“Did the home pass inspections?”
This is a question I get all too often. There isn't a black and white answer, so I always try and steer a buyer or seller away from this verbiage. Alternatively I can answer, “You tell me!”
The inspections process for a buyer is not like inspections done by the city or parish where a home has to “pass” the inspection, or be up to certain codes, in order to get utilities turned on or move forward in the renovation process.
Passing inspections when buying a home is really up to the opinion of a buyer, and whether or not the buyer and seller agree on remedies for deficiencies before moving forward to the appraisal process.
Remedies for Deficiencies?
A home “passes” inspections after the buyer and seller have agreed on remedies for deficiencies. So what are deficiencies and what might the remedies be?
Deficiencies are basically anything negative that comes up on the report. Things like:
- Active termites
- Old termite damage or structural issues
- Outdated wiring
- Foundation problems
- Plumbing problems
- ... and more!
If there aren't any deficiencies found or the problems found are minor or expected, the home buyer may choose to move ahead with the sale as-is.
If the deficiencies are significant, the buyer may return to the negotiating table and ask the seller either to remedy the problems found (make repairs), or agree to a change in the sales price to account for the issues.
If the buyer and seller can't agree on either remedies or a price adjustment, the buyer may walk away from the sale.
A buyer can walk away (cancel the sale) for almost any reason during the inspection period. This is their due diligence period to check any and everything with regards to the home including repairs needed, insurance costs, and utilities costs.
For example, I have had buyers walk away on a great home during the inspection period because when they shopped for insurance, the quotes were too high that it made their monthly payment something they were not comfortable with. So they canceled the sale, even though the home inspection showed the home in good condition.
Worried about the inspections process as you prepare to sell or buy a home? Check out the posts below and don't forget you can email me anytime: [email protected].
The inspections process when buying or selling a home doesn't have to be stressful. Download my FREE guide to the steps and decisions involved and then scroll down to read my other blog posts on this topic.
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