Your Home Failed Inspection. Is the Deal Dead?

You keep your home in good, working order. You maintain it regularly and repair what’s needed. So, when it’s time to sell your home, the last thing that you’re concerned about is the inspection.

But then it happens—your home has problems revealed by the pre-closing inspection, or worse, your home “fails inspection.” Or, if you’re on the other side, your dream home has failed the inspection, and now you’re concerned that you won’t be able to buy, or shouldn’t buy, the property.

What now? Is your real estate deal dead?

The answer is no—failing a home inspection can cause problems, depending on why the home failed, but it isn’t fatal to closing a real estate deal.

Handle the Problems Now

The first thing to be aware of, especially if you’re the prospective buyer of a home that has failed inspection, is that once the deal is done and closing has occurred, you as the buyer are stuck with whatever problems the home has.

That means that when you are notified that the home you are going to buy has potential problems as revealed by the inspection, you either act on those problems to get them fixed, or you can ignore them, and choose to take the home, problems (and failed inspection) and all.

Backing Out of the Deal

Most standard real estate contracts do allow a buyer to back out of a real estate deal, without penalty, should the home fail inspection. In very hot real estate markets, many buyers are voluntarily waiving this right. But generally, buyers can back out of the deal once a home fails inspection.

Negotiating Repairs

The problem is that you may not want to back out of the deal. You may really want the home, albeit, with the problems repaired or fixed.

Buyers can opt to renegotiate the purchase price, taking into account what it would cost to fix the items that failed inspection. In some cases, if buyer and seller can agree to the lowered price, the closing date may have to be postponed, to allow for necessary repairs, or just to allow the parties to negotiate the lowered sale price.

Ignore the Problems?

While you should never ignore a failed inspection, remember that inspectors are there to protect both parties. They aren’t there to help you get a real estate deal done or closed. That means that inspectors may sometimes be extra cautious.

Some problems shouldn’t be ignored, like roof or foundational problems, or major electrical issues. Other problems that may be fixable and which don’t affect the long term value or habitability of the home, could be ignored if the parties agree to do so.

As the seller, you may want to be at the home when it is being inspected, so you can see what the inspector is looking at and what he or she says. Usually, the buyer picks the inspector, but either party can agree on one—but you should never be told that you “must” use the other side’s inspector.

Problems inevitably come up in a real estate closing. Let us help you get the deal done right. Call the West Palm Beach real estate lawyers at The Law Offices of Larry E. Bray today for help.

Sources:

bankrate.com/finance/real-estate/5-biggest-home-inspection-mistakes-1.aspx

consumerscu.org/blog/top-reasons-why-homes-fail-inspection#:~:text=What%20happens%20if%20a%20home%20fails%20inspection&text=When%20an%20inspection%20reveals%20a,problem%20after%20the%20deal%20closes.