The Home Inspection Hurdle – It Can Make Or Break The Deal
December 29th, 2009 | categories: Buying Real Estate in Coconut Grove
I have had 3 deals within the past month fall apart after my buyers did their home inspections of the property. Just to clarify, this is AFTER the sellers and buyers agreed on a sales price. Most home sale contracts in South Florida are “as is”, meaning that the buyer purchases the property “as is” and the seller is not required to fix anything wrong with the home. The buyer then has an inspection period after the contract is signed and they are allowed to cancel the contract based on the outcome of that inspection.
That being said, once the inspection report is given to the buyer they can try to renegotiate the sales price of the home with the seller for the repairs. I would say that this happens 75% of the time. I recently closed on a house where the buyer and seller split the repairs 50/50.
But some reports that come back are so frightening to the buyers that it sends them running in the other direction. This has happened to 3 of my clients in the past month. The first buyer had severe allergies to mold and the inspector told her that although the mold report came back negative there had been some leaky pipes in the walls and the roof was leaking. Even after the seller offered to put in an entire new roof, the buyer was still not interested. Her allergies were too sensitive and she couldn’t risk the possibility of being allergic to her own home.
The second buyers fell in love with a property in a gated community but when they found out that the roof needed replaced (potentially $25,000), one of the two septic tanks needed replaced (potentially $5,000) and the house had mold issues, they decided that it was just too much of a project than they were willing to take on. They weren’t even interested in re-negotiating the contract and cancelled it today.
My last clients didn’t even wait until the inspection report came back. They attended the inspection this morning and pretty much went running out of the house when they heard the issues brought up by the inspector (the house was being held up by cracked concrete blocks and the inspector said it was the worst he had ever seen). We are drawing up the cancellation of contract as we speak.
Lately appraisals have been the biggest hurdle that buyers and sellers face during their real estate transaction, but the past few days prove that home inspections can certainly make or break a deal as well.