Inspection reports require more negotiations

Amelia Smith

Amelia Smith & Associates

Ding. Ding. Ding.

You have successfully negotiated the residential purchase agreement to buy or sell a home. Both parties have reached accord, and the property is in escrow. Is that the end of negotiations? Or should homebuyers expect a second round?

During the early stages of a real estate sales transaction, there will likely be an inspection made of the property being sold. It is commonly referred to as a home inspection and typically occurs in the first 17 to 21 days after an offer is accepted.

Those early stages are known as the buyer's due diligence period when they have the contractual right unless negotiated away in the purchase contract to inspect anything and everything. Even invasive inspections may be made, but the seller must first provide written permission after receiving a complete explanation of the invasive inspection to be made and remedy for repair after the fact.

Unless the home is new, it is most common for at least deferred maintenance to be found. Even newer homes may have material defects. Once they are identified what comes next?

A buyer may choose which items found on the inspection report are important to them and which they may be willing to overlook and become responsible for personally. Next, they present the seller with a request for repairs based on all inspections completed, and it is common to submit a copy of the inspection report to the seller with the request.

Pursuant to boilerplate language existing in the California Association or Realtors standard residential purchase agreement, the seller has no obligation to even respond to the buyer's request for repairs. It is true regardless of what is found on any inspection reports.

It is usually in the seller's best interest, however, to negotiate acceptable resolution with the buyer by making some, or all, of the repairs, or by giving the buyer a monetary credit through escrow at closing in lieu of repairs. This interest is because the buyer has an absolute right of cancellation if agreement cannot be reached after the request for repairs is submitted to the seller and before the buyer's contractual inspection period expires.

Most often, it is less objectionable for a seller to accede, compromise or otherwise work with a buyer for resolution of requested repairs. The other choice is to refuse the request, risking cancellation and making it necessary to start over with another buyer.

Ding. Ding. Ding.

The second round of negotiation has begun.

Is the request for repairs concerning health and safety items such as a trip hazard caused by an invasive root system, a deck railing that is too low or anti-tip brackets on the stove? Or does it include items that are cosmetic in nature, such as plumbing corrosion, peeling paint, chipped tile or grout that can be expected in a home of a certain age?

Buying or selling a home is almost always larger than the sum of its parts. It can be an emotional decision on both sides with consequential considerations moving forward. In other words, it is often in everyone's best interest to be reasonable, view the bigger picture and attempt to do what's fair.

If someone has questions about this topic or anything else considering the sale or purchase of real estate, feel free to call on me. It is always my pleasure to serve any real estate needs.

Amelia Smith works with Pacific Sotheby's International Realty; she can be reached any time at (760) 505-1553 or visited at http://www.AmeliaFSmith.com. Her broker's license is BRE #01017964.