Home Inspections Up Close, Part Two

Collaboration: What Every Buyer and Seller Should Consider

In last month’s Palisadian-Post Real Estate News & Views section, I described the many types of home inspections, their general costs and benefits to homebuyers. Though buyers and sellers enter a contract with different goals, their agents can encourage collaboration between the parties to benefit all. So what are the key inspection takeaways for both buyer and seller?

The purpose of home inspections is to educate buyers on the condition of a property, and to provide a complete sense of the structural details that may otherwise be a mystery. Proper inspections serve three major purposes:

Reveal health and/or safety hazards

Identify inoperative or defective systems or repair needs

Provide a general sense of the ongoing maintenance and future repairs for the incoming homeowner.

The most common point of negotiations comes as a result of inspections – and this leads to natural conflicts between buyers and sellers. Sellers may have lived on a property for some time without feeling bothered by or even aware of its flaws.

When an inspection reveals concerns, some sellers simply don’t share the buyer’s and inspector’s perspective or don’t care to deal with repairs. Buyers, on the other hand, are often surprised by inspection findings and want issues ameliorated.

Collaboration is Key

For best results on both sides of the transaction, buyers and sellers should be willing to work with each other and their agents on issues raised by an inspection.

Buyers have the right to ask sellers to compensate them for matters revealed in the process, though negotiation room can be hindered by the current predominance of backup offers. That being said, a wise seller with backup buyers will still work with and benefit from “the bird in hand.”

Inspection Tips for Sellers

Sellers should approach the inspection process understanding that even very sincere buyers will probably find unexpected surprises and, especially if an occupant’s health or safety could be at risk, sellers should make a good-faith effort to rectify the situation.

When buyers ask for a price reduction or repairs based on inspection findings, sellers will do well to not take the request personally. Giving or doing something is good business and fosters a “win-win” tone to the transaction, resulting in decreased liability after the sale.

It’s true that sellers often react emotionally to requests for improvements or repairs – since their home has been an intimate part of their own history. Focusing on the dollar amount of the improvement or credit from a business perspective, or asking “what will it take to have this buyer assume full responsibility of ownership” can end a transaction on an amicable note.

The “as is” nature of the transaction is thus reinforced and negative repercussions to the seller following the close of escrow greatly diminished.

If work must be done as a result of the negotiation, buyers and sellers sometimes opt for an agreed-upon contractor to avoid reliance on the seller for a warranty. Credits or price reductions provide a better choice to satisfy the buyer that he/she can do the work themselves, to their satisfaction, while protecting the seller from work done in a fashion that might not satisfy the buyer.

Inspection Tips for Buyers

Buyers should be ready for the inspector to note some real flaws while expecting a realistic projection of the ongoing maintenance and repair costs to anticipate in home ownership. The process is meant to make sure buyers know what they are getting into, so a few repairs or projected improvements are much less of a concern than a major, ongoing structural deficiency.

Overall, buyers and sellers should have faith that the other is not out to be unscrupulous or difficult. Buyers and sellers definitely have very different interests, so their responses to inspection issues are also very relative to their own situations. A good agent can be relied on to help each party focus on collaboration.

Fortunately, any reliable agent will have excellent relationships with professional inspectors. Buyers and sellers can depend on their agent to supervise the majority of the inspection process. Expert agents foster appropriate business etiquette and promote advocacy for each party, enabling buyers and sellers to be pleased in the end with their purchase or sales process.

Betty-Jo Tilley is a luxury property specialist at Berkshire Hathaway Home Services in Pacific Palisades and can be reached at (310) 429-9833 and bettyjo@bettyjotilley.com. Her insights are intended to inspire strategic thinking and mutually beneficial collaboration between seller and agent, not to provide legal or financial advice.