A Guide to Tackling Significant Defects After a Home Inspection
Part II. Addressing Significant Defects
When purchasing a home, one of the most critical steps is completing a home inspection. The inspection report can reveal significant defects or issues that require attention before finalizing the purchase. It can be overwhelming to receive a report with a laundry list of necessary repairs, but addressing these issues is essential to protecting your investment. In this three-part article, we’ll cover what to do when you receive a home inspection report with significant defects noted. Part 1 will discuss how to prioritize the issues and decide which repairs need immediate attention. Part 2 will focus on collecting multiple quotes from vendors and researching their reputation and experience. Finally, in Part 3, we’ll cover overseeing the repairs, including ensuring that all work is fully permitted and up to the current Building Code, and having your home inspector reinspect the property to ensure that the repairs were done correctly. By following these steps, you can protect your investment, ensure that your property is safe, and have peace of mind knowing that your home is in good condition.
If you’re in the process of buying a home, you will most likely have a home inspection as part of the process. A home inspection is a thorough examination of the property’s condition, including its structure, mechanical systems, and overall safety. The goal of a home inspection is to identify any significant defects or issues that could affect the value or safety of the property.
After the inspection is complete, you will receive a home inspection report, which outlines the inspector’s findings. This report is a critical document that will help you make an informed decision about whether to move forward with the purchase, negotiate repairs, or walk away from the deal.
After receiving a home inspection report that cites significant defects or issues, it’s essential to take steps to address these problems. Here are some of the most important things to consider:
- Review the Inspection Report: Before taking any action, review the inspection report carefully. Make sure you understand the scope and severity of the issues that have been identified. You may want to discuss the content with your Home Inspector or Real Estate professional. Try and sort out the most critical components to be mitigated, as handling of these items will be part of the negotiation process. Just as you can walk away from the defects, the seller may opt to walk away rather than accommodate your terms.
- Prioritize Issues: Prioritize the issues that need to be addressed based on their severity, safety implications, and cost. It may be helpful to consult with your real estate agent, attorney, or professional contractor to help you prioritize and estimate costs. Items that are required out of safety concerns may be mandatory, as most banks will not close on a house that knowingly has true safety defects. Not all safety defects are equal, so it is possible to have a safety defect that the mortgage company will not react toward if not mitigated.
- Negotiate Repairs: If you are working with a seller, you may be able to negotiate repairs or a reduction in the purchase price to address the issues identified in the inspection report. In some cases, the seller may be willing to fix the problems before closing or provide you with a credit at closing to address them. In others, however, they may opt to not fix or repair the item altogether. This is where a savvy Real Estate agent is invaluable.
- Get Professional Opinions: For more complex or costly issues, it may be helpful to get a second opinion from a professional contractor or specialist. This can help you understand the scope of the problem, estimate the cost of repairs, and develop a plan to address the issue.
- Obtain Estimates: Once you have identified the issues that need to be addressed, obtain estimates from qualified contractors or specialists. This can help you understand the cost of repairs and plan for any necessary repairs or improvements. Try and solicit a minimum of 3 bids for each major item, and ask for clarity in their proposals to ensure that all contractors are proposing the same things.
- Renegotiate the Purchase Price: If the cost of repairs or improvements is significant, you may be able to renegotiate the purchase price to reflect the cost of repairs or the reduced value of the property. Try to not let emotions enter into this phase of the transaction, and let your agent work their magic. You hired them to support your interest, and THIS is crunch time for them to shine.
- Consider Walking Away: If the issues identified in the inspection report are too significant or costly to address, it may be in your best interest to walk away from the deal. This can be a difficult decision, but it’s important to protect your investment and ensure that you’re not taking on more than you can handle. You must do what is best for you and your family, so make a well-informed and level-headed decision.
In conclusion, receiving a home inspection report with significant defects or issues can be stressful, but it’s important to take action to address these problems. By reviewing the report, prioritizing issues, negotiating repairs, obtaining professional opinions and estimates, renegotiating the purchase price, and walking away if necessary, you can protect your investment and make an informed decision about the property. In part 3 of this series, we will discuss steps you can take to prevent significant defects and issues from arising in the first place
