Generally, the path leading up to the home inspection is longer for the seller than for a buyer! The seller prepares for the sale by decluttering, cleaning, maintaining, repairing, and staging their home. Anxiety for the seller typically grows during inspection day and when the inspection report arrives. Sellers ask themselves: “What might the inspector find? What did we overlook?” And sometimes it can even feel as though someone is intruding in their space, and judging everything about their house.
Recently, veteran real estate agents with 30+ years in the industry told me that home inspections used to simply involve a professional looking at the major appliances and systems like the furnace, HVAC and water heater. Fast forward to today, and the home inspection has evolved to a comprehensive checklist that typically results in a 60+ page report with photos and even videos.
Pro Tip: Colorado Real Estate Group strongly recommends that sellers invest in their own home inspection before putting their house on the market. This helps the seller avoid surprises during the contract period, and also gives the seller more time to address any issues. It can be really stressful to find out a costly repair needs to be done under a tight timeline. This can all be avoided by having your home inspected before putting it up for sale.
Why do buyers have a home inspection?
There are many reasons that buyers invest in an inspection:
- To ensure they are not buying a lemon.
- To be informed about any potential additional costs they could incur after closing.
- To find any issues that could potentially be a deal breaker if they are not addressed by the seller.
As soon as closing documents are signed, all of the home’s issues will the responsibility of the new owner. The contract clearly states that the home is being purchased “As is” and “With all faults.”
Repairs can be stressful for sellers because it can mean less money for a down payment for their next home. It can be an emotional event for both parties when issues arise. Your REALTORS® will be a big part of your negotiations.
What kind of home inspections are available?
A buyer will have a certain amount of time that allows them to conduct pretty much any inspection they desire. A buyer will choose which inspections they deem necessary. The charges are also the buyer’s responsibility. As a matter of fact, home buyers can inspect anything they like unless it damages the home (in that case, permission has to be retrieved first).
Colorado Real Estate group typically recommends a minimum of 3 inspections to our buyers: general, radon, and sewer scope.
- General Home Inspection
The most comprehensive inspection. Here in Colorado Springs, buyers will have a general home inspection performed, and then the general home inspector will recommend any additional, necessary specialty inspections. Or the buyer can have a specialty contractor come in and evaluate a specific issue. We see that a lot with roof, foundation, sewer, or radon issues.
- Lead-Based Paint Inspection
If the home was built before January 1st, 1978, the buyer will have an option to do this inspection. This might involve scraping some paint off walls, so a buyer will have to get permission from the home owner first.
- Asbestos Testing
Same requirements as with lead-based paint.
- Meth Testing
If buyers suspect meth production in the home or if it’s disclosed in the Sellers Property Disclosure, buyers will choose to have meth testing done. Just like the other tests, scraping in areas will most likely be necessary.
- Pest Inspection
There are a few areas in Colorado that have pests like termites, but they are fortunately few and far in between.
- Radon Testing
Adding a radon mitigation system to a home usually costs about $1000. A seller will usually agree to install a radon system if high radon levels are found. For sellers, it might be a good idea to have this test done before putting the house on the market. That way you can have mitigation taken care of before the house is under contract.
- Sewer Scoping
Any sewer issue will be an expensive repair. If there are large trees close to your sewer lines, it is a good idea to have the sewer lines cleaned on a regular basis. This becomes particularly important if you home was built in the 70’s or earlier.
- Septic Testing
The seller usually pays for the required Health Department inspection, but there are additional tests the buyer can invest in.
If there is any suspicion of structural problems, a buyer will usually bring in a structural engineer right away. These are expensive fixes. I always recommend that sellers should have structural issues investigated BEFORE the home hits the market.
- If you have a manufactured home, a buyer might opt to have a specialized foundation expert come in and inspect the foundation.
- Well/Water quality testing….
Related Reading: How to Price Your Home to Sell
What role does the Sellers Property Disclosure play in Colorado?
The Sellers Property Disclosure should be filled out diligently by the seller and to the seller’s best knowledge. The seller will not be held liable if the seller does not knowingly or maliciously withhold information from the buyer. The buyer will acknowledge the disclosure, and will want to clarify and confirm sellers’ statements with the inspector(s).
How should the seller prepare for a home inspection?
Make sure that the home inspector has access to all areas of the home.
- Remove any items like boxes and stored furniture that could be blocking access to areas like the foundation, furnace, water heater, etc.
- Make sure all rooms are unlocked and accessible, or that keys are provided.
- Secure all firearms, valuables and medication (these items should already be taken care of before the house is on the market).
- Remove pets and yourself from the property in order to give the buyer space to inspect the home.
In our experience, some sellers tend to just wait and see what the buyer wants them to fix. But we find that when sellers fix all the little things, it gives a much better overall impression. There are very simple things you can do to get your home in tiptop shape for its inspection:
- Clean all the drains to ensure water drains quickly.
- Check under the sink to see if there are any leaks.
- All toilets need to be securely mounted to the floor and they need to flush properly and without leaks.
- Caulk around bathtubs, sinks, windows, doors.
- Change your furnace filter.
- Replace any broken light bulbs.
- Make sure you have carbon monoxide detectors within 15 feet of any bedrooms and within 15 feet of any gas fired appliance.
- Turn on all pilot lights ready for testing.
- Look around the perimeter of your home to see if the grading is appropriate and all water flows away from the house.
- Do you have a downspout extension to keep water away from your foundation?
- Is your fuse box properly labeled?
- If you have buckling carpets, consider having them stretched before putting your house on the market.
- Replace any damaged window screens.
- Make sure the buyer knows that closet doors that have been removed are still in the home and make a note about where they are.
- Anything that appraisers might red flag, will most likely be requested for repair by the buyer. Usually, those are any safety or health issues. For example, are the deck stairs wobbly? Especially VA and FHA appraisers will have issue with flaking exterior paint, so you might as well touch up paint while you are at it.
- Leave all remotes out and available for fans, blinds, and garage doors.
Related Reading: Selling your Home: How much money will you Make?
Should a seller prepare any paperwork for the home inspection?
Due Diligence documents might have a different deadline in your contract than the inspection itself, but make sure that all documents pertaining to the home are available for the home buyer and the inspector to review. Hard copies are great, but digital copies emailed to the buyer’s agent prior to inspection are ideal. The only hard copy paperwork then left in the home for the buyer are instruction manuals.
The buyer, if available for the inspection, and the buyer’s agent will review everything you provide. Don’t be surprised if hard copies are taken from the home, generally they are being scanned and returned to you.
What is not included in a home inspection?
A home inspection is not intended to be technically exhaustive, nor will your home be disassembled in any way. A general home inspection is just that: general. An inspector just makes recommendations that necessitate further investigation.
Home inspectors always suggest having the HVAC serviced and cleaned – we see it all the time.
Pro tip: Clean and service the furnace and/or HVAC system before listing.
What is the home inspection report?
As already mentioned, many reports are 60+ pages. They always come with images, but sometimes they even include video to show deficiencies.
Who should attend a home inspection?
The seller shouldn’t be present during the home inspection. I have seen sellers get offended by the findings of a home inspection, or they feel somewhat violated by someone going through the home with a fine-tooth comb. It’s best for sellers to just leave the home.
Pro Tip: Insist that the buyer’s real estate agent or at least a trusted real estate professional is present when the buyer and the inspector are in the home.
What are reasonable repair requests?
We still have a seller’s market in Colorado Springs. If the listed home is in a desirable price range, (below $300,000 is very competitive for buyers), then as a seller you can sit back and relax (some). There really isn’t that much sellers HAVE to fix, because a seller in a competitive price range will have the next buyer just waiting to jump into a contract. In fact, many times I see buyers write in their contract that only health and safety issues will be requested for repair. Though, it should be noted that many things could be presented as a health and safety problem. Nevertheless, it remains the sellers choice on what to repair.
Even in a seller’s market, repairs that would be an issue for other, subsequent buyers should be reviewed in detail. Think of it this way: If the seller and buyer cannot come to terms on what will [or what will not] be fixed and the home comes back on the market, sellers will have to disclose deficiencies to the next buyers. Sellers and real estate agents [in Colorado] are required by contract and statute to disclose any defects that they are aware of in the home. If the seller wasn’t aware of a specific defect before, they are now, because the buyer’s inspection report was probably submitted with the Inspection Objection Notice.
Real estate professionals are very aware of potentially losing a contract by either requesting too many repairs (buyers) or denying repairs (sellers). It can be a fine line to walk. An experienced agent will be able to advise you on how best to navigate these negotiations.
Sellers should evaluate repair requests if they could be a potential deal breaker for other buyers as well. Some examples of repairs that are usually potential deal breakers:
- Radon results higher than EPA’s recommended action level (4 pCi/L). Radon is a radioactive gas. It is colorless, odorless, tasteless, and chemically inert. The EPA recommends mitigation at or above the average radon levels of 4pCi/L. Long story short, most buyers will request that a radon mitigation system is installed or request a credit to install one themselves.
- Structural issues and mold will also immediately turn off buyers. These issues will warrant a more detailed discussion with the listing agent on how to handle the objection.
- Sewer problems. While structural issues are much more expensive, sewer problems (usually caused by mature trees) can cost a pretty penny. Therefore. they are requested or even rejected by many buyers. A fix could be as easy as just having the line cleaned out for a couple hundred bucks, or placing a liner into the current sewer pipes. Of course, many sewer repairs can be much more expensive.
- Any real health related items such as leaking gas or carbon monoxide from furnaces or small appliances.
- Costly items like roof, furnace, AC, or water heater.
- Buyer will most likely also request repair for items that appraisers might object to. Especially with government loans like VA, FHA and USDA loans, appraisers can get pretty picky. Appraisers are required to not just value the home, but also to pay attention to health and safety conditions of the home. This means appraisers often flag flaking paint on the exterior of the home and fencing, or damaged windows.
- Items required by statute. Best examples are CO detectors that are required within 15 feet of every bedroom and within 15 feet of any gas-powered utility (fireplace, furnace, oven etc)
Can a home fail a home inspection?
A home inspection is usually not a pass or fail situation. Buyers are emotionally involved in the home buying process and they invest a large amount of money (probably around $500) in the home inspections. They typically don’t want to see the money go to waste by just terminating the contract. Contracts are more likely to be terminated if there were major findings that are beyond what the buyer wants to deal with. It happens.
How can a seller research repair requests?
Some repair requests are easy to figure out. Maybe the seller suspected that something could be wrong with specific items. Other times the seller definitely knows that the inspector made a mistake, didn’t know how to use the flagged item, or it was an oversight. Yes, inspectors make mistakes.
A perfect example a situation like this: the inspector saw a repair patch in the home and there is no reference in the seller’s disclosure. Therefore, more information about it is requested.
If the inspector calls out the roof, plumbing leaks, window damage, foundation, etc, then it’s time to get the licensed professional contractor out to evaluate and give the seller a repair estimate. This will also be very helpful in seller’s determination of a possible credit. Credit options can be none, partial, or full credit to cover the cost of the repair.
What are the seller’s options for addressing problems found in the inspection?
- A seller can decide to make repairs themselves. These repairs must be accepted by the buyer.
- A seller can decide to have a contractor make repairs.
- A seller can give a credit to the buyer to cover future repair costs. A seller can take a credit off the purchase price or provide it as a credit towards closing cost.
- A seller can choose to not make the repair at all.
If sellers decide to offer a credit, how do you determine how much?
Honestly, that’s depends what the seller wants to give and what the buyer wants to accept.
It is common for buyers to just want the price reduction instead of actually rectifying the deficiency in the home. As a seller, that should definitely be evaluated.
Consider these questions:
1. Is there a backup offer in place? If so, now is the time to reach out to the buyer and start discussing possibly moving forward with their offer instead of offering a credit to the current buyer.
2. What are the requested deficiencies to be credited?
3. How much are the repair estimates?
4. What are the sellers’ and agent’s best guess about what the buyer will accept?
5. A seller should discuss strategies with listing agent.
Remember that the repairs do not have to be completed by the Inspection Resolution date. The seller simply has to state which items will be addressed and how.
How does the seller state the specifics about repairs in the Inspection Resolution?
In the Inspection Resolution, the seller describes which items are being addressed and how they are going to be addressed.
- The sellers may want to address items themselves. “Seller will touch up exterior flaking paint”
- The sellers will have a handyman address an item: “Seller will have contractor touch up flaking exterior paint and caulk windows”
- The sellers will have a specific trade address the item, but only if the contractor determines that the item actually should be repaired “Seller will have licensed plumber evaluate leak in the basement and make necessary repairs”
- If the contractor has already determined which detail needs to be repaired, then sellers can get very specific with what’s being done. “Seller will have licensed contractor repair leak under the sink in the powder room on main level”
Of course, there are many variations of how to write this up. This is a circumstance where the more specific the verbiage is, the better.
What if the resolution date is missed?
In Colorado, the contract to buy and sell automatically terminates if a resolution was not achieved or signed. This means a new contract will have to be drafted and signed by all parties.
Note: We are based in Colorado Springs, Colorado. If you are planning to sell your house in a different area, we can match you with an excellent local agent. Give us a call (719-321-0800) or email us (firstname.lastname@example.org) for a referral.