So you’ve put your home on the market and agreed a sale within a couple of weeks at a price that you are very satisfied with. The buyers are obviously well-qualified for the loan they need and you can tell they really love your home. But the contract allows for a 10-day inspection contingency. How much should you be concerned about that?
A lot will depend on how much you know about the condition of your home. When you completed the required disclosure forms, your agent will have advised you to answer all questions regarding condition etc. in as much detail as you can. Since the buyers have hopefully read the disclosures before making their offer, they should have taken everything mentioned into consideration.
The problem, of course, is that nobody knows all there is to know about the condition of their home. When was the last time you went into the crawl space for example? Probably never in the case of most people. And what would you look for when you were down there?
That is why home inspections are so important. Ideally, you should have a home inspection (and a termite inspection) before your home goes on the market. This will be fully disclosed of course and inspection reports made available to potential buyers. You should really fix any major items that arise, particularly anything structural or safety related and all Section 1 termite repairs. These are those requiring immediate attention. Much better to do all that before a sale has been agreed for a variety of reasons.
Even though you may have done all this, the buyers may well decide to have their own home and termite inspections. And perhaps a chimney inspection and a roof inspection. There are many other possibilities too, such as electrical, HVAC, drainage, sewer lateral and structural inspection.
Should this concern you? Not necessarily. If you had the pre-listing inspections mentioned above carried out by local inspectors with good reputations, you already know more about the condition of your home than most sellers.
When the buyers have completed their inspections, depending on the seriousness of any new issues that have been discovered, they will most likely raise a “Request for Repairs” asking you to either fix these items or give them a credit in lieu of repairs. This may then become a matter of negotiation between buyer and seller but remember that if you can’t reach agreement, the buyer can cancel the contract and get their earnest money deposit returned in full.
Hopefully this won’t happen though. The buyer most likely still really wants the home and they may have invested considerable time and money in inspections. From your point of view, you really don’t want the home back on the market as you then have to disclose all inspection reports and accept the fact that you may have to ultimately accept a much lower price.
How often do home inspections kill deals? Perhaps surprisingly, very rarely. A transaction is far more likely to fall apart because of financing or appraisal issues.