You’ve just had your home inspected for a real estate purchase. You’re unsure about the results and anxiously await the home inspector’s inspection report. Many buyers and sellers will ask the home inspector, “Did we pass or fail the inspection?”
So let’s examine the question, can you pass or fail a home inspection? No, you can not pass or fail a home inspection. A home inspector does not issue a passing or failing grade for home inspections. The home inspector does not score a home inspection. The home inspector examines the condition of a house and whether or not the systems and components are in working order. A home inspector offers a professional opinion of the house and documents needed repairs and safety concerns.
It’s important to remember that no house is perfect. Every house, regardless of age, has some defects or deficiencies. However, just because you can not pass or fail a home inspection, a home inspection can still go wrong and can open the door for renegotiations.
Just because a home inspector notes that repairs are needed does not mean the seller is obligated to fix anything. However, if a seller does refuse to make repairs, the buyer may walk away from the deal. The home inspector does not give a passing or failing grade on an inspected house; however, a good home inspection can feel like a passing grade, and a bad home inspection can still feel like a failing grade.
So What is a Home Inspection? It’s not a Passing or Failing Grade
A home inspection is a trained professional’s opinion of the home’s overall condition at a designated point in time. Although it may seem so, you are not taking a test. A home inspector will not grade your home. While a set Standards of Practice provide direction for home inspectors to follow, some home inspectors go beyond these minimum standards to varying degrees when they inspect a house. As such, every home ‘inspector’s opinion can differ somewhat.
According to the Standards of Practice, a home inspector is to examine and report the condition and age of the various components of the home including the foundation, structure, roof, electrical, plumbing, HVAC systems, exterior, grounds, etc. Home inspectors should document defects related to the items in the Standards of Practice, however many go far beyond these standards to provide their clients with the best service possible.
For example, some home inspectors, because of their vast experience, training, and knowledge, may cite specific building code violations even though home inspectors are not building code enforcement officers and lack the authority to do so. While the two have similar training, they are vastly different. The building code information the home inspector provides their clients is likely accurate, but it doesn’t mean a repair is required. Home inspectors do not have the authority to enforce building codes. For more in-depth information read our article Do Home Inspectors Interpret Code Violations.
The purpose of the home inspection report is to provide home buyers with as much information as possible about the home they are buying. The home inspection report can also be used to confirm the information on the seller’s property disclosure. When the home inspection report contains major deficiencies that don’t line up with the seller’s property disclosure, a home buyers expectations of the property may be altered which can affect their desire to purchase the house.
How Home Inspections Have Changed Over the Years
In years past, a seller could get by listing a home “as is” and digging their heels in refusing to make repairs on their home. Back then, information on homes was scarce and hard to come by. Buyers did not have the plethora of information that they have today.
Home inspection reports were short 5-10 page checklists done on a clipboard and contained no photos. Then laptops, digital cameras, and email made it possible for home inspectors to write and deliver digital reports, but they too were still limited and took a long time to produce. Nowadays, home inspection reports are 50-100 pages in length and loaded with details and potentially hundreds of photos documenting every aspect of the house.
There are also more new homes being constructed today than at any other time in history. Sellers of existing homes are not only competing against other existing home sellers in the market. They are also competing against developers who are building new homes at breakneck speeds. New houses 30 years ago would take 12-24 months to construct whereas now a builder can break ground on a new home and be completed move-in ready in about 4 months.
So in today’s marketplace, sellers have to become more proactive when selling their homes. We will examine some tips to help you have a good home inspection, even if the home inspection did not go so well.
One of the ways, a seller can avoid a bad home inspection is with proper preparation. We’ve compiled a list of 35 Tips for Home Sellers to Prepare for Home Inspection Day.
Sellers can Be Prepared with a Pre-Listing Home Inspection
The home inspection industry is changing fast, and one of the best things a seller can do to prepare for a home inspection is to have a pre-listing home inspection. By hiring a home inspector before you list the property for sale allows the seller to deal with major issues that will likely arise in the buyer’s home inspection.
A seller has the opportunity to deal with these major items up front and on your time table. Many of these repairs can be completed at a much cheaper rate because you have the time to shop contractor bids without the emotion involved of a spooked home buyer who is threatening to walk away from the transaction.
This philosophy is not shared by some real estate agents. They feel a pre-listing home inspection may open a can of worms that could delay or prevent a house from selling. Keep in mind, we are talking about major defects, not minor cosmetic defects. A major defect will almost inevitably arise in a buyers report and will have to be corrected or renegotiated anyway.
Why not be a proactive seller rather than a reactive one. By being a proactive seller, you can build trust in the real estate transaction with potential buyers by calming their fears. This could even help you to get multiple offers to purchase driving prices up.
For example, a foundation defect that can be corrected for $3000 before the house is listed and on the sellers’ time frame could yield a higher selling price. Whereas that same $3000 repair could turn into a $5000 price reduction if the seller can’t secure a contractor to repair the damage before closing and has to panic and accept a buyers repair credit request.
Another thing to consider regarding pre-listing home inspections is that wouldn’t it be more prudent for a home seller to have their own independent home inspector. Consider this, why would you not want to have an independent third-party home inspector representing you and your interests?
The buyer will have a real estate agent and a home inspector representing their interests. In other words, the buyer will have two independent professionals representing and protecting their interests. The buyer has most of the leverage which can unbalance the scales and provide buyers added bargaining power. Many sellers cave into buyer demands simply because they lack an understanding of the process and never have their own representation.
Should Sellers be Present for the Buyer’s Home Inspection
This is a question I hear often. Let’s consider some facts here. Many real estate agents will tell sellers that they need to leave home during the buyer’s home inspection. That’s simply not true. For the time being the house still belongs to you and you have a right to be there if, for no other reason than to answer questions, the home inspector may have. If you can’t be present, consider having your listing agent or a family member attend the home inspection on your behalf.
You don’t need to follow the home inspector around and look over their shoulder during the inspection, but being present to clear walkways, answer questions, and provide documentation of work and service performed can shed light on what may appear to be a questionable finding.
Should Sellers Be Willing to Negotiate Major Repairs?
If your home inspection has already taken place and your buyers have the inspection report in hand, be willing to negotiate the repairs within reason. Most home buyers are level headed and understand they can’t ask or expect to have a perfect house. While some home buyers will misuse the home inspection report, especially if they have a novice buyers real estate agent who is trying to please their buyer client, and try to milk the seller for every repair possible.
Again, you are not required to fix anything. You always have the choice to refuse repairs, but it could cost you the sale. If you are willing to repair major items related to the foundation, structure, roof, electrical, plumbing, and HVAC systems, most buyers will find this counteroffer acceptable and move forward with the purchase.
If the home buyer chooses to walk away from the home purchase, it may be a good idea to offer to buy the home inspection report from the former buyer. This will allow you to address items in the inspection report before placing the home back on the market. The home inspector may also be willing to consult with you about the inspection findings and provide guidance on making necessary repairs.
A Good Home Inspection is Considered a Passing Home Inspection
The best outcome is that a good home inspection comes back which in essence means you passed the home inspection phase and you can move forward with the closing as planned. The buyer can use the home inspection report to aid in putting together a weekend “to do list” for minor repairs and aid in planning maintenance once the buyers take over ownership of the house.
The average American family moves every seven years. Establishing good maintenance habits early in your home ownership will help keep the house in good condition for many years to come. Keep good records of the repairs and maintenance you perform as those records will come in handy when it comes time to sell again.
As part of your annual maintenance and to help ensure a passing home inspection the next time you sell, consider making an annual home inspection part of your routine maintenance. Many home inspectors provide past clients a reduced rate maintenance inspection where the inspector visits the home to check the structure, roof, exterior, electrical, plumbing, and HVAC systems to help you catch needed repairs early before they become major headaches later.
What to do if You Feel Your Home Failed a Home Inspection
Remember most homes have some problems that are considered cosmetic and nearly every home has some kind of building code defect. Building codes change every three years and adopted codes vary from locale to locale. A home could’ve been built a year ago but if the building code was updated a month ago, some aspect of the home will likely be a code violation. Homes are only subject to the building codes that were in place at the time the home was constructed. Renovated homes are subject to current building codes with some exceptions.
Cosmetic repairs are considered observed defects that were taken into consideration when the offer was made. Cosmetic repairs should not warrant a price reduction after a home inspection unless a health or safety concern, such as mold or lead-based paint, was discovered. If cosmetic repairs have caused a buyer to cancel a purchase contract, the buyer will likely have to forfeit all or part of their earnest money.
If the buyer persists and you feel the repair request is not reasonable, you are within your right to refuse repairs and cancel the purchase contract. You can withdraw the purchase contract and move on to another buyer.
However, if the buyer is making a reasonable offer based on a structural problem identified in the home inspection report, you should strongly consider making the repair. If you can’t afford to fix the problems with your home and the buyer is willing to accept a financial concession, you should consider accepting the offer and move on.
Ultimately the choice is yours. You can accept the offer and sell the home or cancel the contract. However keep in mind that the next buyer will likely discover and request repairs too.
In closing, we’ve offered several scenarios for dealing with good and bad home inspections. The good news is a bad home inspection doesn’t have to be a failing home inspection for a purchase contract. The problems identified in a bad home inspection can be corrected provided you are willing to make the necessary repairs identified.
With proper maintenance and preparation, a good home inspection can be achieved. And while there is no such thing as a passing home inspection, a good home inspection sure can feel that way.
How long after a home inspection does the buyer have to back out? Generally, a home purchase contract has a 7 or 10 day contingency period with a 2 day review period to request any repairs. However, this is still negotiable. Buyers have 7-10 days to find and hire a home inspector, receive the report and request any desired repairs or send a formal request to exit the purchase agreement. Often times to exit the contract you’ll need to allow the seller an opportunity to address the reasoning why you wish the exit the purchase contract.
Will mold fail a home inspection? Nothing scares a buyer worse than mold. Mold will not necessarily fail a home inspection, but it’ll need to be addressed quickly because of the health concerns related to mold. Even small amounts of mold can cause serious health concerns if not properly treated. Merely cleaning the area may not be enough, primarily if the source of the mold was not corrected. Mold can return fairly quickly if not remediated correctly.
Should a buyer order a reinspection after repairs are made? If your home inspection identified repairs that needed correcting, you likely requested repairs to be made by a licensed contractor. Provided a licensed contractor completed the repairs, a reinspection may not be necessary unless you just want it. Your lender will likely accept the licensed contractor’s invoice on letterhead as sufficient justification of repairs.
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