What Happens After A Home Inspection?

Most home-purchase contracts include an opportunity for the buyer to get a home inspection to find hidden issues from the untrained eye of the buyer. Another way to say it is: the home inspection helps uncover any defects that might suggest the property is worth less than the agreed-upon price.

But once the inspection is complete and the buyer reviews the inspection report, what happens next?

If the home inspection reveals that some systems within the house are not working as expected – such as a broken water heater, HVAC, roof, mold, etc. – the buyer usually has three choices:

  1. Accept the condition and move forward with the transaction.
  2. Ask the seller to make repairs or reduce the price.
  3. Reject the condition and walk away from the transaction, getting their earnest money back.

Let’s take a look at how each of these scenarios plays out.


Reviewing The Inspection Report

First, you’ll need to review the inspection report. This report is a comprehensive written report which includes photographs of issues found during the home inspection. The inspection should cover the structural components of the property and any built-in mechanical systems. So, you can expect to see descriptions of the roof, plumbing system, heating and cooling systems, and electrical system in the report. If your inspector found anything on these systems that’s not fully functional or in a condition that could cause health or safety issues, they will also mention that on the report.

It’s incredibly rare for a home inspector to find nothing wrong with a house, so don’t feel discouraged when you receive your report. As you look through it, you will need to decide which items you can accept as-is, which you would like to have repaired, and which need to be repaired for you to move forward with the transaction. Your real estate agent will relay your requests to the sellers through the required documents to keep you in compliance with your purchase contract.

Requesting Repairs

Requesting the seller makes some repairs is a standard part of a real estate transaction. Your real estate agent will typically attach snippets of the inspection report to the repair addendum for the seller to review. Remember, just because you can ask the seller to fix anything does not mean you should. Asking for cosmetic repairs or replacing older systems that are still functioning is frowned upon.

The seller will need to respond to your request within the timeframe outlined in the purchase agreement, which varies from state to state. During this time, the seller will have the chance to get estimates and consider whether or not they want to agree to complete the requested repairs.

Seller's Response and Possible Negotiations

Depending on what items need to be repaired, waiting on the seller’s response can feel like the longest wait of your life. The seller’s response will include the issues they’ll fix before completing the sale of the home.

The seller may agree to repair all, some, or none of the items you requested. If the seller agrees to make the repairs, they will need to complete them before the transaction closes. You may have the opportunity to do a final walk-through to check on the repairs and the overall condition of the home. Most purchase agreements require that repairs be completed by a licensed professional. And you’ll provide receipts to prove the repairs have been completed.

In some cases, they may offer to give the buyer a credit or lower the purchase price instead of making the repairs. This could be helpful if the time it would take to make the repairs would cause a delay in closing. It also might be your preference because then you’d have the option to complete the work yourself and save some money

The Ball Is In The Buyer's Court

Unless the seller agrees to repair everything the buyer requested, the buyer has the right to walk away without penalty. In that case, the escrow office would return their earnest money (unless the buyer canceled the transaction outside of the required time frame). However, you should be aware that the buyer will not be reimbursed for the home inspection.

As a buyer, walking away from a transaction may be necessary in some cases. But in many instances, the time it took to find the house and get an offer accepted will be enough incentive to keep moving forward even if all of the repairs you requested were not agreed upon.

If the buyer agrees to move forward based on the seller’s response, the next step will be for the seller to complete any agreed-upon repairs and the buyer to order an appraisal and work toward getting their loan approval.

Moving Forward

Many buyers consider the home inspection and the negotiations that follow to be some of the most nerve-wracking and frustrating parts of the home buying experience.

Similarly, the sellers and real estate agents agree because sometimes, the findings from the home inspection surprise the sellers and can throw a wrench in their plans. For example, if the house requires a new roof, that’s less money to use on a downpayment on their new home.

After completing negotiations, you can expect the rest of the process to take around 20-30 days, mostly related to financing. If you’re a cash buyer, you could realistically close escrow as soon as the inspection period ends.

It is always good to work closely with your real estate agent and look to them for guidance on the timing.

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