Great! You found the home you really love. Now it’s on to the inspections. This is an important part of the home-buying process. A major problem with a property can be a deal breaker for many buyers. As your Realtor I insist that any buyer have their own inspection done before closing on a home. The home inspector will locate deficiencies with the property and create a report to let the buyer know what’s wrong. What happens then, though? Whose responsibility is it to fix the issues that the home inspector discovered? – As with many problems, the answer is “it depends”.
One large determining factor in how problems found in a home inspection are dealt with is how severe the issues are. Depending on where you live, some problems may even have to be addressed before the property can be sold. State-level restrictions vary, but most are rooted in making sure that sellers can’t avoid fixing potentially dangerous problems or leave them for the buyer to discover on their own. Even if a problem isn’t critical, most states require that any problems found by a home inspection be disclosed to potential buyers. This disclosure is a big deal, as it can significantly affect how much the buyers are willing to pay.
Beyond repair and disclosure requirements that vary from state to state, different loan programs (such as those offered by the Federal Housing Authority or Department of Housing and Urban Development) may have additional requirements when it comes to problems discovered during a home inspection.
Many loan programs also have very specific guidelines regarding the condition of the property that a buyer can purchase using those loans. If a loan program won’t allow a purchase while unsatisfactory conditions exist, the issues must either be repaired or have satisfactory arrangements made to facilitate the repair before the purchase can continue. Keep in mind that not all loan programs will make allowances for future repairs, either; in those cases, the repairs will either have to be made in full or the buyer will have to find a different program that does not follow the same strict requirements.
In the event that there aren’t specific regulations at the state level or restrictions in the buyer’s loan program concerning problems with the property, it falls to the buyer and the seller to determine what repairs will be made. This is typically the 2nd round of negotiations, as buyers are willing to pay more for a property that they don’t have to make extensive repairs to.
In many cases, sellers may offer to cover the most pressing repairs and address any serious issues. This should be agreed to in writing, either at the request of one of the parties or as a condition of the mortgage loan that the buyer is using for the purchase. By formalizing the agreement in writing, it ensures that both parties understand their responsibility and protects the seller from potential legal action regarding issues that weren’t addressed – provided that the seller completed all of the repairs that they agreed to.
The strength of the housing market can have a big effect on who does the bulk of repairs on a property. If similar properties are plentiful, it creates what’s referred to as a “buyer’s market”; buyers have a lot of options and can easily walk away from the purchase if they don’t get what they want. In a “buyer’s market”, the buyer has a lot of leverage and can usually get the seller to agree to either a lower price or a higher percentage of the repairs. When the opposite occurs and there are few choices, a “seller’s market” is created. Buyers can’t walk away as easily and be guaranteed a good deal elsewhere, so sellers can often hold their ground more and get buyers to agree to higher prices or a greater percentage of repairs.
I am here to help and guide you through the process of home inspection and the subsequent negotiations, as well as other situations that may arise – that is my part of my job as your Realtor.
Do you have a need for commercial / industrial / retail space? Are you ready to buy or sell a home? We can help you with that… just call us at 702 SELL NOW or click on this link to my website http://www.702SellNow.com
Choose to have an amazing day…..Jeff