How to Navigate the Home Inspection Process + Maximize a Buyer’s Return

The white hot-market this past spring in Northern Virginia was pay dirt for sellers.  It was a different story for buyers.  To compete and “win”, they had to waive every which contingency.  Most importantly, buyers often found themselves waiving the all-important home inspection contingency.  Flying blind into a new home is far from ideal.  Thankfully, the housing market here in Northern Virginia has re-balanced a bit – at least for now – and buyers are now generally able to maintain their home inspection rights.  

Here, I explore how best to navigate the home inspection process and maximize the return on a buyer’s home inspection.

Who should you choose to inspect your future home?

Any good realtor will have a stable of home inspectors with whom they work regularly. The inspectors I recommend either have a contractor background/skillset or are highly trained in best practices in Virginia home inspections.  Over time I’ve winnowed my top inspectors to two that I know to be assiduous, detail-oriented, patient and to generate home inspection reports in a timely manner (which can be important if under a tight deadline, often typical in a competitive market like this). The inspectors with whom I work don’t shy away from problems.  That’s what you want when getting under the hood of your future home!

What should a buyer do during the home inspection?

Home inspections usually take 2-4 hours, depending on square footage and condition.  That’s time you’ll want to spend at the house, being an active participant in the home inspection. During that time, I always recommend my clients follow along with the inspector, learning about the operation of the home while also seeing how the inspector identifies repair concerns.  Knowing the location of the main water shut-off valve, how to change the HVAC filter and where the exterior hose bib shut-offs, to name a few, can be just as important as learning that there’s a leak in the sink.  Being an engaged participant also benefits buyers when reviewing the home inspection report that is the basis for repair or credit requests to a seller. 

How to prioritize home inspection repair items

Buyer clients usually ask me how to tell if a home inspection is “good”. It’s one of the few instances where I say you should judge a book by its length.  An inspection report of 30-50 pages is generally “good”, unless there are items listed that are significant (e.g., structural foundation issues).  I consider a report of that length equivalent to a B+ give or take. At the same time, remember that a home inspector is only as good as what his/her nose, eyes and ears can detect at the time of the inspection itself.  There will be issues an inspector will miss. A buyer should always go into the home inspection with that understanding and expectation.

To repair or get a seller credit, that is the question

Once a buyer has the report in hand, they find themselves at a decision-making crossroads.  To either void the contract on the report’s basis OR ask for seller paid repairs or a credit.  There are pros and cons to each of those latter options.  

If a seller is taking on repairs, they are both paying for them as well as handling all of the logistics of contractor selection, oversight and work completion.  There may be value of that to a buyer – i.e., less hassle, allows for a move-in with repairs completed.  A seller’s commitment to repair completion also binds them to whatever contingencies relate to a given repair.  This can be useful.  The downside of seller repairs is, of course, that sellers tend to be cost-conscious when facing repair costs and may be incentivized to select the lowest-cost contractor.  The old adage “you get what you pay for” is often true.  Hence you may want to avoid the situation where the repairs are completed, but to a minimal extent and to a poor standard. 

When it comes to a seller credit for repairs, the upside is a buyer can offset closing costs with that credit and reduce the cash they need to bring “to the closing table.”  This can be helpful for those buyers that are low on funds and comfortable deferring their completion of repairs to a later date.  That’s not always possible, though, if the nature of the repairs is such that an immediate repair is merited.  The con of a seller credit is the risk of underestimating the cost of repairs.  In that instance, a buyer finds themselves with a credit that is insufficient to cover the actual cost of repairs.  This is a real risk.  Especially when you consider that it’s generally not possible for a buyer to bring in contractors to provide specific estimates – that would, in turn, be the basis for a requested credit amount.

How to verify repair completion

In Virginia, sellers are required to provide a buyer with copies of paid contractor invoices for work completed.  Those invoices should be given before a buyer’s walk-through.  This not only allows a buyer to verify completion of the agreed-upon work but can also serve as a guide for checking through repairs during the walk-through.  They also detail the exact work completed that buyers will double-check during the walk-through.  In all honesty, some contractor repairs cannot easily be verified by a realtor and/or buyer.  Realtors typically don’t have the equipment to get up into an attic or to verify that electrical work has been completed as promised.  Ultimately a buyer needs to trust in the professionalism of the licensed contractors that complete the work and provide invoices to that effect.

I hope these tips are useful to you as you embark on your home purchase adventure.  Please be in touch if you’d like to discuss the home inspection process in more detail.

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