What fixes are mandatory after a home inspection?

A savvy homebuyer will schedule a home inspection for any home they’re serious about buying. 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.

Home inspectors generally use a home inspection checklist to look for damage or other causes of concern. Home inspectors are quite thorough at gauging the home’s condition at that point in time. From major fixes to minor cosmetic issues, the list could vary depending on the home’s location, age, and how well the previous owners maintained the home. 

If you’ve been watching the housing market and have decided that now is the right time to sell your home, you’re probably wondering what fixes are mandatory after a home inspection. After all, issues that come up in a home inspection can certainly slow down the home selling process. In short, no mandatory fixes need to be made after a home inspection. In fact, homeowners sell “handyman specials” of “fixer-uppers” all the time and are typically listed being sold “as-is.”

Any requirements that need to be met by home sellers are largely dependent on three factors:

  • What’s included in your purchase agreement
  • What your lender requires before they give you a home loan
  • Local laws

What does your purchase agreement say?

Standard purchase agreements generally contain a home inspection contingency that allows the homebuyer to back out of the deal should the inspection turn up any 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. At this point the homebuyer can either accept they will incur the cost of repairing the roof or choose to opt out completely and walk away from the deal.

What does the lender say?

Some lenders, particularly those that offer government loans, only approve mortgages on homes that meet their standards for safety, livability, and mandate that certain issues be addressed before closing. These lenders will have an appraiser inspect the property and appraise the value of the home before a deal can be made. Common issues that fall into this category include:

  • Ungrounded electrical outlets
  • Presence of lead-based paint
  • Presence of mold
  • A leaking roof
  • Contaminated water
  • A non-working or inefficient septic
  • No source of heat

If any of these problems present themselves, the homebuyer and seller can negotiate who will pay for which repairs. However, the seller can still refuse to make any improvements, at the risk of losing the sale.

What are the local regulations?

Some areas of the country have particular items that the seller of a home is responsible for before a sale can take place. For instance, Florida law requires a home seller to provide a report from a licensed pest control company showing that the home is free of termites.

In some areas, 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. They will require the seller to bring the improvements up to code and pay increased permitting fees.

If you’re preparing to sell your home, and want to prevent being caught off-guard during the negotiation process, you might want to consider having a home inspection done before you list your home for sale. This way you can address any underlying issues beforehand and allow yourself a smoother closing process. (See more on how to prepare for a home inspection before listing your home for sale.)

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