More times than not, there are issues with what sellers “feel” are legitimate requests resulting from the buyers’ home inspection. When a seller is reviewing the Offer To Purchase with their agent, they should discuss the North Carolina Real Estate Commission brochure, “Questions and Answers on: Home Inspections” so that they understand in advance the many steps in closing on the sale of their property.
A home inspection is performed by a licensed, North Carolina Home Inspector hired by the homebuyers. The home inspector looks at the visible and accessible structural and mechanical systems of the home and produces a report on their condition. An important part of the home inspectors job is to alert homebuyers to issues with the property’s condition that might need to be addressed before the sale is finalized. Home inspection reports do take into consideration normal wear and tear, and the age of the home and its systems.
What a home inspection does not provide:
- A home inspection is not a property value appraisal
- A home inspection does not include a cost of repairs to remediate issues
- It does not guarantee that building codes have been complied with
- It does not provide protection from any item in the home failing in the future
- No home inspection is “technically exhaustive”
- Home inspectors are not required to report on wood-destroying insects, environmental contamination, pools and spas, detached structures, or cosmetic issues
When a buyer signs the standard Offer to Purchase on Contract form, they are given the right to have inspections of the home to determine its condition, and those inspections must be completed before the end of the due diligence period. If the home inspector does not provide the specific inspection service – for example a termite inspection – the buyer should contract with that specific professional. Items that should be expected from a home inspection are both structural and mechanical.
The items investigated in a structural inspection will ensure that a home was properly designed and will withstand the weight of anticipated loads, and that the structure has been maintained so that it will be safe for the foreseeable future. These items include:
- Basement or crawl space (concentrating on drainage issues)
- Pest damage (termites, carpenter ants, carpenter bees)
- Interior and exterior walls (including condition of concrete and stucco)
- Siding and trim
- Brickwork and masonry (including chimneys)
Mechanical items included in a home inspection report include everything from the HVAC, water heater, garage door opener, remote control gates, and appliances like the dishwasher, washer, dryer, and microwave.
The home inspection report is the property of the buyer, and is given only to the home buyer. The seller must have permission of the buyer to see the report.
“It’s important for sellers to understand that a home inspection report has been generated by a licensed professional, and that the items itemized for repair are not simply the whims of the buyers,” says Becky Brown, Broker/Realtor. “The resolution of those items is open for discussion, though. Sometimes a buyer wants the seller to make repairs. Sometimes the buyer would prefer to hire their own people to make repairs, and have the seller renegotiate the sale price of the home to compensate for the costs of the repairs.”
If a buyer feels that items in the inspection report are beyond the scope of what they want to deal with, they do have the right to terminate the offer to purchase, Becky emphasizes. On the other hand, sellers can refuse to address issues in an inspection report, and risk losing the offer.
“If a seller decides not to make the home inspector’s requested repairs or offer a cash allowance for those repairs, they can do that,” says Becky. “But, I always caution sellers that the same issues will come up in the next inspection report, and the scenario will likely replay itself.”
Once a seller knows that their home has been informed of issues on a home inspection report, they are also required in most states to disclose – in writing and upfront – known issues with the property.
“It’s always best to be realistic and fact-based when you place your property up for sale.” she adds. “If structural items, systems like the HVAC, or appliances need repair, a seller should price their home accordingly or make the changes needed so that they pass inspection. If a seller is not confident that their home will pass a home inspection, their realtor could suggest listing and selling it ‘as is,’ which usually requires a cash buyer. A bad inspection report is hard to shake.”
Of course, Becky notes, a seller can hire a home inspector and use the report to remediate structural and mechanical issues before listing their home for sale. Then, a re-inspection report can be offered to prospective buyers as justification for the list price.
While the buyer is responsible for paying the home inspection they request after making an offer, the seller is responsible for addressing areas of concern in the report, and for resolving those to the buyers’ satisfaction prior to the end of the due diligence period. After the seller repairs an item noted in the home inspection report, the buyer may have the home inspector perform a “re-inspection” to verify that the repairs have been made.
A sellers’ agent will help negotiate requested repairs and cash allowances (via a reduction in the sale price, or cash at closing) with the buyer and their agent.
Download a copy of the Home Inspections Q and A.