When a potential home buyer makes a purchase offer on a home, it’s often contingent on a home inspection. This can be an uncertain and often stressful few days as both parties await the home inspection results. Provided the home inspector doesn’t discover any deal breakers, the potential buyer will choose to move forward with the home purchase.
So what are some home inspection deal breakers which can kill your deal? Deal breakers in a home inspection are major deficiencies discovered during the contingency period which alters the client’s decision to move forward with the purchase of a house they’re under contract to purchase.
Most of the time, the items listed in the home inspection report are relatively easy to negotiate. But occasionally, a significant issue may arise that neither the buyer nor the seller was anticipating. These potential deal breakers may scare off the home buyer if the seller isn’t willing to address them.
So, let’s look at what potential deal breakers may be lurking inside your home. Some of these items may surprise you.
Significant Problems with the House Itself
Foundation Settlement Problems
Your home’s foundation is the most critical system in your house. If the foundation fails, nothing else really matters. Foundation problems caught early can be relatively easy to repair. However, a foundation repair that requires a structural engineer could cost thousands to tens of thousands of dollars to repair.
Foundation problems tend to arise because of poor drainage around the perimeter of the home or deterioration due to age. Minor foundation cracks are common; however, excessive step cracking and separation of masonry joists or a sagging floor or roof structure can be a sign of a major foundation problem.
Water Intrusion Problems
Water intrusion problems can be caused by underlying issues that simply aren’t easy to correct. Many water intrusion problems are caused by design flaws in the house or improper lot grading.
For example, some older concrete slab houses were not constructed with proper grade clearances. During times when a heavy rain comes, water intrusion problems arise if stormwater runoff around the home has nowhere to drain.
Homes with basements are also vulnerable to water intrusion problems around basement windows and doors, exterior walls that were not adequately waterproofed or the waterproofing has deteriorated due to age.
Extensive Termite Damage
Termites are common in many parts of the world. If caught early, termites can be treated by a pest control specialist with minimal structural damage. The problem arises when the signs of termite activity are not detected or ignored until it’s too late. Termites feed on wood and under the right conditions a termite infestation can feed undetected until it’s too late.
This is why home inspectors and pest control specialists stress that a home is inspected annually and that an active termite bond is in place. A termite bond protects a home against termite activity and in some cases will even cover damages caused by termites if missed by the pest control company issuing the bond.
Minor roof problems are often considered to be a simple repair. Minor repairs like loose or missing shingles, sealing around plumbing vent penetrations, and flashing repairs, if caught early are a relatively inexpensive repair. However, if problems with a roof are ignored structural damage can result, such as damage to the roof sheathing, trusses, or ceiling joists.
A roof that is past its useful life can lead to significant problems. A full roof replacement can be costly, and likely a cost most buyers just don’t want to incur.
Most electrical issues are inexpensive to repair while others could be potential deal-breakers. Some electrical problems such as GFCI repairs, double-tapped breakers, and open junction boxes can easily be fixed for a few hundred dollars.
But, there are electrical issues that could cost upwards $20,000 or more to correct depending on the size of the house. Old electrical wiring like knob and tube or aluminum wiring lead the way in cost because the work is labor-intensive and often requires tearing into walls to correct.
Outdated electrical panels, like Federal Pacific Stab-Lok breaker panels, are considered a fire hazard and need to be replaced because of their inherent fire hazard risk. Other costly electrical repairs include replacing old fuse boxes and replacing overhead electrical service or meter bases.
These repairs often result in power being disconnected from the house and involve an inspection from a local building code inspector before service can be restored.
Plumbing issues can cause considerable damage to a house and generally provide little to no warning. While some problems can not be avoided, old piping in a home can be a time bomb just waiting to explode. It’s one of those repairs that homeowners need to be proactive about rather than reactive.
Low water pressure can be an indication of a potentially serious problem, especially if the home has galvanized water piping. Galvanized water piping can also carry harmful contaminates for human consumption.
Additional piping concerns exist including polybutylene (PB) supply pipes and ABS waste piping. PB piping can fail, suddenly causing significant water damage. Galvanized, rusted cast iron and ABS plastic waste piping are also prone to failure. Polybutylene and ABS piping are considered to be defective products that have been featured in lawsuits nationwide.
Shallow Wells and Poor Water Quality
When buying a home that has a well the water quality is very important. Old wells tend to be shallow with poor water quality. It’s essential to have a complete water analysis done on a well to verify the water is safe to drink.
Poor water quality could lead to long term health problems due to contaminated water. If the water from the cold water tap has a “rotten egg” smell it’s a good indication there is sulfur in the water supply. It could cost as much as $6000 or more in some cases to have a new well drilled.
Old Septic Systems
An old or poorly maintained septic system can be very costly to repair or replace. Old septic systems tend not to have enough field lines in the leach field, which can lead to septic backups.
In many older septic systems, people would redirect water coming from bathtubs, sinks, and clothes washers to a nearby ditch because the existing septic system can not handle the load placed on it with those items connected. This is an EPA violation and can lead to fines if discovered.
In most areas, a new septic system that meets EPA regulations can cost a minimum of $10,000 to replace. If a pumping station is required, that cost could easily double. A poorly maintained septic system could require septic tank pumping and potential field line replacement if blockages exist.
Home Inspection Environmental Finds That Can Be Home Buying Deal Killers
Buried Oil Tanks
Homes built between1930-1990 were often heated with an oil furnace. Often oil tanks were buried underground. A buried oil tank that is no longer in use has to be professionally decommissioned, and the owner should have documentation to support that the tank was decommissioned correctly. An oil tank that is intact with no leakage can cost as much as $5000 to remove. An oil tank that is leaking can cost over $10,000 to remove, especially if groundwater is affected.
The Presence of Mold
Let’s be perfectly clear upfront. Mold spores are everywhere and in every house, and not all mold types are dangerous to humans and pets. Black mold is a common mold type that is harmful and can negatively affect people’s health.
Black mold often develops in areas where water intrusion or water leaks develop. Black mold will have a potent smell and will cause your eyes to burn from irritation in the short term. Long term exposure can cause severe respiratory health problems or other severe conditions, which could cause death.
Some mold conditions require simple cleanings, but more severe conditions could require mold remediation, which could cause several thousand dollars to correct.
Lead paint was used in homes built before 1978. Buyers purchasing a home built pre 1978 should be aware of the risk for the presence of lead-based paint. If peeling interior or exterior paint is present on a pre1978 house, the home inspector will document repair to be completed by an EPA lead-based paint contractor.
EPA lead-based paint contractors cost about two times the cost of a post-1978 constructed house due to the strict EPA guidelines that must be followed. Buyers should never sign a lead-based paint waiver without having a lead-based paint test performed.
Asbestos in the Home
Asbestos is a cancer-causing material that was commonly found in many building materials built before 1975. Building materials such as roofing felt, roof penetration sealant, tape used to seal ducts, ceiling tiles, attic insulation, piping insulation, and cement board siding, may contain asbestos.
Unless disturbed, asbestos usually isn’t problematic unless airborne. Asbestos insulation around pipes that are deteriorating can be a serious health issue and should be remediated by a qualified asbestos abatement contractor before closing.
High Levels of Radon Gas
Radon is a chemically nonreactive inert gas that is emitted from the ground. The most commonly recognized means of exposure in people is through breathing in the harmful gases. High levels of radon gases have been found throughout all 50 states.
However, high levels of radon gases are very sporadic. Every home located in areas of mid to high levels of known radon should be tested. There are about 20,000 deaths annually due to radon exposure. If a house tests positive for high levels of radon gas, a radon gas mitigation system will need to be installed.
Home Inspections Aren’t the Only Home Buying Deal Killers
Home Buyers with Unreal Expectations
If you’ve been in real estate and spent time on social media, you’ve probably seen the memes floating about that poke fun at home buyers and HGTV. The memes poke fun at how home buyers have unreal expectations about a property they are planning to purchase.
Networks like DIY and HGTV produce shows about buying and flipping houses or home inspections where a home inspector identifies all these building code defects, which lead to a complete home renovation. This is simply not a reality.
These shows, while very entertaining, have created unreal expectations in some home buyer’s minds. They forget these shows are staged, and most if not all the participants are actors. These home buyers have a hard time separating TV for reality, and when an actual real estate transaction doesn’t go as they think it should, frustration can set in.
Uneducated Home Buyers, Home Sellers, and Real Estate Agents
Nearly every deal breaker could be avoided with proper education. Today’s home buyers have had little to no training on how to evaluate a home other than what they’ve seen on TV. There are fewer students now than ever enrolling in technical schools to learn the construction trades.
Homebuyers lack the skills needed to properly vet a house before making an offer to purchase it. Many first time home buyers entering the market, were not taught as teenagers how to fix things around the house. They lack the necessary skills on how to evaluate even the most basic home defects.
Pre-Listing Home Inspections
Home sellers aren’t exempt here. They too lack the skills needed to prepare their homes for sale. Many home sellers have brought into the mindset that ordering a pre-listing inspection is a bad thing. Many real estate listing agents advise their clients against ordering a pre-listing home inspection because if an issue does arise, the sellers have to disclose it legally.
While yes, that is true if the problem exists, it will arise either now or later. Real estate agents and sellers that choose to bury their heads in the sand out of fear a home inspector may discover a potentially costly problem exists is only setting themselves up for failure at the most critical time in the real estate transaction.
A pre-listing home inspection can help the seller identify potential major problems upfront and take the necessary actions needed to correct the issues before potential buyers begin touring the home. Often, sellers can address these things for far less money with a contractor of their choosing if they are proactive about the problem rather then reactive in the moment when a buyer is involved and threatening to walk away.
It could also yield a higher sales price as it instills a level of trust in potential buyers resulting in multiple offers driving up the sales price. A pre-listing home inspection is generally a smart idea if the house is over 20 years old or if the seller has doubts or questions concerning the overall condition of the house.
Inexperienced Real Estate Agents
Many real estate agents, especially new real estate agents, lack the knowledge to properly advise both buyers and sellers before listing a home or submitting an offer sheet. These are things that aren’t taught in real estate school and have to be learned on their own.
Part of being a successful agent is not only being able to meet their clients’ home buying or selling needs but also in being able to direct them to the right properties in the first place. Many of these skills aren’t taught in a classroom. These skills are often learned the hard way.
Home Buyers get Analysis Paralysis
Home inspections have drastically changed in the last 10 years. It used to be that a home inspection report was typed, contained 15-20 pages of information and included only a few photos of defects noted.
Nowadays, inspection reports are written on mobile devices and can include over 50 pages of very detailed information with potentially hundreds of digital pictures and links to supporting documentation online. Buyers often lack the knowledge necessary to process this much information quickly and make an informed decision.
Sellers Response to the Home Inspection
Sellers possess one thing that no real estate agent or the buyer has. It can’t be measured or fully understood; it’s an emotional bond with the house. Often times this is a home they’ve lived in for years, they’ve raised a family and made wonderful memories there. This emotional bond can often cloud a seller’s judgment about the place they’ve called home.
Sellers can quickly become offended when a home inspector comes along and says there’s something seriously wrong that needs to be addressed. An emotional seller may see it as a personal attack against them and how they’d cared for the property. This couldn’t be farther from the truth.
Emotional sellers find it hard to accept that the house they’ve loved for many years may require serious work that they were unaware of. A refusal on their part to address specific items due to an emotional connection may ultimately cost them a sale if they’re not willing to negotiate.
Should you use a home inspector that your realtor recommends? A realtor will often refer you to a home inspector they’ve worked with in the past. This is usually not necessarily a bad thing; however, you should still do your own homework and speak with at least 3 home inspectors before hiring one.
How long does it usually take to get the results of a home inspection? Most home inspectors will have your home inspection report completed and delivered to you via email within 24-48 hours. Once the home inspection report is completed and been delivered, you’ll need to determine if any repairs are necessary to proceed with your home purchase.
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