The real purpose of a home inspection is to gain awareness of the property you are looking to purchase. You, as the buyer, will have gained knowledge about the shortcomings with your property and can make a decision based on the inspector’s findings.
What are the options after a home inspection?
Ask for repairs – Most standard sellers will be open to a few repairs to the property to ease the buyer’s concern. The property is privately owned so the owner does not have to do any repairs, and some won’t. It all depends on the motivation and disposition of the current owner. It is common practice for buyers to ask for items listed as health and safety issues to be “cured” before proceeding. Items such as exposed wirting, broken glass, unstrapped water heaters and other hazards would be commonly asked for in repairs.
You can ask for as much as you like (you are not just limited to health and safety items) but generally 5 to 10 items is average. Again, the chance of getting these items fixed, will depend on many factors including: negotiations, sellers feeling towards buyer, market conditions, and overall condition of the property. A seller who has undergone many price negotiations leading up the escrow may have ill feelings towards doing any repairs to the property and may want to sell the home “as is”.
Ask for Credit -Sometimes in addition to or in lieu of asking for repairs, the buyer may ask for cash credit to fix the problems. Cash credits can be advantageous as the buyer will be able to fix the problems in a way that doesn’t make them worried about the seller picking an unqualified “low ball” contractor for a quick fix. The buyer is not bound to use the money for repairs, they are free to spend the money as they see fit.
Proceed with Sale -The above solution can lead to a continuation of sale when both parties can arrive to an agreement. After a home inspection, it is acceptable to continue with the sale of the home with zero talk of repairs.
Cancel Escrow – Every one in a while an inspection can reveal more problems than the buyer is willing to handle and the buyer can simply cancel escrow w/o penalty and continue looking at other properties.
Banked Owned and Short Sale Property -With REO (Bank Owned) properties, the property is sold “as is” from the the onset. Banks will very rarely acknowledge any information about the property since it was acquired through foreclosure and are unwilling to vouch for its shape.
Occasionally, banks will offer some cash credit but are under no obligations to do so. Most of the time, the banks will price the properties very competitively to receive multiple offers and may be unwilling to accommodate a buyer with credit since there are many backup offers.
Short sale sellers may be more willing to do repairs and credits, but most of the time, they will not have the cash to do so and the home ends up being sold “as is”.