Home Inspection Report & Negotiated Repairs Tips

A home inspection in some cases can make or break a real estate transaction.  When buyers review an inspection report, they can go into panic mode once they see the itemized list of noted repairs.  It is critical that real estate agent’s breakdown the report and explain the differences between major and minor repairs and what recommended repairs to zero in on.  

Purpose of a Home Inspection. It is highly recommended that a home buyer gets a home inspection during the Due Diligence period.  The Due Diligence period is usually between 7 to 14 days and can be extended if more time is needed to fully inspect property or availability of inspectors.  This allows the buyer to get an in-depth inspection report by a certified inspector.   The inspection report is a detailed report of repair items and will assist buyers in determining if they will move forward with the purchase or walk away.   

What is a home inspection?  A home inspection provides the buyer with a detailed report with pictures of structural components, such as the foundation, floors, walls, ceilings, doors, windows, and roofing, as well as the electrical equipment, plumbing, heating and air conditioning units, and built-in kitchen appliances. It helps the buyer to determine if certain repairs are needed to avoid costly problems after purchasing the home.  The real estate agent will complete a Due Diligence Request and Agreement (DDRA) with requested repairs from the inspection report to present to the seller through the buyer’s agent to negotiate repairs.   

Negotiations.  The buyer and seller will negotiate on repairs and come to an agreement.  In some circumstances, the seller will offer a seller concession to cover agreed upon repairs or elect to lower the sales price of home.  If the buyer determines that the repairs are too costly and negotiations fall through, the buyer has the option to walk away from the sale.  If the buyer walks away, buyer will forfeit any Due Diligence money paid to the seller.  Due Diligence fee is money paid to the seller for taking the home off the market while home was pending and / or under contract.  

Buyers should understand that sellers are “not” required to make any home repairs except for repair items listed in an appraisal report.    

Due Diligence Fee.  A negotiated amount, if any, paid by Buyer to Seller with this Contract for Buyer’s right to terminate the Contract for any reason or no reason during the Due Diligence Period. It shall be the property of Seller upon the Effective Date and shall be a credit to Buyer at Closing. The Due Diligence Fee shall be non-refundable except in the event of a material breach of this Contract by Seller, or if this Contract is terminated under or as otherwise provided in any addendum hereto.  

Reviewing Inspection Report.  Don’t let the initial review of your home inspection report scare you when you see an itemized list of 20 to 30 items.  You will find that most of the repairs identified are minor repairs or fixes. When reviewing the report, focus on major items first, then note important items that would make you walk away from the contract.  There may be items in the inspection report the inspector is not certified to evaluate and will recommend these items be further evaluated by a General Contractor or Licensed HVAC Technician if an issue is observed.  For example, an inspector can only evaluate if a HVAC cools or heats at a set temperature, if not, the inspector will recommend that the unit be further evaluated by a qualified licensed HVAC Technician.  Real estate agents can assist you in determining which repairs to present to the seller and will draft a Due Diligence Request and Agreement (DDRA) with noted repairs.  A copy of the home inspection report should be presented with the DDRA to the seller.  

When reviewing the inspection report, break it down into three sections:  

  1. Major, glaring defects that will be extremely expensive to repair
  2. Issues that are not overly costly but also not cheap 
  3. Small, insignificant items that are not of immediate importance 

Repair Estimates.  Real estate agent should have names of General Contractors and HVAC Technicians that can provide estimates for repair items presented in the Due Diligence Request and Agreement.  Seller may elect to give a seller concession or credit for the agreed upon repairs based off estimates.  

Repairs. Once repairs are negotiated between buyer and seller, repairs should be completed by a General Contractor or licensed Technician (major items) and the seller’s agent should provide proof of completed repairs.  Repairs should be completed prior to the final walkthrough inspection and closing to verify all repairs have been completed.   

  • A Walk-Through Inspection is the inspection of the property just before closing to ensure it is still in the same condition, no new damage has been done, and all fixtures included in the sale are still present. 

Walkthrough Inspection Checklist: 

  • Inspect negotiated repairs from Due Diligence Request and Agreement to verify repairs are completed. 
  • Turn on and off every light fixture. 
  • Run water and check for leaks under sinks. 
  • Test all appliances. 
  • Check garage door openers. 
  • Open and close all doors. 
  • Flush toilets. 
  • Inspect ceilings, walls, and floors. 
  • Run the garbage disposal and exhaust fans. 
  • Test the heating and air conditioning. 
  • Open and close windows. 
  • Make sure all debris is removed from the home. 
  • Check windows and screens are mounted.