Home Inspections – A Context Shift

inspectionIn my experience, the home inspection is at the fulcrum of the residential real estate transaction. If a deal is going to sour, it is likely due to the home inspection. Although not required by laws or regulations, home buyers in Massachusetts almost always have a home inspection and the right to cancel the transaction if they are dissatisfied with the results.

Most buyers start the buying process thinking that the home inspector will find all the issues including what is not functioning properly and what may need attention in the near future. Buyers assume they’ll have the agent negotiate with the sellers to fix the problems or compensate the buyer in some way.

Sellers usually have a different perspective. They often feel that the issues are to be  reasonably expected given the age and general condition of the home or should have been obvious to the buyer from the start. In the sellers’ minds, the house comes “as-is” and the price has already been negotiated. After all, the sellers have lived with the issues for some time.

These very different approaches can make for difficult negotiations over issues that actually don’t involve a great deal of money. The solution is a different context for the home inspection.

Buyers will benefit most by using the home inspection to determine whether the home generally meets their expectations and if they want to proceed with the purchase. It is best if buyers focus on specific problems that were unknown prior to negotiating the sale price.  What doesn’t function properly given the age of the renovation, or the home, and the general condition of the house? Reasonable wear and tear is to be expected.  If an item is past its life expectancy and still works, then it is actually functioning better than expected.

The buyers and their agent should present the seller with a reasonable dollar amount for fixing the problems (I generally recommend against asking the sellers to make repairs because the buyers will have to inspect the work and this opens up a new set of problems). The sellers ought to approach the buyers’ requests essentially the same way. If the buyers could reasonably have expected the item to function properly, and it doesn’t, then the buyers request for compensation is reasonable.

There will still be complicated issues to resolve around what is reasonableness. However, if buyers and sellers approach the home inspection from the same context, those issues should be easier to resolve.

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