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Home inspections can feel tedious, but they help protect a buyer from discovering any unsafe or expensive repairs after they move in. If issues do arise during this key step, it’s crucial to determine what fixes are mandatory after a home inspection.
Technically, no repairs are “mandatory” by law after a home inspection, but they may be necessary for the seller if not fixing them means losing the sale. The buyer may also need to pay for the repairs themselves if the seller won’t, as their mortgage lender or homeowner’s insurance company may insist on the repairs in order to process the loan or insurance policy. So even though these repairs aren’t required, they can feel mandatory for one or both parties involved in the sale.
If you’re about to conduct a home inspection, this is what the process of dealing with the issues that arise can look like.
When will you have your home inspection?
The home inspection comes after the potential buyer makes an offer and is getting ready to close.
The home inspection is a buyer’s opportunity to dig deeper and discover more about the home than they could see during the open house. The buyer wants to learn more about any health hazards, structural issues, and deal-breakers that the home may have in store. Then the buyer can decide if they're going to ask the seller to make the repairs, or if they’re comfortable make the repairs themselves.
While some repairs, like a broken air conditioner, may be easy enough to fix, others such as mold infestation may be overwhelming and make a home buyer want to exit the sale.
What are common issues found during inspections?
The point of the home inspection is to identify any health and safety issues, and address any problems that may make the home not as enjoyable to live in. While many problems could arise during a home inspection, these are some of the most common ones that tend to pop up.
- HVAC problems
- Plumbing issues such as leaks or lousy water pressure
- Broken or inefficient appliances
- Minor roofing issues
- Drainage problems
The following issues that can arise are examples of ones that buyers often want addressed. Whether or not the seller pays for them is another story:
- Electrical system: double tapped breakers, rusted panel boxes, faulty breakers, improper wire connections, defective electrical wiring
- Plumbing system: leaks in piping, toilet issues, inoperative water heater systems
- Heating and cooling system: broken thermostats, ductwork issues, inoperative heating or cooling systems
- Structural defects: wood rot, improper or failing support systems, cut or broken framing members
- Roof system: leaks, chimney issues, damage to roof coverings
- Health and safety: lead, mold, asbestos, lead-based paint, mold, moisture intrusion problems
Sellers generally won’t make changes for cosmetic preference or repair something that is nearing the end of its useful life. If a system is in working order, they will not replace it just because it’s on the older side.
Are fixing problems found during an inspection mandatory?
Legally, no home seller or buyer must fix any of the issues found during a home inspection, but chances are the buyer will feel pretty strongly about having major problems fixed by the seller. Who pays for and manages these repairs varies (more on that in a minute), but neither party holds a legal responsibility to address these changes.
Typically sellers should feel the pressure to fix any issues that are considered to be significant health hazards or cause structural risks to the home, and as a result can cause them to lose the sale, such as:
- Mold damage
- Water damage
- Tripping hazards
- Pest infestation
- Wildlife infestation
- Fire and electrical hazards
- Toxic and chemical hazards
- Major structural hazards
- Building code violations
If a buyer signs an “as-is” contract — which is only allowed in some states — they release the seller from the responsibility to make any repairs and must accept the home in its current condition. That being said, if a home inspection reveals too many problems, the buyer can walk away from the sale. Because of this, sellers may need to agree to making the repairs if they want to make the sale.
In some sense, fixing inspection issues may also be necessary to the buyer if their insurance company or lender won’t underwrite their homeowner’s policy or mortgage because of the risk those issues pose. If a buyer needs financing or insurance, they'll have no choice but to make the repairs if they want to buy the home and the seller won’t pay for them.
Who pays for the repairs?
Even though the repairs needed after an inspection aren’t necessarily mandatory to make, chances are the buyer will want them fixed. So, who fixes these issues? The seller or the buyer?
In many cases, the contract the buyer and the seller negotiated determines who pays for the repairs. If the buyer agreed to an as-is contract, legally the buyer is the one responsible for the repairs.
Another contract you may come across is a “standard contract,” which is a type of contract that requires the seller to pay for select repairs, as long as they don’t need to spend past a certain dollar amount.
Generally, who ends up funding the repairs comes down to negotiations and what the market looks like. In a buyer’s market, the seller may need to be willing to pay for repairs if they’re struggling to sell their home as-is. On the flip side, buyers may have to foot the bill in a seller's market if they want their offer to stand out as competitive.
Because there are no set rules about who pays for what, buyers will want to work with their real estate agent or attorney to negotiate who pays for repairs when making their offer.
Is it better to make the repairs or sell as-is?
Sellers need to be prepared for buyers to request repairs after a home inspection. Who can blame them for asking? If issues arise during the inspection, the seller’s real estate agent will give them a repair addendum and review it with them. At this point the seller can choose to make the requested repairs, refuse them, or negotiate a compromise.
It’s common for sellers to agree to make necessary repairs if the buyer makes a reasonable request. Plenty of sellers may not even realize there is an issue with the home until the inspection happens, and if they want to secure the sale, they are often ready to make repairs. If they don’t want to make all of the repairs themselves, they may be willing to take a lower offer to sell the home as-is.
If the seller refuses to make the repairs, and the buyer cannot afford to fix the issues, the buyers do have the option of exiting their purchase contracts and getting a refund on their earnest deposit. The inspection report needs to be cleared by a licensed contractor for a lender to be willing to give the buyer a mortgage, so if the buyer and seller can’t come together to solve the issues, the buyer may have no choice but to walk away.
What happens if the inspection goes well?
If the inspection goes well and the buyer finds their home inspection report is up to snuff, or they negotiate with the seller to fix any issues, the buyer will order a home appraisal. An appraisal seems similar to a home inspection, but serves a different purpose. While the home inspection identifies problems with the home, the appraisal process determines the home's current market value. The buyer’s lender will use the appraisal to help determine how much of a down payment the buyer will need to present at closing. Once the appraisal is done, the lender can start the closing process.
Now that the inspection and appraisal processes are complete, the buyer can get ready to close on their new home. It typically takes about 15 to 20 days to close on a home after completing the inspection and appraisal. In total, properties tend to close within 30 to 45 days after the buyer’s offer is accepted.
Once everything is squared away, the buyers can close on their new home and get ready for an exciting new chapter in their lives.