home inspection report on table with flashlight

Selling your home can be a complex transaction with many twists and turns. One of those twists can be the home inspection. Knowing how to best respond to a negative home inspection can mean the difference between closing the sale or putting your home back on the market. It's best to put your ego aside, and prepare to compromise.

When you are reviewing the Purchase Agreement prior to acceptance, be sure your agent fully explains the Home Inspection Clause, the time frames that must be met, and what constitutes repairs that may excuse the buyer's performance. Talk with your agent about the different scenarios of what could happen and how sellers and buyers generally come to terms with negative items, both minor and major. Be prepared emotionally for what could happen. Your preparedness will go a long way to help you remain logical and calm through the process.

A Home Inspection report will classify items as maintenance items, minor repairs, and major repairs.

Maintenance items and minor repairs generally do not affect the habitability of the home but can add up monetarily if there are many of them. If the buyers are asking for these type of repairs, it may be in your best interest to either negotiate with the buyers, perhaps meeting them halfway, or complete the repairs if it means keeping the sale moving along on time.

Major repairs are considered items that affect the habitability or health and safety of the residents living in the home, or items that meet or exceed the threshhold dollar amount to repair that may be specified in your contract. Sometimes these defects found by the inspector were not known and can be a big surprise, and perhaps expensive to repair. Most buyers, whether it is the current buyer or a new one, will ask for these repairs to be done or expect compensation in lieu of repairs.

Before responding to the buyer's repair requests, you should get an estimate (or multiple estimates on big-ticket items) from a licensed contractor. An estimate will give you an idea of how much the repair will cost. You may not be repairing the requested items, but if you plan on giving some type of monetary compensation, you will know how much to give. All work should be done by licensed contractors for that specific trade. Items replaced or repaired by you must be equal or greater quality than what was originally found in your home. For example, if you need to replace your furnace, you must replace it with an equal or better quality unit than the original.

If the buyer is not willing to take compensation or a price reduction in exchange for requested repairs, then all repairs must be completed prior to closing, which may delay the closing. So, planning for repairs should take into consideration the contract closing date and whether or not you will need to extend your closing date in writing.

Depending upon the language in the inspection clause in your purchase agreement, saying no to the buyer's repair requests may allow the buyer to withdraw from the contract. If the purchase does not come to fruition and you put your home back on the market, keep in mind that you must disclose the known defects that you have not repaired to all subsequent buyers. So, making a sincere effort to work things out with the buyer is generally in your best interest. 

Although dealing with negative home inspection issues can be stressful, keep in mind that seasoned agents have lots of experience negotiating home inspection issues, and will always keep your best interests front and center. Be clear with your agent about what you can and can't afford to do, and let your agent work with the buyer's agent to bring it all together.