A Bad Home Inspection Report Doesn't Mean Disaster

A home inspector’s job is to accurately report on the physical condition of the house and note what repairs may be necessary now and in the future. A buyer's inspection takes place after the buyer has made an offer on a home and the property has gone into escrow, but prior to closing on the property. The home inspection usually takes place shortly after the seller accepts the buyer’s offer. After a home inspection, the buyer may desire to renegotiate their offer or request repairs.

Although it is a common misconception that home inspections are “pass” or “fail,” it is actually left to the buyer to determine what their financial limits are with regards to making the recommended repairs. If a buyer is getting a great deal, then they may decide they can financially handle some of the items in the home inspection report.

There are some items which the seller is not obligated to address. Cosmetic issues that can be addressed by the buyers often includes things like scuffed floors, re-painting, or changing outdated fixtures. A defect that affects the intended function or operation of a major house system should be fixed, however. For example, while an older roof is not typically a reason for a buyer to request a reduction in price, a leaking roof is another matter. Leaky roofs not only can result in damage to the home, but can prevent buyers from getting a mortgage. Rather than deal with the trouble and expense, buyers may decide to purchase another property.

There is no reason for a seller to panic if a home inspection report comes back with some items to fix. Consult your realtor and ask for their recommendations. It’s likely they have seen similar issues in the past. They can provide an experienced, non-biased opinion on how to respond and keep your home’s sale moving forward. It’s possible that you will be able to make some repairs yourself. If you are not able to, or choose not to, your realtor can guide you in how much you will need to credit the buyer to allow for compensation.

Is it possible to simply sell the home as-is, despite the inspection report? Yes, but the homeowners are essentially asking buyers to make the necessary repairs and should expect to have to accept a lower selling price as a result. A homeowner should do their due diligence and find out if simply making the needed repairs would be a better financial move. If a seller needs to move quickly or cannot afford to make the needed repairs, taking a reduced price may be an acceptable outcome, however.

Sellers should be aware that if they have a copy of the buyer's home inspection report and the sale of the house doesn't close, then in most cases, they will be required to disclose any issues found in that inspection to future potential buyers. The Texas Property Code requires that most home sellers fill out a Seller’s Disclosure form and reveal any issues with the house they are selling that they are aware of and give a historical account of the home. If a seller who is required to provide a Seller’s Disclosure does not do so within the timeframe outlined in the sales contract, the buyer can terminate the sale without any financial consequences.

Receiving a bad home inspection report can be stressful, but it doesn’t mean you won’t be able to sell your house. Your realtor is your partner in navigating this situation. He or she will be able to make recommendations and help you find the best path forward.

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