Finally. You got pre-approved. You found the perfect home in the perfect neighborhood. You made it through the negotiations. And now it’s time for the home inspection. This is the point where a lot of home buyers get nervous. And rightfully so. There are potentially a multitude of things that can be wrong with a house whether it was built a month ago or a century ago. That why it is so important to be familiar with the inspection phase of a transaction.
Take a Closer Look
In the standard Tennessee Purchase and Sale Agreement, there is a period of time for you to have an inspections to be sure it is in the condition you expect it to be. The inspection time period is a point of negotiations but 10-14 days is not unusual. It is highly recommended to use a professional home inspector to conduct your home inspection but that is not a requirement. A professional home inspector will perform a visual inspection of the home’s electrical, plumbing, structural, HVAC and roofing systems at a minimum. Some home inspector’s offer other services such as radon gas testing which you can purchase if needed. The cost of a home inspection varies from inspector to inspector and house to house but usually costs from $350-$600. Your Realtor can make recommendations for home inspectors that meet your needs and budget. You can also research them on sites like AngiesList or Yelp. Always ask to see a sample copy of the home inspector’s report to be sure it covers inspection items in a format and language that you understand. I always recommend being present for at least the end of your home inspection. Sometimes it is much easier to understand something that you have seen yourself versus just looking at a picture in a report.
All These Things Are Wrong?
When you first get your home inspection report, depending on the age and condition of the house, it can be scary and disappointing. Your first reaction may be to just walk away. And sometimes that is the best decision. But before you do that, spend some time looking at the report, ask clarifying questions of the home inspector and discuss it with your Realtor. In a home inspection report, there will be items that fall into a few categories such as (1) deferred maintenance (2) safety and (3) structural and (4) mechanical/appliances.
Deferred maintenance items are things like chipping and flaking paint on siding, overgrown vegetation on exterior walls, caulking around windows and doors, plumbing seals, etc. These are items that a homeowner (you in the future) should be keeping up with to keep the house in good condition. Sometimes time gets away from the best of us and some of these things slip.
Safety items are things like improperly grounded electrical outlets, out of date wiring, loose stair railings, improperly placed or malfunctioning gas shut off valves. These items need to be addressed to be sure you and the people who live in the home are safe.
Structural items include the roof, deck(s), the foundation, basement, cracks in walls, etc. Since a home inspector conducts primarily visual inspections, they will refer you to a structural engineer to further evaluate the soundness of a home if it seems there may be more serious issues.
Mechanical systems/appliances vary from house to house but typically include a heat and air system and a water heater. Some homes have multiple HVAC units, central vacuums, etc. Your home inspector will usually run the dishwasher, turn the oven on and check for temperature, check hot water temperature, set the HVAC temperature, etc. By using databases of model numbers, most home inspectors can estimate the age of water heaters, heat pumps, etc. and give you an idea of an item’s expected life. Your home inspector can tell you if something isn’t working properly but if you to understand why something isn’t working, you should bring in a qualified technician.
So now what?
After you have had some a couple of days to digest your home inspection report and discuss it with your Realtor, you have to make a decision. Is this still the right home for you? If it is, the next step is to create a list of items uncovered in the inspection that are most important to you. It is a good idea to prioritize this list from things that must be done to things that are nice to be done. That list is put onto a Repair Replace Proposal form by your Realtor and sent to the home seller’s agent. The sellers have a few options that you should be prepared for:
1. They can offer to repair/replace the items on your list.
2. The can offer to repair/replace some of the items on your list
3. They can offer to lower the price instead of repairing/replacing the items on your list
4. They can offer some combination of the above 3 options
5. They can just say no.
Be prepared to go back and forth a few times if necessary with counteroffers. Go back to your original prioritized list and be sure the deal you end up with is one you can live with and afford. Even a brand new home can have issues that need to be addressed. Staying calm and keeping your priorities in mind can go a long way in negotiating your way to your dream home.
Team Travis Close
Berkshire Hathaway HomeServices RealtyCenter