Your worst fear has happened. Your fantastic deal looks burst because of a bad home inspection report. But should this be the case? The answer is no. A negative home inspection result does not necessarily translate to an end of that superb deal that has so far left both the buyer and the seller satisfied.You can still negotiate an acceptable deal even after a negative assessment report has been passed on a house by home inspection elevators. In this article, I will be showing you what you can do to salvage that deal.
What do you do after a bad home inspection result?
After a bad home inspection result, the first feeling is that of a sinking sensation. You feel like freaking out; everything seems to be lost. You the seller and even you the buyer begins to experience a panicky despair. What you thought was a great deal had turned south.
I’ll tell you this now, do not panic. The deal hasn't gone to the trash can yet. Even with a negative report after a home inspection, there are still many ways to redeem that wonderful financial deal you had bargained. All you two (the buyer and the seller) needs to do is to renegotiate some items in a mutually satisfactory fashion and continue with the transaction.
Below are some practical steps you can apply to move forward with the buying and selling process.
Try not to panic
You must realize that freaking out will make you lose objectivity and this will adversely affect your ability to maintain a clear mind necessary to move forward. You should know this now. That you got a bad home inspection report that doesn't translate that your deal is dead. It only becomes a deal killer if you panic or freak out.
If you are the seller, well, this is the time you have to take a deep breath and start considering the most viable options available and agreeable to you and the buyer. Are you willing and ready to fix the damage that has been discovered in the inspection? Or are you willing to discount it, so the buyer fixes them?
If on the other hand you are the buyer and you already have money in escrow with the seller, you can consider fixing the problems yourself with the seller knocking off the cost of repair from the initial price. Also, consider the minor things you feel you can comfortably fix on your own without the seller’s input. Maybe things you would love to remodel anyway no matter their condition.
Both parties should be involved in choosing who repairs the damages
It is always advisable that the buyer and the seller agree on the contractor that will fix the discovered damages from a bad home inspection report to avoid future litigation. If the buyer leaves it entirely to the seller to pick out the contractor, the seller, due to
the fact he or she is concentrating on a new home might get someone that would do a shabby job or use inferior materials to save cost.
The seller should also not leave it entirely to the buyer, or else the buyer might use the opportunity to not only fix the damages but remodel those sections to their preferred remodeling plan at a higher cost and make the seller bear the cost through sales discount from the repairs.
Financial implications and considerations
In whatever you do, both parties must consider the financial implication that the home inspection result has thrown up in the deal. Is the cost implication worth it for both the buyer and the seller? There is no point in agreeing to repair terms that would impact adversely on your finances or shoot beyond your monetary considerations. Always make sure things fall between your financial plans.
Consider the other parties financial situation
It is also a wise to consider the other parties financial situation when negotiation on the repairs of the damages discovered after a home inspection report. For example, the seller might genuinely want to fix the problems but is financially constrained from doing so. Or on the other hand, the buyer might want just to bear the cost solely because the house matches their dream but cannot due to limitations of finance.
Through communication and as negotiations proceed after the bad home inspection result. Both the seller and the buyer can truly access the other parties financial situation, and if the deal is one that they were okay with before the home inspection report, and one party knows it can fix it without much ado, then that party should go ahead and fix it so the deal can be closed.
According to the American Society of Home Inspectors, a bad home inspection report is a documented professional opinion released after a visual inspection and operational evaluation of a home’s systems, structure, and components geared toward determining the current conditions of the property. So if the home inspection result shows that the damages found in the house are just too much for you to contemplate fixing, then the best thing is to cancel the deal.
There will always be another buyer or seller that would be willing to go into agreeable negotiations with you. There is no need continuing with a deal that is no longer viable or meets your financial considerations. The essence of a good deal is one where every party felt they took something beneficial away from the negotiation table. Anything short of this is not a good bargain for both parties involved.
In all things, both parties should remember that communication is the key factor in all negotiation and that they should get their realtor involved in the whole process to get the best professional advice. Your lawyers should also be involved to include all modifications to terms legally in the contract to avoid issues of future litigations.
It is equally important to state here that it is advisable to always schedule a home inspection before closure on a home purchase deal. After an agreement has been closed, nothing much can be achieved regarding negotiation between a buyer and seller on a bad home inspection report. At this point, the buyer is on his or her own.