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What Repairs are Mandatory Following a Home Inspection?

What Repairs are Mandatory Following a Home Inspection?

James Furlo1 year ago

Once a home inspector examines a home and sends their report, the homebuyers likely received a long list of defects to be addressed in the home. Both buyers and sellers should become informed on which repairs are mandatory and need to be addressed immediately - before moving forward with a sale - and which repairs can wait. In the following article, we discuss the home inspection process and how to address mandatory verse optional home repairs.

What's the Purpose of the Home Inspection?

In any real estate transaction, the responsibility of uncovering any defects with a property fall upon the buyer. Buyers must conduct what is referred to as "due diligence" to ensure there are no significant problems with a home before they go through with a sale. This can include getting a title report, checking for permits for a recent remodel, verifying zoning, and getting a whole home inspection.

The home inspection is meant to give the buyer a comprehensive overview of the home's condition - from the roof to the attic, plumbing, electrical, smoke detectors, flooring, windows, HVAC, down to the foundation & crawl space - so that they can make an informed purchase. If a home inspection uncovers any defects, the buyer may try to renegotiate a lower purchase price, request the seller makes certain repairs, or forego the sale altogether.

Contingent Offers

Contingent offers are common and refer to situations where a buyer makes an offer on a home for a certain amount that's contingent upon something else. Typical conditions include the buyer accepting the condition of the property, the buyer securing a mortgage, or selling another property.

An offer contingent on a home inspection is an offer to purchase a home for a certain price on the condition that the home inspection does not uncover any defects to suggest the property is worth a lesser amount. If a home inspection does find defects, the prospective buyer can resubmit a lower offer, request repairs, or pull their offer altogether without losing their earnest money. Home inspection contingencies are commonplace in home sales.

Majordomo offers an integrated request list. After uploading your inspection and receiving repair cost estimates, you can build a custom request list of repair requests, credit amounts, and items accepted as-is. Then export a professional-looking addendum attachment to use when negotiating with sellers.

Contingent Offers for Repairs

Photo by Debby Hudson on Unsplash

Are there Mandatory Repairs or Fixes?

There are a range of issues that can be uncovered during a home inspection, none of which are legally mandated to be repaired before a sale unless included and accounted for in a sale contract. With that being said, some defects are more urgent than others and there are benefits to addressing them before closing.

More serious issues such as mold, plumbing, or electrical issues may make a home inhabitable. Also, it can be difficult to determine the extent of damage, it's possible the repair costs are much higher than you think! For urgent issues, the buyer needs to seriously consider whether they can wait to move into the home until these defects are addressed. Whereas some defects may be cosmetic only and can be repaired later.

Some urgent issues that may need to be addressed before moving forward with a sale include the following:

  • Pest infestations
  • Water damage and mold
  • Material structural defects (like a faulty roof or cracked foundation)
  • Fire or electrical hazards
  • Lead contamination

Majordomo helps you prioritize repairs by severity and urgency. Within 24 hours of uploading your home inspection, you'll get a list of repair estimates that are broken down by urgent, pressing, and cosmetic.

'As-is' Contract Provisions

Buyers should be aware that some states allow for 'as-is' contract provisions. The ‘as-is’ provision essentially releases the seller of most all liability relating to the condition of the premises. In effect, the buyer is agreeing to take title to the premises in its current condition and has no recourse against the seller.

Who Pays for Repairs After a Home Inspection?

It depends. If your sale contract has been fully negotiated and signed and includes an 'as-is' clause, the buyer assumes full responsibility for any repairs moving forward. However, if there is an offer contingency or the sale contract is not fully executed, the parties may negotiate to have the seller bear the cost of some repairs before going through with the sale.

It also depends on the market. If it's a seller's market (few homes, lots of buyers), then the buyer will most likely pay for any repairs to stay competitive. If it's a buyer's market (lots of homes for sale, few buyers), chances are the seller will pay for the repairs.

What are Common Repairs After a Home Inspection?

A home inspection will likely come back with a long list of issues ranging from cosmetic to potentially more urgent defects. Not every defect listed on the home inspection report will need to be addressed. Below are some of the common issues a buyer may want to have repaired before moving into a home:

  • Electrical panel issues
  • HVAC problems
  • Plumbing issues, like poor water pressure or leaks
  • Any broken appliances
  • An old roof, especially if you suspect water damage from a leaking roof
  • Drainage issues around the property which might be going into the crawlspace

When to Walk Away from a Sale

Buyers should examine the home inspector's report with a critical eye and understand the effects of not addressing certain repairs. For example, if the home inspection uncovers conditions that make the home untenable - because it's uninhabitable, not lendable, or too expensive to repair - and the seller is unwilling to make the necessary repairs, the buyer may need to walk away from the sale.

Also, keep in mind that there is still room for negotiations at this stage of the deal! And that no matter what the home inspection uncovers, the parties may be able to reach an agreeable solution.

First-Time Homebuyers Can Feel Overwhelmed After a Home Inspection

Sometimes, first-time homebuyers fall in love with a property, but then become overwhelmed when they receive their home inspection. Not only by the sheer number of defects, but they also struggle to determine what's urgent vs what can wait. So they walk away from the sale. Then about two weeks later, something amazing happens. They're had enough time to mentally process the inspection report that they regret walking away! Then, they're primed to almost accept any home's condition, no matter what the inspection uncovers!

This is where Majordomo can help. By providing repair estimates that are prioritized by severity and urgency, Majordomo helps buyers process the condition faster, and think about solutions, not only the problem. This reduces the chances of first-time homebuyers feeling overwhelmed when they first read an inspection report.

Main photo by Roselyn Tirado on Unsplash

James Furlo

Majordomo COO & co-founder, multi-family real estate investor, and former HP big data analyst. Interested in tech, real estate, and math.

About Majordomo

Majordomo created the Domoreport.

The Domoreport is the most in-depth report on a home’s condition ever created, yet it’s easy to read and you can quickly figure out exactly what your buyers need to know. It’s the new standard for helping home buyers quickly understand the condition of their home with local and highly accurate repair estimates based on their inspection.

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