DID YOUR HOME INSPECTION FAIL? WE’LL BUY AS-IS!

What Exactly is a Home Inspection Report? 

Performed by a licensed professional home inspector, a home inspection is a comprehensive review of the home that’s for sale, based on a visual evaluation and testing the home’s systems and components. The result is a home inspection report, which details the current condition of the home and alerts buyers to any major issues. Most buyers request a home inspection when buying a home so they can avoid spending thousands (or more) in unexpected repairs after closing, and to protect themselves from overpaying for the property. The home inspection report describes a house’s physical shape and identifies what might need crucial repair or replacement.

Is a Home Inspection Report Contingency Common? 

A home inspection contingency is an addendum to the offer contract that allows the buyer to conduct an inspection and then back out of the deal if they are unsatisfied with the findings. Occasionally (and most commonly in a very competitive sellers market), buyers may waive their right to an inspection in order to make their deal more appealing to the seller.

Sellers are often caught by surprise when a buyer’s inspection report comes back with a long list of repairs, even if the home isn’t very old. Here are some of the most common major issues that come up during inspections.

Top Reasons Home Inspections Fail

• Roofing issues: Roofing troubles can range from a few missing shingles to leaks or soft spots, or even a full roof replacement if the roof is old or failing.
• Electrical problems: The most common electrical issues include wiring that’s not up to code, frayed wiring, or improperly wired electrical panels.
• Plumbing issues: Leaky pipes (and resulting water damage), failing water heaters, and sewer system problems are some of the most expensive.
• Foundation problems: Cracking foundations, settling, and basement water damage can be costly fixes.
• Termites and pests: Termite damage, as well as the presence of other pests or vermin, can be a big red flag for buyers.
• Mold: Mold issues are a common problem, especially in wet or humid climates, and repairs can be extensive.
• Window and door issues: Failing window seals, windows and doors that don’t open and close properly, or broken panes are commonly found by inspectors.
• Asbestos or lead paint: This is a serious issue, and something you should be especially cautious of if you’re selling an older home. Many contracts have specific requirements related to asbestos and lead paint, so be sure to disclose everything you know.
• Chimney damage: Old chimneys can be a safety hazard, and they often need to be removed if not in working order.

What Happens After a Home Inspection

Depending on the terms of your contract, the buyer may do one of three things after receiving the inspection report on your home:

• Request repairs: The buyer may request that the seller complete a list of requested repairs, as a condition of the sale moving forward.
• Ask for a credit: The buyer may request a credit (also called a concession), in an amount that’s enough to cover the repairs. They request a dollar amount they want back as a closing credit, which won’t change the purchase price, but will lower your net profits. This is a common option for buyers who want to do the repairs on their own terms, or if sellers are refusing repairs.
• Back out of the deal: A worst-case scenario, the buyer can usually back out of the deal as a result of a bad inspection.

What are the Sellers Options

You have a few options, and should pick your course of action based on what makes the most sense for you financially and for your local real estate market. Here are some options:

• Make the repairs: If you feel that the repair requests are reasonable and you can afford to complete them, this is usually the best course of action. If the deal does fall apart, you’ll have to disclose the findings of this first report if you re-list your home, and you could risk scaring off a future buyer.
• Give a credit: As we mentioned above, buyers are often amenable to a repair credit.
• Sell as-is and lower the sale price: Selling your home AS-IS with a lower sale price can be a practical solution if you can’t afford to do the repairs or if you’re in a hurry to sell.

Selling Your Home AS-IS Can Be Beneficial for You as the Seller

• If you want less hassle when it comes time to sell your home, you may want to think about selling your home “as is.” Selling “as is” simply means selling your property in its current condition, with  no improvements.

There are four primary reasons or benefits as to why sellers decide to sell “as is”:

Low Upfront Expense

• “As is” sellers are not expected to spend money on pricey improvements, like updating the kitchen or bathroom, or replacing the windows. Instead, an “as is” seller chooses to not make any repairs.

Little Upfront Work

As an “as is” seller, you also don’t have to go to the trouble of clearing out your belongings, going into an organizing frenzy, or taking the time for a deep cleaning. With the proper disclosures concerning the state of the house, your marketing will not be any less effective, and the buyers may let you leave some or all of your unwanted stuff behind.

Estate Sale

When deceased parents leave their homes to their children, the best way to divide the value of the property is by selling it and distributing the proceeds among the siblings. In such cases, when no one has the time or money to prepare the house, it is best to sell “as is” in order to acquire and disperse the money quickly.

Selling A “Tear Down”

When the land on which your house sits is more valuable than the structure itself, it is typically best to sell the property “as is.” It makes no sense to improve a house that will be torn down for a new structure, therefore; selling “as is” may be in your best interest.

The Home Needs To Be Priced Appropriately

• If you want to avoid investing money on improvements, your asking price should typically be reduced to below market value, as well as the amount it would cost for the future buyers to make their own changes. If the home is in poor condition or has not been updated, most buyers interested in the home will be investors or builders who will look to fix up the home and flip it or tear it down and build a new structure. Real estate investors and builders will want to purchase an “as is” home at below the property’s current market value to ensure they make a profit on their investment.

We would love to speak with you regarding any property you need to sell AS-IS! If you have any questions at all, please fill out the form below and we’ll contact you.