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How to Overcome a Bad Home Inspection
November 8, 2021

How to Overcome a Bad Home Inspection

by The CE Shop Team

Home Inspections Don’t Have to Be Painful 

Home inspections are a crucial part of the homebuying process, but they can be nerve-wracking. While the inspection is underway, buyers’ and sellers’ agents alike might be wondering: What will the inspectors find? Will the sale fall through?

That anxiety is natural. A Zillow research report found that among sellers who had experienced an offer falling through, 15% attributed it to the inspection. But taking the inspection seriously doesn’t mean that it has to be stressful.

We’re here to talk you through the worst-case scenario — failing a home inspection — and how to stay calm through the process.

Why Do Inspections Fail?

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An inspection is intended to assess the condition of the home and uncover potential damage or safety issues. A qualified home inspector will examine the property top to bottom, from its plumbing and electrical work to its roof and foundation. They might recommend repairs or notify you if something isn’t up to current code.

“A home inspection is often necessary in a real estate transaction because it helps the buyer — and lender — ensure they’re making a good investment,” a Rocket Homes article says. “It also ensures the home is safe to live in. Typically, a contingent offer will require a home inspection to be done before a sale can happen because, if the inspection report shows any major problems, the buyer can back out of the real estate deal.”

These are the biggest reasons that home inspections fail, according to Rocket Homes:

  • Foundation problems
  • Roofing issues
  • Plumbing or pipe problems
  • Electrical issues
  • Building code violations
  • HVAC problems
  • Mold
  • Termites and other pests
  • Window and door issues
  • Toxic materials, such as asbestos, lead paint, radon, or carbon monoxide
  • Structural issues
  • Drainage problems

Home Inspections in a Hot Market

In this unique, incredibly hot housing market, some prospective buyers have gone to great lengths to make their offers more appealing, including waiving the property inspection. But most experts strongly recommend getting an inspection.

After all, home inspectors are trained to look for specific issues that could become major problems down the line. Ultimately, an inspection is in everyone’s best interest because it provides information that can save both the buyer and the seller time and money.

“The inspection is a crucial step in the homebuying process that if missed, could have some serious and expensive repercussions in the future,” a Rocket Homes article says. “Purchasing a home is the biggest investment most buyers make in their lifetime, which is why giving up the valuable information a home inspection provides seems downright silly.”

And despite strong competition, most buyers in 2021 didn’t compromise on getting an inspection, another Zillow research report found: 65% of sellers said they received at least one offer that waived an inspection, but 88% of successful buyers said they got an inspection before finalizing their home purchase.

“The discrepancy between offers that waive inspections and the share of buyers that complete one suggests that waiving inspection contingencies is not a surefire way to win against other offers,” the report says.

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What to Do When a Home Inspection Fails

As a seller’s agent, one of the best things you can do is encourage your client to thoroughly examine their home before listing it, keeping an eye out for common issues that could be identified during an inspection.

Some experts even recommend that sellers hire a professional to complete an inspection before listing their home so there aren’t any surprises that could cause an inspection to fall through. Although it’s an extra expense, likely to the tune of a few hundred dollars, it could prevent a lot of stress during the selling process.

“Although not required, sellers sometimes get a home inspection before listing their home to avoid surprises during the transaction,” a Zillow article says. “Regardless of how long you’ve lived in your home or how old it is, there could be unknown issues lurking under the surface that could derail a sale.”

The bottom line is that home inspections bring uncertainty, both about what might be found and how the buyer will react to the inspection report. But it’s important for you to keep yourself — and your client — calm, which includes preparing for all possibilities.

If the home inspector’s report identifies major issues, both the buyer and the seller have a few options. Worst-case scenario, the buyer backs out, but it’s more likely that the buyer and seller will begin negotiating. The buyer might ask the seller to complete repairs or ask for a closing cost credit — also known as a concession — to pay for repairs. Alternatively, the seller could offer to lower the price of the home and sell it as-is.

It’s also important to note that if a buyer does back out and the home goes back on the market, the seller will have to disclose whatever was found in the inspection report to future buyers. In that case, the seller might decide it’s in their best interest to make the repairs themselves anyway.

No matter what happens, emphasize to your client that knowledge is power — and that with the knowledge obtained from the home inspection, they can make better decisions as they continue in the process of buying or selling a home.

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