Before you purchase a home it is important to have a thorough inspection done by a qualified home inspector. You might think that you’ve found the right home for you based on the information provided by the seller, the look of the home and the location of the home. You might think that you are paying a fair price for this piece of real estate. However, if the home inspection reveals an expensive problem that will take a lot of work to fix, would you still feel the same way?
Almost every home inspection that is conducted on anything other than brand new construction will report on some problems that need to be fixed or suggestions that could improve the property. That said, not everything reported in a home inspection report is a big deal. Some things, such as a broken lock for example, can be fixed for just a few dollars and without a lot of effort.
Since almost every inspection report on previously owned properties contains some issue, the home inspection contingency clause in most offers to purchase real estate only allow a buyer to cancel the contract if there is a significant or substantial problem revealed by the inspection.
What constitutes a significant or substantial problem will vary depending on the property. Buyers and sellers should consider the cost of the repair in relation to the purchase price of the home. In many cases the following kinds of problems may be substantial or significant:
- Structural Elements of the Home: if the roof needs repair, the foundation is faulty or the structure is unsound then this is likely an expensive problem to fix. This may include water problems such as water in the basement when it rains.
- Plumbing System: if there is a complicated problem with the plumbing system it can be difficult and expensive to repair. However, if the problem is limited to one small area such as a sink then it may not be a significant problem.
- Electrical System: as with the plumbing system, if there is a systemic problem then it is likely significant. If, for example, the wiring system is not up to code, then that is a safety problem that can be expensive to fix.
- Furnace and Heating System: a problem with the furnace or heating system is also a safety issue and can be difficult to fix.
- Asbestos: this is not typically part of a home inspection but if asbestos may be present in the home then a potential buyer should hire an asbestos inspector to determine if it is there. Asbestos can be dangerous to breathe in and lead to serious health issues such as mesothelioma. It can be expensive to remove.
- Lead Paint: lead paint, like asbestos, is not typically part of a home inspection but it may be present in homes built prior to 1978. It is important to have your home tested for lead paint and to have all lead paint removed from the premises, especially if pregnant women or young children will be living in the home.
Other issues such as problems with individual appliances and cosmetic problems such as stained carpeting or torn wallpaper are usually insignificant and not a cause to renege on an offer to purchase real estate.
Before canceling an offer to buy because of a problem discovered during a home inspection, the potential buyer typically must share the inspection report with the seller and offer the seller the chance to fix the problem or negotiate a solution with the buyer. Once the seller knows of the problem then the seller is usually obligated to disclose the problem to other potential buyers. Therefore, many times it is in the seller’s best interest to cover the cost of the repairs or to negotiate with the buyer rather than to let the buyer back out of the agreement to purchase the home.
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