What Happens after a Home Inspection?
Sellers often dread this crucial stage of the home selling, but home inspection for buyers is a definitive factor to weigh their final choice. It allows them to identify all the structural deficiencies or cosmetic shortcomings of the house they intend to purchase.
A home inspection for buyers is a major factor in any given real estate investment and legal contracted. Once the inspection has been conducted, the two parties can move forward with the negotiation process. It aids in identifying all the repairs that need to make, and the buyer gets a chance to decide whether he/she is willing to invest in a house with structural deficiencies or repair needs.
Upon receiving the home inspection report, the buyer can either make a decision to negotiate with the seller on repairs and reducing the overall cost. Or, the buyer can discard his/her offer for the property in question. In this article, we will take a detailed look at what happens after a home inspection is conducted and what it entails for the buyers and sellers.
Here’s everything you need to know
A Home Inspection
Once the buyer and seller have accepted each other’s offers, they have over 15 days to hire a home inspector. Many mortgage lenders and financial institutions also require a home inspection report to protect the loaned amount. The home inspector conducts a diligent and long inspection of the entire structural makeup of the property.
He/she is responsible for examining the various features of the house, including the roof, electrical wiring, foundational defects, plumbing and cosmetic deficiencies, amongst others. The home inspection report is handed over to the potential buyer, and it identifies all the repair and maintenance needs of the property.
Buyer’s Choice & Seller’s Dilemma
Home inspection for buyers is extremely essential in order to ensure a pragmatic and beneficially buying decision. It allows the buyer to review the actual condition of the property and examine its structural integrity. If the repairs are too overwhelming and major, the buyer can either gain an upper hand in the negotiations, or discontinue with the process.
If the buyer is inclined to continue with the purchase, the seller can be persuaded to perform the required repairs or drive down the costs. However, if the buyer is overwhelmed by the structural deficiencies, he/she can take the deposit and walk away. Then, the seller would have to restart the selling process by listing. Many sellers end up taking the property off the market and performing extensive repairs to restore its market value.
In many situations, sellers end up making the requested repairs, only to find that the buyer has backed out. Do they get to keep the security deposit in such a situation? In the state of Illinois, sellers will have to approach the court to keep any part of the security deposit, ensuing legal battle, which many deem unworthy of the effort.
Buyers often deem it more beneficial to negotiate with the seller, and this can also workout in the favor of a seller who needs to sell off urgently. In such a situation, the buyer can demand a reduced price and other concessions.
If a seller agrees to perform the required repairs, it is important to hire a licensed contractor and keep receipts for every single repair. Sellers who think they can handle the job themselves need to sit back and hire a licensed professional as the receipts are a requirement for the paperwork.
Repairs & Negotiations
If the buyer decides to negotiate with the seller for fixing certain damages or performing certain repairs, he/she will have to dispatch a written request of the items that need to the fixed. A real estate agent can help fill out all the necessary paperwork and forms. A list of all the repair items will be required, alongside the home inspector’s report, which will cement the need and significance of the repairs requested by the buyer.
When the seller receives the list of the requested repairs, he/she can either continue with the repairs and make the sale, or discontinue the selling process. Sellers can also negotiate and chose to perform some repairs while leaving some others. Basically, the home inspection leads to a negotiation process regarding the defects of the property and how they ought to be dealt with. It is a detrimental process that can make or break the sale.
It gives the buyer a powerful negotiating leverage, especially if the structural damages are serious and the seller is focused on selling. If the seller is eager to sell and wants to do that fast, the buyer has more leverage in negotiations. Aside from requesting the seller for repairs, the buyer can also ask for price reductions. This written request can be submitted alongside the list of required repairs.
In certain cases, sellers agree to some of the requests made by the buyer, while in certain other cases, the entire process comes to a halt. Either way, it is important to note that a home inspection is always in the best interests of the buyer. It allows the buyer to understand and identify that actual market value, longevity and structural integrity of the property he/she intends to invest in.
Many mortgage lenders and banks also require a home inspection report before approving the loan just to make sure the buyer is investing in a sturdy property. A home inspection report has a major impact on the overall buying process and it validates whether or not your investment is a financially sound and beneficial decision. Your real estate agent can help you find a credible home inspection professional.
If you’re buying or selling in Illinois and dreading a home inspection, give us a call. Our team members will breeze you through the process and provide you ample information to put your fears to rest. As seasoned industry experts, we can help you ensure a smooth selling or buying process to secure your financial and investment goals.