April 29, 2019
Whether you’re a rookie agent, a rising team leader or an established veteran broker, we can all benefit from sharpening our skills. Follow our “Back to Basics” series to learn fundamental strategies, tactics, philosophies and more from real estate pros across the industry.
Your clients have finally found the property that has them ready to “say yes to the address,” and have begun working toward making their dreams a reality — but back comes the home inspection report, perhaps filled with surprises or unexpected items to repair. Whether your buyers are first-timers or seasoned homebuyers, it’s important to keep the process as smooth and stress-free as possible for clients.
Having these three tips handy when you receive the written inspection report will help you guide your buyers through the process and help them make an informed decision about how to move forward.
1. Take a time-out to understand the inspector’s findings
The home inspection can be among the most stressful points in the home purchase process. There’s no telling what may be found just under the surface (or siding, sheathing, and shingles, if you want to be precise). That seemingly perfect piece of property could potentially have a plethora of problems and possible pitfalls.
While time is always of the essence at this mile marker, give your clients some room to breathe and digest the findings. Be open to answering any questions they might have, and help them navigate the nuances of their future home’s bill of health. With a good amount of money about to be spent, it’s important to ensure your clients understand time restraints but don’t feel pressured or rushed to make a decision, no matter what the report may contain.
Having said that, it’s critical you play an active role in guiding the process of comprehending the inspection findings and what your buyer’s option may be. It can be easy for homebuyers to lose sight of the forest for the trees when culling through the various actionable items documented by the inspector.
2. Identify and prioritize items of concern
Your clients might be inclined to see the findings in absolute terms. Help them sort through everything and categorize the items of highest priority from those parts that can be done at a future date to be determined.
Today’s more sophisticated and professional inspection companies provide tools that allow consumers and real estate professionals to go item by item through the summary of the inspection report and create a list of items to request be repaired or negotiated.
Small items, such as caulking, replacing windows or doors and redirecting downspouts might seem like big issues when considered in their sum but are considered maintenance items, not major deficiencies.
While important, items of this nature are easy do-it-yourself (DIY) projects that new homeowners can tackle themselves. Remember, the best home inspectors will identify things buyers can do to maintain their home, as well as identify material defects. As such, anticipate the report to reflect issues at the smaller end of the spectrum.
Maintaining focus on the areas of immediate concern to your buyers is vital. Environmental concerns, wood-destroying insect infestations or private sewer issues are examples of crucial issues — but beyond that, it’s generally up to the buyer what issues are issues to them. It’s also important to consider the deal and market factors: If the home is being sold “as is,” or if inventory is low, buyers might have to accept certain issues or decide the home is simply not for them.
3. Build a plan of action
Once items of immediate concern have been identified, it’s time to put together an action-response plan. This area can be tricky, but the experience and advice of a skilled real estate professional is invaluable in this aspect.
Buyer’s can be tempted to ask for more fixes than are absolutely needed as a negotiation tactic, but caution should be exercised when generating a repair list of actionable items for the seller. Market conditions and the structure of the deal itself must be considered. Asking for too few of the crucial fixes can put the buyers at a disadvantage after closing; ask for too many, however, and the seller might decide to walk away from the deal.
How the clients ultimately opt to proceed at this point can be significantly influenced by the willingness and cooperation of the selling party. A motivated seller might be more willing to address issues prior to closing but will likely want to keep their involvement at a minimum. They’re looking toward their next home and won’t want to be tied into repairs any longer than necessary.
An alternative to insisting upon repairs is to request concessions in the home price to allow time to interview and hire the repair professionals after the close — many buyers opt to pursue this route, as they are afforded control of the quality of work they may not have otherwise.