Dealing with Negative Home Inspection Reports as a FSBO Seller



When the purchase of a home is made, one of the first steps during the escrow period is for the buyer to order a professional home inspect. A certified home inspector will come out to the property and spend a few hours investigating it. The inspection will cover everything from the condition of the roof to water leakage to drainage issues to?well, just about everything.

Once the inspection is done, the home inspector will kick out a report noting problems areas and needed fixes. In many cases, there will be a lot of recommended fixes. Most of these, however, are going to be very small and inexpensive in nature. Your best bet as the seller is typically to agree to fix them or provide money at the closing for the buyer to do the job. The money typically comes in the form of a discount from the actual amount the buyer pays you at settlement.

While this all sounds straightforward, things can occasionally go bad. Assume you receive and accept an offer on your home. Now assume a home inspection is done and a repair report kicked out. While there are a bunch of small items, the report also contains language indicating the roof needs to be replaced. This is not a small item! What do you do?

At this point, you have a few options. The first is to repair the roof. The second is to discount money out of the closing for the buyer to do it. The third is to walk away from the deal using the argument that the roof does not need to be replaced. Unless you are absolutely sure the roof is fine, your best option is to try to negotiate a compromise with the buyer. Your negotiating position should make it clear that you are willing to address the roof issues, but not pay for an upgrade to the current roof.

In many instances, this type of a problem will lead to the home falling out of escrow, to wit, the deal dies. If this occurs, you may think the first move is to put the home back on the market. This is false. The first move is to deal with the roof issue. If you run out and put the house back on the market, most states require you to provide the negative home inspection report to any subsequent buyers. Obviously, that is a problem.

If you are selling your own property, it is important to understand that the home inspection report is going to require some repairs. Just watch out for those major ones.