As a seller, the home inspection can be one of the biggest hurdles. It can also be no big deal. And, while some of this rests in the hands of whatever agent happens to bring the buyer, the expectations they previously set (or failed to set) for their clients, and the buyer’s overall comfort with taking on repairs and maintenance, it can be agonizing waiting to find out how a buyer will respond to their inspection result.
Here’s what a seller can expect during a real estate transaction.
Once your property hits the market and goes under contract (buyer’s write an offer and sellers accept), the inspection period begins. This is typically 5-10 days immediately after the acceptance of the purchase agreement. During this time, the buyers can have as many inspections as they need, but typically they have a home inspection company, a radon inspection and sewer scope (if applicable) done.
In Minnesota, home inspection is not a licensed or regulated trade, so sometimes major challenges come up when buyers use an inspector who is not a professional, or when the inspector believes something about the property that cannot be backed up with building code. There are many great home inspectors and inspection companies out there, but it happens pretty often that the buyer may select a friend or family member who ‘used to be a contractor’. Because of this, as a seller, you may want to cross check requested items with local building officials or legitimate contractors before agreeing to concessions. I’m getting ahead of myself though.
Once the inspections are completed and the reports have been reviewed by the buyers, sellers can expect to hear from them. It can be as simple as, “everything looks great! We are excited to move forward!” and as unfortunate as “this is just too much for us, please see our attached cancellation.” Typically, it falls somewhere in between and buyers will request the seller to concede financially or perform some repairs. There is no limit or requirement on what can be agreed upon. This could be a matter of a few hundred dollars for some GFCI outlets to be installed, or pushing $20k for sewer line repair.
Here are a few things to consider as a seller when home inspection negotiations come up:
- Anything the buyer discovers, even if you had no previous knowledge, becomes a material fact and will need to be disclosed to future buyers should this buyer cancel. For example, you’ve not been in your basement for a while and your buyers discover some water intrusion. Even though this is not your fault and you were not aware of it, should the buyer cancel, we will need to tell future buyers that during the inspection water intrusion was discovered in the basement. Not knowing about something does not protect you from having to deal with it.
- Referring to licensed experts who are willing to make a statement and estimate of the issue at hand is wise. In the basement example, some contractors are willing to bid the work, but are not willing to ‘sign off’ on their recommendations. (As in, they are happy to do a repair and take your money, but are not willing to stand by that work should the problem arise again after the repair has been done.)
- Keep the end in mind. It can feel like you’re being ‘nickel and dimed’ about a bunch of dumb little items and a few big ones during this time. Sometimes it’s helpful to zoom out and look at the big picture. At the end of the day, do my proceeds still come out where I need them to be? If I’m below where I want or need to be in terms of proceeds, do I have the time and energy to deal with this issue myself rather than pay the buyers to do so? If I firmly refuse to work with the buyers on post inspection repairs or concessions, do I have the time (and money) to go back on the market and wait for the next buyer, and will that buyer likely have the same/similar issues to this one? These questions are different for each situation, but don’t fret, your Amazing Agent will help you work through different scenarios and the pros and cons of each. We will get through this!
Here’s what you can do to avoid or reduce surprises during home inspection times:
- Preventive maintenance. This means routine cleaning and tune ups of all major mechanicals (boilers, furnaces, AC, accessory units, etc), cleaning your everyday appliances like dryer vents, washing machine seals, the back of the fridge etc. Keeping your expensive items clean and in good condition goes a long way. Make sure you are using bath fans and your house’s ventilation systems to help keep moisture issues under control. Think about adding insulation (definitely not fun or sexy, but this is a MAJOR improvement to the health and comfort of your house!), keep landscaping away from your siding and maintain water flow away from the house, have sewer lines cleaned annually to prevent major repairs requiring a dig up solution, and so on. This can seem like a lot, but frankly, it is part of the deal when you own a house.
- Some sellers feel comforted by having a pre-inspection done prior to selling. For a few hundred dollars, you can hire an inspector to come through just as a buyer would. You can then use that list to make any repairs that might become an issue to your buyers in the future OR offer the report to buyers so they are aware of what may come up on their inspection.
- If you bought your house recently, you probably have a copy of your last inspection report. Dig this out, and run through it, line by line. You can use this as your punch list to tackle repairs that may not have been done since you bought, or at the very least, become aware of items your buyers are likely to have concerns about.
- As a seller, you can determine up front that you will not be able to accommodate any repairs or concessions from the buyer. This happens quite often when sellers have disabilities, when someone is selling an estate on behalf of a deceased family member, or when the sellers are in any kind of distress (financial or otherwise). Keep in mind that in this case, you may be able to avoid doing any kind of repairs or managing a contractor to do them, but pricing will need to be adjusted accordingly and you may need to make further financial concessions to get through to closing.
- Make sure you keep receipts and paid invoices of any work that is done within the last 6 months to a year of your sale. This can be helpful for the title company to ensure no one can lien your property, but also in the event that you need them to correct a repair or make another one after the inspection, you’ll know who to call!
- Double check to make sure your insurances are up to date! When you decide to sell your house, it seems like your house decides it’s time for things to break, or the big bad wolf will come around and blow a few shingles off. While not all household items are covered by insurance, in the event of a major storm or other catastrophe, you’ll be thankful to be able to call up the insurance company to help out.
Hold onto those repair
receipts and invoices!
- You might also consider purchasing a third party home warranty from a company like HWA. This doesn’t wipe out the cost of a repair, but will certainly knock it down should something like your water heater or furnace die before closing.
- Lastly, and maybe this should have been the first point: clean and organize your spaces for easy viewing of all important areas of the house. If buyers and inspectors can tell the house has been well maintained and cared for, it will reduce the red flags that may be raised when they need to navigate through rafter spider webs or sweep away mouse droppings just to take a look at your furnace.
Knowing what to expect during a home inspection (even if it’s knowing to expect the unexpected)
Even if you’ve purchased or sold property before, knowing how the home inspection process works and how it can impact the transaction, regardless of whether you’re buying or selling the property, can really make or break the experience. We can’t emphasize enough how important it is having an expert real estate agent in your corner during this process. Someone to explain what’s happening, give you facts to help you make educated decisions, help you set realistic expectations, and of course, celebrate with you when you get the outcome you wanted!
If you’re still not sure where to start when it comes to buying a house, or if your first time around wasn’t so great, grab our FREE guide below!