You’ve found the house you want to live in.

Yay!

You’ve been looking for awhile and now you’ve found it.

You went in low and asked the Seller to pay all your closing costs.  The Seller came back with the terms he liked. You went back a little higher than you started but still lower than what the Seller says.  You (and your Realtor) go back and forth. Finally, there is a “meeting of the minds”. Everyone agrees on the terms. One of the terms is that the sale is contingent upon a satisfactory home inspection.

Sounds good.  You’re excited.  Your settlement date is only 45 days away and you’ll be moving into your new house.  The house you picked out.  The house you really, really like. Really.

The Home Inspection

You go with your Realtor’s recommendation for a home inspector.  Or, maybe, you know one yourself. Or your brother-in-law’s cousin’s neighbor can do it.  Doesn’t matter.  The home inspection is scheduled and you’re all set to see what might need to be done.

Don’t forget this is the house you really, really want. The one that you sifted through dozens on the Internet looking for. The one you found after visiting dozens of homes, live and in person. You probably know there are a few things wrong.  You may have even noticed a few things when you and your Realtor walked through the house before you decided that this was the house.

The home inspector goes through the place with a fine toothed comb.  He checks the roof.  He checks the electrical systems and the box where all those circuit breakers are hidden. He checks all the plumbing as best he can by running water everywhere.  He opens and closes all the windows. Checks the outlets.  Looks up in the attic. Starts up the dishwasher and clothes washer. Runs the tub.

He goes over the place from top to bottom.

All of a sudden, the inspector is pointing out things you didn’t notice.  Maybe the heating and A/C unit isn’t functioning correctly. Ooops, there’s a leak under the sink in the hall bath. The roof is 20 years old and nearing the end of it’s “useful life”.

Yikes!

This house really isn’t what you thought it was.  The house you fell in love with when you placed the offer on it has a few blemishes (maybe a lot of blemishes).  There are things that need to be fixed.  Maybe they’re minor fixes. No big deal.  Maybe they’re major fixes that are going to cost a lot of money.

What Happens Next

You can keep your wits about you and understand that no house is perfect.  Not even those brand, spanking new houses that are being built to your custom specifications in that subdivision you like. Certainly, not a house that might be 20 years old.  Even if the house is “totally renovated” there are going to be places that the Seller cut a corner to save money or didn’t use the absolutely best material or whatever.

Depending on how you structured the offer, the Seller will most likely be responsible to repair or replace certain things found during the inspection process. You, of course, can ask the Seller to do whatever you want.  Remember, though, that you just put the Seller through the ringer getting the absolute best terms you could get out of him. He may be tapped or he may not be feeling too kindly toward you. Either way, the Seller may or may not be able to make the repairs or replacements.

Some Options

You can hold your ground and demand that the Seller fix the things that should be fixed (consult your Realtor). You can negotiate some items and not others. You can even negotiate some kind of exchange like a lower sales price or some additional closing help instead of the Seller performing the actual repairs. Or, if you can’t come to an understanding with the Seller you can walk away from the deal and get your deposit back.

Walking away is pretty extreme but I’ve seen people do it.  The home inspection is kind of like meeting your future in-laws for the first time.  If things go well the marriage will work out just fine.  If they don’t, it may be time for second thoughts.  It is far better to walk away from a house with major work and expensive repairs needed than be saddled with a house that could possibly be a money pit.

On the other hand, it’s not always a good idea to stamp you feet and demand that the Seller do each and every little thing on your wish list.  This is not something the Seller is really obligated to do and it’s no reason to walk away.  If you’re reasonable and you understand that every house has flaws and defects and, let’s be honest, something that you will need to maintain over the years, you can get the Seller to do what’s necessary and get a good house in the bargain.

Remember this is the house you really, really want and the home inspection contingency is there just to make sure there is nothing huge, major and insurmountable hidden.

You don’t call off the wedding when you find out your spouse (to be) burps after having a beer. Same thing here.

You gotta find the house before you do the inspection.
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