A vector illustration of home inspector in front of a house

Selling a home doesn’t have to be a bad experience. Most home purchase contracts make the sale contingent on two items, the appraisal and the dreaded home inspection. The appraisal shouldn’t be a problem, home inspections on the other hand can produce some anxiety. Find out how to avoid FSBO home inspection worries.

You’ve done all the hard work getting your house ready to put on the market, you’ve taken time to price it correctly and now it’s time to sell it. You’ve had several showings, a few offers, and you’ve chosen one
of those offers to work with. And now you have a contract. Your buyer does his inspections, as is his right, and he brings you a great, big, long list of things that he wants you to fix. 80% of the things on that list are small, inconsequential items that show up on every inspection report and should be expected.

In this post, we’re going to talk about the home inspection process, how it affects you as a For Sale By Owner and what you can do to protect yourself.

Home Inspection Contract Contingency

Most real estate contracts come with a home inspection contract contingency.. What that clause says is that once you’re in contract your buyer has a right to do any inspections that he wants to. These contracts are contingent on successful inspections. If they find problems with the house, they can ask you to fix those problems, but you’re not required too. You don’t have to. By the buyer asking you to do it, and you refusing, the buyer can back out of the contract and have earnest money returned. Sometimes a buyer will use the inspection period to try and renegotiate the contract. That’s what you want to avoid up front.

The home inspection is a important and necessary part of the home buying process. Problems arise when buyers misuse the process and use it to take advantage of a seller. Inspections were designed to find major problems in a house, not little piddly items that should be expected. {Some real estate agents and home buyers try and use the inspection process to renegotiate price.}

For example when a home inspection turns up a roof with hail damage. That’s a problem that needs to be addressed because you can’t buy a house with a bad roof. If the seller refuses to replace the roof that’s a good reason to want out of the deal. It could be foundation problems or a broken sewer or some safety issue like the presence of mold. You get the idea. Major problems.

What we’re going to concentrate on here is to learn to keep the buyer from asking you for a bunch of little things that really don’t matter and/or are insignificant. They can end up costing you money. So basically the inspection report and the repair process are another negotiation between you and the buyer. He wants you to fix things that cost you money and you don’t want to do it because it costs you money.

Protect Yourself and Save Money

There are several ways to protect yourself against radical repair requests during the home inspection that buyers can come up with. You also want to prevent any contract renegotiating fantasies.

As Is Where Is

One way, and especially in a market like this, which is a really intense seller’s market in Spring 2021, is you can simply put your house on the market as is where is. That’s probably not the best way but it is an option. I personally would never recommend one of my clients purchase an as is where is because they are left with absolutely no protection if there is a big problem. It makes buyers really leery about buying the house because if the house does have a bad roof the buyer is stuck with it.

Foreclosures are often as is where is.

Seller Will Do No Repairs

Another thing to do is to write into the contract seller will do no repairs or seller is not able to do repairs. That’s my favorite. This is letting your buyer know up front you’re not doing repairs but the buyer is still protected if there is a major problem. It leaves in a part of the contract that says that, if the buyer finds something
major wrong with the house and the seller won’t fix it he can back out of the contract and get his earnest money back. There’s also the finance contingency clause present in real estate contracts. If a house is so messed up it can’t get insured than a buyer can’t get financing. He can back out of the contract and get his earnest money back.

We have a clause in our contract in Kansas like that and most other states do as well. You have to check your individual contract and see exactly what it says.

So what you’re doing there is you’re preventing the buyer from asking you for a bunch of little insignificant repairs, but he still has an open to get out of the contract in case they do find a bad roof or a bad foundation or something
seriously wrong with the house that you’re not willing to fix. It’s a win win. The buyer can still use the inspection process for what it was intended and you don’t get cornered into spending a lot of extra money.

What You See Is What You Get

There’s another clause in our contract reads the buyer made an offer on this house
after looking it over and knowing of the defects of it or defects that he reasonably should have been able to know
. That’s an important clause for one reason. If it’s an obvious noticeable defect a buyer shouldn’t be asking for a repair unless done upfront in the original offer at the risk of losing earnest money.

I use that clause for sellers often. When I get a ridiculous repair request, I’ll go through it and if there are items that were obvious and I feel they should have noticed in the original showing I’ll call it out. When my seller refuses to fix those obvious items I’ll send along that part of the contract highlighted to remind the buyer of what he signed.

Pre-Inspection

Adding value to a for sale by owner

Another thing you can do, which sellers rarely do, is a pre-inspection. A home pre-inspection prior to putting your house on the market is a great idea and can save you money. You simply hire a home inspection company to inspect your house. Once the inspection is complete the inspector will write you a report. Repair or fix anything major. By getting these repairs done before hand you have the control of how and who does them.

When you have an offer on your house give the potential buyer the inspection report. Any information about what has been repaired, if anything, the buyer now knows. The beauty of that is you have now disclosed all known defects. If you hire a decent inspector it should cover everything. The buyer doesn’t have the right to ask for any of those things to be repaired during the inspection period. You have no surprises.

Some of the common problems that come up
on these inspection reports:

  • Poor drainage around the foundation.
  • Loose toilet.
  • Gutters need cleaning.
  • GFCI needed in kitchen, bathroom, garage or exterior.
  • Doors drag on carpet.
  • Leaky plumbing.

These are just a few things that come up on inspection reports easily taken care of up front. Sometimes there are more serious problems:

  • Hail damaged roof.
  • Sewer problems.
  • Foundation issues.
  • Electrical fire hazards.

With more serious issues that come up you still have the opportunity to decide how to take care them rather than letting the buyer make that choice. That will save you money, sometimes substantially. You also eliminate the anxiety
associated with the inspection period.

I Do It

These are all effective ways of preventing unnecessary spending and anxiety around the inspections. I use the methods effectively when I’m selling a house for someone.

Which method you decide to use depends on what type of market your in. If it’s a sellers market like it is right now in 2021 you can simply say you’re not doing any repairs. Your house will sell, as long as it’s priced right and looks good.

If your in a buyers market where buyers rule then the pre inspection is a better idea.

Either way the repair process can end up costing you a lot of money, headaches and possibly a contract cancelation. This is how you avoid that.

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