Step 17 to Buying a Home: Tips for Reading the Inspection Report

Once the inspection report is complete, it’s important to review it carefully. Don’t be alarmed if the report is over 30 pages and lists 25 or more “issues” requiring attention—this is entirely normal. It’s rare to see an inspection report with fewer than five flagged items. However, it’s critical to distinguish between minor, mostly cosmetic issues (e.g., re-caulking a shower or a loose cabinet hinge) and significant problems like water intrusion, foundation issues, or malfunctioning systems.

Key Points to Remember About the Inspection Report
The inspection report is for your information—it’s not a to-do list for the seller. Focus on structural issues, safety concerns, and non-working appliances or systems.

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Tips for Reviewing the Inspection Report

1. Focus on Major Issues
   • Pay close attention to electrical, plumbing, roofing, foundation, or water intrusion problems. These can be costly to fix and might need immediate attention.
2. Consider Additional Inspections
   • If major concerns arise, you may want to hire specialists such as a structural engineer, sewer inspector, electrician, or pest control professional. Note that you’ll be responsible for these additional inspection fees.
3. Create Your Repair Lists
   • List 1: Items the seller must fix, without which you’re unwilling to proceed.
   • List 2: Items you’d like the seller to fix but won’t jeopardize the deal if they aren’t addressed.
   • List 3: Items you’re comfortable handling yourself or consider non-essential.
4. Collaborate on Strategy
   • Once you’ve compiled your lists, email them to us for review. We’ll help refine your requests to ensure they’re reasonable and prioritize critical repairs.
5. Negotiate Repairs or Credits
   • You can request either:
     • Repairs: The seller addresses specific issues before closing.
     • Credits: A monetary amount deducted from your closing costs, enabling you to handle the repairs post-closing. For example, a $2,000 credit would reduce your closing costs by that amount, giving you funds to allocate for repairs after you move in.
6. Focus on What Matters
   • The key items in the report to prioritize are:
     1. Safety concerns
     2. Structural problems
     3. Malfunctioning components (e.g., HVAC systems, appliances).
   • Avoid requesting cosmetic fixes like paint touch-ups or gutter cleaning. If perfection is a priority, consider new construction. Otherwise, understand that resale properties often come with minor imperfections.

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Negotiation Process

1. Timeline
   • If repairs are straightforward, negotiations may be resolved quickly.
   • If contractors need to provide estimates, expect the process to take 3–7 days or more.
   • Keep in mind there is no strict timeframe for sellers to respond. Patience is key.
2. Agreement
   • Once an agreement is reached, your attorney will draft a formal addendum specifying the agreed repairs or credits, which the sellers will sign.
   • Sellers must complete all repairs by the final walkthrough, providing receipts to verify the work.
3. Disagreement
   • If an agreement cannot be reached, you have the right to cancel the contract and receive a refund of your earnest money.

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Home Warranty Option

As part of the negotiations, you can also request that the seller provide a home warranty covering major systems and appliances for the first year. Let us know if you’d like to include this in your negotiation strategy.

If you have any questions or need assistance, don’t hesitate to contact us!