit through escrow.  This can be a great alternative, but remember to check with your loan officer first!  There are times that banks refuse to allow such credits for fear that if the house needs substantial work and you receive money in lieu of the repair that you may opt not to use it towards that repair after closing and that compromises their collateral.    

3.  If the seller is unwilling to repair or offer a credit, see about renegotiating the price.  If you go this route, make sure that you consider whether or not you'll have the cash to throw at the repair after closing.

Jana Reyes


Keller Williams Realty

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