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All About Home Inspections For Buyers and Sellers
All About Home Inspections For Buyers and Sellers
In northern Illinois, a professional home inspection helps a home buyer to make sure that there are no major structural, health or safety issues with the home. But some buyers and their agents think that a home inspection is a chance to negotiate a better deal by finding everything wrong with the house and demanding that the seller remedy some or all issues. So, which is it?
What Is A Home Inspection?
A home inspection is a visual evaluation of a home done by a licensed home inspector. The standard home inspector’s report will cover the condition of the home’s heating system; central air conditioning system (temperature permitting); interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows, and doors; the foundation, basement, and structural components.
When a home inspection is done as part of a home sale there are multiple objectives which both the home buyer and home seller should understand:
- The inspector is primarily looking for material defects. A material defect is a specific issue with a system or component of a residential property that may have a significant, adverse impact on the value of the property, or that poses an unreasonable risk to people. Examples are a leaking roof, water in the basement, faulty wiring, or the presence of radon, asbestos, or mold.
- The inspector may identify the need for an additional inspection on a major system such as the foundation or the roof if there is a potential problem that goes beyond the standard home inspection. For example, for a wet basement, the home inspector may call for plumbing or foundation inspections to determine the cause of the problem and likely remedies.
- Most inspectors will offer information on the general life expectancy of systems but usually won’t give an estimate for a specific unit in the home. For example, the average life expectancy of a water heater is 10 - 12 years, but a home inspector won't say that a particular water heater will last or die in a specific number of years.
- Most home inspectors will note issues that are not material defects but do come under the purview of a standard home inspection. Common examples include rusted or dented gutters, inadequate attic insulation, or cosmetic damage to floors, walls, or cabinets.
- Many inspectors enjoy the education aspects of their job and will educate the home buyer on the operation of the systems like plumbing, electrical, heating, and air conditioning.
What a Home Inspection Is Not
The home inspection isn't a second showing where the buyers can decide if the house meets their needs, or a time to bring in friends or family members to point out everything they think is wrong with the house. Unless the friend or family member has been in every other house the buyer viewed, he can’t possibly know whether the house is the best choice for the buyer.
What Are Inspection Requests?
Based on the recommendations of the home inspector a buyer can ask the seller to repair problems or provide financial credits at closing.
Buyers should focus on addressing any material defects that are identified and refrain from asking for everything that an inspector calls out. This is clearly defined in the purchase contract (version 7.0+) that we use in northern Illinois:
"The request for repairs shall cover only the major components of the Real Estate, limited to central heating and cooling system(s), plumbing and well system, electrical system, roof, walls, windows, doors, ceilings, floors, appliances, and foundation. A major component shall be deemed to be in operating condition, and therefore not defective within the meaning of this paragraph, if it does not constitute a current threat to health or safety, and performs the function for which it is intended, regardless of age or if it is near or at the end of its useful life."
This means that if the home inspector tells the buyer that a 15-year-old hot water heater has a typical life of 10-12 years if the water heater works, replacement is not a valid repair request under the contract.
How Are Inspection Requests Negotiated?
How a buyer and seller handle inspection requests will depend on the seriousness of the issues and the typical practices in the local market.
In our area inspection requests are usually made in writing by the buyer's attorney. The agents and attorneys negotiate requests in consultation with their clients. The final agreement for repairs or credits are always done in writing and become part of the contract.
Most sellers agree to at least a few repairs because it’s usually best to keep the buyer already under contract rather than to go back on the market and find a new one. If it’s a hot market the seller might say no to doing anything and cancel the contract. A buyer can’t force a seller to perform repairs or offer credits. But a buyer can choose to terminate the contract if the seller refuses to address material defects discovered during the inspection(s).