Whether you are purchasing or selling your home, a lot hinges on the home inspection results. However, knowing what is required to be fixed and who pays for those fixes is much less clear. A 4-point home inspection covers four major systems in your home: HVAC, roof, plumbing, and electrical. The results of this inspection can be the breaking point for prospective buyers. The question is, what are you required to fix?
What Fixes Are Required After a 4-Point Home Inspection?
The first thing you need to know is what a 4-point home inspection is, what it covers, and how repairs are decided. The 4-point inspection is an analysis of the health of the home. It is going to be performed by an unbiased licensed professional and is often required in older homes. Your inspector will examine the heating, ventilation, A/C, wiring, electrical panels, hot water heater, water damage, roof covering, and roof shingles.
The short answer is that there are no mandatory fixes after your 4-point home inspection. The longer answer is that while there are no mandatory repairs from a legal standpoint, sellers cannot dismiss home inspections, refuse to pay for repairs, and still expect the sale to go through. If there are issues with these main systems, many buyers will request that repairs be conducted.
What Do I Have To Fix?
Your home inspection report is not a comprehensive to-do list that requires you to act on every bullet point. Nevertheless, your home inspector may discover many things that they believe could be improved. These things fall into three categories: things that, according to the inspector, have to be fixed; things that aren’t required; and things that may or may not need to be repaired.
Common Required Fixes
There are some repairs that lenders may require prior to releasing funds to finance a home purchase. These repairs generally include structural defects, safety issues, and code violations. These often include the attic, crawl spaces, basements, chimneys, and furnaces. Other repairs that the inspector may deem more necessary include issues with the roof, electrical systems, the HVAC system, and plumbing.
More often than not, if the 4-point home inspection uncovers issues with these main systems, you are going to be responsible for getting them fixed. There are two ways to go about fixing them. First, get a bid from contractors, then you can either fix the problems or offer the buyers credit so they can fix the issues themselves.
Fixes That Lenders Often Require
As mentioned above, some lenders will have a specific list of required repairs, ensuring that the home appraises for specific amounts prior to finalizing financing. These often include:
- Water damage and mold
- Electrical hazards
- Fire hazards
- Structural hazards
- Building code violations
- Faulty plumbing
- Faulty electrical
- Faulty HVAC
- Pest infestations
- Roofing that needs immediate replacement
- Foundation issues
- Lead-based paint
This is not a comprehensive list, and lenders can require many other fixes. However, it is good to know in advance what things lenders may require you to fix before they are willing to finalize a financed purchase.
Fixes That Aren’t Required
Thankfully, you don’t have to fix everything that crops up on your home inspection report. Repairs that you usually will not have to cover include normal wear and tear in the home as well as cosmetic issues. This means that while the inspector may note that there are dings in the kitchen cabinets, the purchaser cannot usually demand that you fix them.
This is where your inspection contract is very important. First, check your local ordinances to know what issues legally fall under the seller’s responsibility. Then, read your inspection contract and ensure that it doesn’t state that you are required to fix the cosmetic problems and that the buyers may only request repairs for structural defects, safety concerns, and building code violations.
Fixes That Are Negotiable
There’s a grey area between fixes that are and are not required. In addition, gray fixes tend to shift with the market. You might have more power if you are in a seller’s market. However, if you are in a buyer’s market, you may be instigating more repairs than you thought you would. It is always advised that a buyer conducts a home inspection. However, buyers can waive their right to ask a seller to perform repairs.
The best contract a seller could dream of is for a buyer to purchase the home “as is” or request an “information-only” inspection. This ensures that the seller doesn’t have to pay for fixes discovered during the inspection. Typically, you aren’t going to be able to draw a hard and fast line regarding the inspection. However, your real estate agent is going to know what you should agree to fix and where you might want to negotiate.
Fixes Often Requested by the Buyer
Buyers often make requests that go beyond the essential repairs we have already mentioned. Most buyers want to move in as quickly as possible and don’t want a hefty list of repairs that have to be finished before they can live there. Here is a list of items that buyers request most often:
Major appliances that aren’t working affect the livability of your home. As a result, buyers will often request that nonworking appliances be repaired and sometimes even replaced. This could mean fixing a leaking dishwasher, a dryer that doesn’t heat, or a garbage disposal that is non-functioning.
2. Windows and Doors
Another repair that is often requested will be broken or rotting seals around the door and windows in the home. This will affect the heating and cooling costs of the home, and many buyers want them taken care of before they move in.
GFCI outlets are required in wet areas and on the home’s exterior. In older homes, it is common to have outdated wiring and electrical panels. However, these can be flagged as potential fire and safety hazards. Buyers want to feel safe in their homes and will often request electrical repairs.
Other areas where buyers may make repair requests are slow drains, poor water pressure, and old water heaters. Water heaters have a limited lifespan, and buyers may ask for a replacement if it is nearing the end of its lifespan.
Buyers also get hung up on the condition of the roof. If there is damage, such as soft spots, damaged flashing, issues with the gutters, or missing shingles, they may want them fixed before they purchase the home. Again, not talking about cosmetic issues but problems that could cause damage down the line if not corrected in a timely manner.
Should You Argue Against a Repair?
If a buyer sends in a request for an unreasonable repair, then by all means, yes. However, remember that you have already put a lot of work and effort into the selling process. Be reasonable when it comes to repairs. It may benefit you to accommodate some of the repairs rather than letting a buyer walk away from the deal.
Another thing to remember, even if you cannot come to an agreement with the purchaser over a repair, is that the issue isn’t going to go away. Once a home inspector has uncovered it, you are going to have to disclose the problem to each potential buyer.
Gray area repairs are something that needs to be negotiated between the buyer and the seller. However, there are at least two ways to help smooth the way during negotiations. The first is by offering a home warranty. A $500 one-year home warranty can ease concerns about things that have been discovered during a 4-point home inspection.
Another way to help smooth out negotiations is to barter. Large appliances, such as the refrigerator, washing machine, and dryer, can sometimes be used to get buyers to ignore certain fixes. Make sure that you wait until after everyone has the report from the inspector before you offer any of the appliances. While home inspections often turn up many different kinds of issues, most of them can be addressed quickly, leaving both parties quite happy.
Who Pays for the Repairs?
The answer of who pays for repairs is a little ambiguous. It depends on several things. First, while a seller does not have a legally mandated list of repairs, there are some repairs that a buyer’s lender will require the seller to conduct in order to continue with financing. However, beyond that, it’s up to the buyer and seller to negotiate terms of repairs or to come up with concessions so that they can come to a final agreement.
Home inspections and repairs are a necessary part of the home buying and selling process. Don’t forget that you need an unbiased third party to complete the inspection. Speak to your real estate agent and let them help you through the inspection, negotiations, and repairs. Contact Frontline Inspections to inquire about our services, including 4-point home and advanced pool inspections today.