What Happens After a Home Inspection?

A home inspection is an objective visual assessment of a property’s condition, conducted by a professional, and serves as a significant step in the home buying process. It provides prospective buyers with a comprehensive understanding of the home they intend to purchase. This evaluation helps identify potential issues and acts as a protective measure, allowing buyers to identify defects not apparent during casual walk-throughs.

Receiving and Understanding the Report

Upon completion of the home inspection, the inspector will furnish a detailed report outlining the property’s condition. This document typically contains photographic evidence about the state of the exterior, interior, structure, and the electrical and plumbing systems. The initial pages provide general information, including the property address, inspection business details, and a key explaining symbols used to indicate concern severity. Common symbols indicate if an item was inspected, not present, a safety concern, a general repair, or a defect.

The report is systematically divided into sections, each focusing on a specific area of the house, such as the roof, HVAC systems, plumbing, electrical, and structural components. Inspectors detail the age, composition, and working condition of various elements within each room and system, highlighting issues like missing or damaged roof shingles, leaks, improper flashing, or mold growth.

Reviewing the report should begin with the summary page, as it typically highlights major concerns and suggested repairs. This summary guides the reader to more detailed information, including photographs. Paying attention to terms like “end of life” for appliances or systems indicates they are older and may require replacement soon. Some reports use color-coding: green for fine, blue for minor concern, yellow for moderate concern, and red for major concern requiring repair.

Evaluating Inspection Findings

After receiving the home inspection report, the next step involves assessing the significance of the identified issues. Distinguish between minor cosmetic or maintenance items and major structural or system defects. Minor issues might include chipped paint, small cracks, or a loose doorknob, which are common and easily remedied. Major defects are significant issues demanding immediate attention due to safety concerns, potential structural damage, or a substantial impact on the property’s value.

Prioritizing repairs should be based on safety, potential cost, and immediate impact on the home’s functionality. For example, faulty electrical systems, significant water intrusion, or compromised structural components pose immediate risks and often require prompt action. An inspector might note hairline cracks in a concrete slab, advising observation unless it is a horizontal crack with a bulge, which could indicate a more serious foundation issue requiring expert review. Problems with outdated electrical panels, such as older Zinsco and Federal Pacific panels, are flagged due to potential fire hazards.

Seek further evaluations from specialists when the inspector identifies issues beyond the scope of a general home inspection. If signs of a larger problem are found, such as potential foundation issues, an inspector may recommend a structural engineer. Suspected plumbing or electrical issues might warrant consultation with a licensed plumber or electrician for more in-depth assessments and repair estimates. Engaging specialists provides precise details on the extent of damage and accurate costs for necessary repairs, invaluable for subsequent decisions.

Negotiating Repairs or Credits

Once the inspection findings have been thoroughly evaluated, buyers must decide how to respond to the seller. Common options include:
Requesting the seller to perform specific repairs.
Asking for a credit at closing to cover repair costs.
Negotiating a reduction in the purchase price.
Choosing to terminate the purchase agreement.

The strategy for these negotiations should be developed in close consultation with a real estate agent, who can provide guidance based on market conditions and the severity of the issues.

Formulating a repair request requires clarity and specificity. Buyers should provide a detailed list of identified issues, referencing the inspection report and including any associated photographs. Focus on significant defects, safety concerns, and items not functioning as intended, rather than minor cosmetic imperfections. For major repairs, obtaining estimates from qualified contractors can strengthen the negotiation position when requesting credits or price reductions.

The negotiation timeline is typically outlined in the purchase agreement’s inspection contingency clause, often allowing seven to ten days for the buyer to conduct the inspection and respond. Sellers have several potential responses: they may agree to all requested repairs or concessions, offer a counter-proposal, or refuse to make any adjustments. The negotiation process may involve multiple rounds of offers and counter-offers, mediated by real estate agents, until an agreement is reached or an impasse occurs.

Finalizing Contingencies and Moving Forward

The inspection contingency clause in the purchase agreement governs the next steps after the home inspection and subsequent negotiations. This clause typically grants the buyer a specified period to conduct an inspection and either accept the property’s condition, negotiate repairs, or, if no agreement is reached, terminate the contract without penalty. Once an agreement on repairs or credits is reached, or if the buyer decides to proceed without further action, the inspection contingency is formally removed.

If negotiations are successful and both parties agree on a resolution, the terms are typically formalized in an addendum to the original purchase agreement. This amendment outlines the agreed-upon repairs, credits, or price adjustments, effectively satisfying the inspection contingency. With the contingency removed, the transaction can then progress toward closing, assuming all other contractual conditions are met.

Conversely, if an agreement cannot be reached regarding the inspection findings, and the issues are substantial enough to deter the buyer, the inspection contingency allows the buyer to terminate the contract. In such cases, the buyer typically receives their earnest money deposit back, as the contingency protected their right to withdraw. After the inspection contingency is satisfied, the focus shifts to other pre-closing steps, such as finalizing financing, conducting the appraisal, and preparing for the closing date, leading to the successful transfer of property ownership.