What is mandatory to fix after a home inspection? It depends on three factors

Inspect what you expect, or so the saying goes. More than ever, even in these days of multiple
offers and rising home prices, a home inspection should not be optional no matter what the terms of the sale. Jumping into a purchase this large should scream disclosure so that you can sign on the final dotted line with both eyes open, whether selling or buying a home.

After all, who wants to find out after moving into their dream home that the furnace is on the fritz or that termites have taken up residence in the attic? In case you're thinking of waiving the home inspection contingency, you should also be aware that some lenders require a home inspection as a necessary step before they finalize your home loan.

First, a home inspection checklist is made up, outlining how the inspector might have found damage or other causes of concern. He or she will be quite thorough, offering a snapshot of the home's condition at the time of inspection, pointing out everything from major fixes to minor cosmetic issues. Some of these may be representative of the home's, age, location, and how well the previous owners maintained the home.

But what are considered mandatory fixes? Here are the major areas that spell this out for you — (1) the terms of your purchase agreement (2) what the lender requires, and (3) local laws, codes, or regulations.

Most purchase agreements contain a home inspection contingency that allows the homebuyer to back out of the deal should the inspection turn up major issues. For example, if the inspection shows significant damage to the home's roof, the homebuyer could request the seller to replace the roof, or use the expense to ask for a lower sale price.  The home seller can decide to appease the homebuyer by lowering their price or fixing the roof and proceed with the sale of the home, or choose to sell the home 'as is' and reject any improvements.  It all becomes a point of negotiation after the original offer and can change the terms of the agreement.

As for the lender (particularly those that offer government loans), mortgages are only approved for homes that meet their standards for safety, livability, and mandate that certain issues be addressed before closing. The appraiser will inspect the property and assess the home's value before a deal can be made. If comparable homes in the neighborhood do not support the home's selling price, it could be problematic. But for inspection purposes, they will look for things such as ungrounded electrical outlets, the presence of lead-based paint, mold, a leaking roof, contaminated water, a non-working or inefficient septic system, or the lack of sources for heat. If any of these problems present themselves, the homebuyer and seller can negotiate who will pay for which repairs and the deal can either continue or go dead.

Some states require the sellers to provide a report from a licensed pest control company showing that the home is free of termites. In others, if a home inspector finds home improvements, the seller made not to code, or without securing a permit, the local building official will hold the seller liable, requiring them to bring the improvements up to code and pay increased permitting fees.

Because of all this, it has become increasingly popular for sellers, in preparing their homes for sale, to consider having a home inspection done before listing it. Getting caught off-guard can be very disconcerting, so getting ahead of it permits the possibility of a smoother closing process.

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Roxy Redenbaugh, Broker

Sr Mortgage Consultant

Residential and Commercial

www.roxyloans.com

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