Just as you read the inspection reports provided by the seller, you should also dedicate time to thoroughly review the inspection reports your vendors have provided.
You can expect most reports, especially property inspection reports, to be upwards of 30 pages in length with a list of 20-25 ‘issues’.
Please remember that the primary things we are looking for in inspection reports are safety and structural concerns as well as systems and appliances that are not functioning properly. Minor items are not a concern, as these tend to be cosmetic.
When reading the inspections reports, keep the following in mind:
- Look for any issues with electrical, plumbing, roof, foundation, or water intrusion. These can indicate possible costly repairs.
- If there are any major issues that are exceptionally concerning, decide if you want to have additional inspections performed. For example, if the property inspector noted possible foundation problems, it may be worthwhile hiring a foundation inspector to get more information on the extent of the potential damage. Again, you will be responsible for paying for any additional inspections, but doing so could save you thousands.
- Make a list of any issues you would like the seller to repair (or provide a cost offset) to continue with the transaction.
- Make a second list of other repairs you’d like the seller to fix, but aren’t deal breakers.
Dawn will also review the inspection reports and will have a discussion with you about your two lists to outline what she feels is reasonable. She will also call out any repairs she believes are significant if those aren’t on your list. Once we’ve arrived at a strategy, Dawn will circle back to the seller’s agent to negotiate. If there are only minor items needing repair, this negotiation process should go quickly. But, if there are major problems in need of repair, it could take additional time to allow for estimates to be obtained.
If a repair negotiation is reached, we will draft an agreement that the sellers will sign. All repairs must be finalized prior to the final walk through. The sellers will also have to provide proof of completion for each repair agreed upon in the renegotiation. If you’ve agreed to a credit for the repairs, this will also be drawn up as a separate addendum to the purchase agreement and you will use the funds to hire your own vendors once the property is legally yours.
During inspections negotiations, we can also ask for the sellers to provide a home warranty, if we haven’t already done so in the initial purchase contract.
If no agreement can be reached with regard to necessary repairs, you can cancel the contract and get a full refund of your earnest money deposit.
Now that the inspections are completed and all is well, let’s move ahead to the next phase of the process.
