I have heard of too many deals falling through because of home inspections. When I dig deeper into the story, I usually find that it was not because of the home inspection itself but because of how the results of the inspection were handled by the buyer agent. It comes down to setting the expectations for the home inspection.
There are examples where: The buyer agent, at the request of the buyer, submits an amendment to the Agreement of Purchase and Sale to delete the condition on inspection but inserts a long list of things for the seller to fix. Many times that caused the offer to die because the condition on inspection was not waived, or the purchase failed on closing because the buyer argued the quality of the repairs done by the seller was not satisfactory.
The purpose of a home inspection is to find latent deficiencies that would be considered as mission-critical for the operation/safety of the home, these are the items that are worth discussing/ negotiating during the conditional phase. As a buyer, you should always prefer to negotiate a lower price and do the repairs once the house is yours, rather than have the seller do the repairs before closing, trust me they DONT want to do this, and neither do you!
Here is how home inspection conditions should be handled. Do not misunderstand what I am about to say – there are circumstances where the buyer should not go ahead with the purchase (when the deficiencies are severe). But generally, use the following technique:
1. Prepare the buyer before the inspection starts by making sure they understand that the inspector checks everything. That is their job. The inspector may be liable for issues that were not pointed out to the client, the buyer.
2. Explain that the inspector will put a price for repairs on everything. (Changing a malfunctioning door handle, leak under the faucet, electrical outlet that does not function, etc.).
3. Distinguish between:
- Critical – must fix right now.
- Good – if fixed later.
- Optional (do it if you want to) – such as change a hinge, handle, small faucet leak or cosmetic issues.
4. Explain that the average resale home has $5,000 to $10,000 in non-critical repairs is normal for a resale house.
5. Now, have the inspector do their job.