You would think that once a buyer and seller have agreed on the price and terms of the sale of a home that the hard part would be over. This is not always the case. Home inspections if not handled correctly can sometimes cause more anxiety than negotiating the price and terms of the home. Knowing a few simple guidelines will help in working through inspection issues.
Inspection Period aka Due Diligence Period
In Georgia, this period is usually called the Due Diligence Period. It is during this time, which is agreed to by both buyer and seller, that the buyer has the right at their own expense to inspect the property for defects. The most common types of inspections are Home Inspections, Termite Inspections, Radon Inspections, Septic System Inspections and HVAC Inspections. These and any other inspections that a buyer would like to have performed on the property must be concluded during the Due Diligence Period.
During The Inspection
In most cases, a buyer, or their agent, will arrange to have all required inspections scheduled during the same times. With the exception of the Radon Test, which takes several days, all other inspections could be conducted at the same time. By scheduling inspections this way it cuts down on the amount of time required which provides more time to resolve any issues that may need to be addressed.
It is a good idea for the buyer to attend the inspections so that they can see first hand what is being reported. It is never a good idea for the seller to be present during inspections. Some agents attend inspections, while others may stop in near the end of the inspection, while others do neither. I personally like to receive the inspection report from the inspector and after evaluating it, go back out to the house to view each item of concern. This equips me to properly advise my client on what is involved in addressing the inspection issues.
Evaluating the Inspection Report
Once the report is received, generally via email from the inspector, it is important to go through the report with your agent. Generally, the inspection will identify items as “Serviceable” or “In Need of Repair”. The ability of the agent to assist in the evaluation will depend on whether they attended the inspection and whether they understand what is needed to address the items identified in the inspection report. Each item should be considered individually and should reflect the seriousness of the defect, resulting in whether a buyer will request that the seller correct the defect; or whether the seller will consider agreeing to correct the defect.
Writing the Amendment to Address Inspection Concerns
Once evaluated it is now time to prepare the Amendment to Address Inspection Concerns. Although there are numerous ways to accomplish this; there are some that I would advise against due to the effects it has on the seller. One method to avoid is to merely reference in the amendment the item number in the inspection report that needs to be corrected. This is the easiest for the agent because it requires little, if any, effort in drafting a corrective action for the items to be addressed. It is also difficult for the seller to convey to a contractor exactly what needs to be done. The best way to handle it is to categorize the items being requested. Here are a couple of examples that will provide greater clarity and will increase the likelihood of a successful resolution to the Inspection Amendment.
1. Seller agrees to replace the existing LP siding, and prime, seal, caulk and paint it to match the existing siding at the following locations.
- Both sides of the chimney, where the siding meets the deck.
- The bottom courses of siding behind the AC unit.
2. Additionally, the seller agrees to caulk and paint to match all rusting nail heads installed in the siding.
1. Seller shall cause the electrical outlet to the right of the refrigerator in the kitchen to be GFCI protected.
2. Seller shall replace the GFCI outlet on the rear deck and cause it to be operational.
3. Seller shall remove the existing fixture above the master bathtub and dispose of it at their discretion.
4. All electrical repairs shall be performed by a licensed electrical contractor.
1. Seller shall cause the water pressure to be adjusted to a PSI of between 35 and 80.
2. Seller shall have a licensed plumber evaluate the moisture in the combustion chamber of the hot water heater, and to repair and or replace the hot water unit as recommended.
3. Seller shall cause the toilet in the main level full bath to be properly secured to the floor.
4. All plumbing repairs shall be performed by a licensed plumbing contractor.
By following these simple guidelines many problems and misunderstandings associated with Inspections can be avoided, and anxiety will be reduced. Buyers should require that receipts for work be provided prior to closing and sellers should not be offended by being asked to provide them.