Manage Inspections

Step 9: Handle buyer inspections and appraisals

The Critical Inspection Period

The inspection period is when deals often fall apart or get renegotiated. About 25% of sales have issues during inspection, but with proper preparation and realistic expectations, most can be resolved. Your goal is to address legitimate concerns while protecting your interests.

Day 1-3

Schedule Inspections

Buyer arranges general, specialized, and pest inspections

Day 4-7

Inspections Completed

Inspector examines all systems and provides detailed report

Day 8-10

Review & Negotiate

Buyer requests repairs or credits based on findings

Types of Inspections

Understand what each inspection covers and potential issues that may arise.

๐Ÿ  General Home Inspection

Covers:
  • Structural components and foundation
  • Electrical, plumbing, and HVAC systems
  • Roof, windows, and exterior
  • Interior walls, floors, and ceilings
  • Insulation and ventilation
Cost: $300-500 (buyer pays)
Duration: 2-4 hours

๐Ÿ”Œ Specialized Inspections

May Include:
  • Pest/termite inspection
  • Radon testing
  • Mold inspection
  • Pool/spa inspection
  • Septic system inspection
Cost: $100-400 each
Duration: 1-2 hours each

๐Ÿ’ฐ Appraisal

Purpose:
  • Verify home value for lender
  • Compare to recent sales
  • Assess condition and features
  • Ensure loan amount is justified
Cost: $400-600 (buyer/lender pays)
Duration: 1-2 hours

Preparing for Inspections

Proper preparation can prevent surprises and demonstrate your home's good condition.

Before Inspector Arrives

๐Ÿ”‘

Access Everything

Unlock all areas, clear paths to electrical panels, water heater, HVAC units

๐Ÿงน

Clean Key Areas

Basement, crawl spaces, attic, and utility areas should be accessible and clean

๐Ÿ’ก

Test All Systems

Ensure lights, outlets, faucets, and appliances are working properly

๐Ÿ“‹

Gather Documentation

Receipts for recent repairs, warranties, maintenance records

During the Inspection

๐Ÿšช

Give Space

Leave the property during inspection to avoid influencing the process

๐Ÿ•

Secure Pets

Remove or safely contain all animals during inspection

๐Ÿ“ฑ

Stay Available

Be reachable by phone in case inspector needs access or has questions

Common Inspection Issues

Know what inspectors typically find and how to address each category of concern.

๐ŸŸข Minor Issues (Usually Acceptable)

Cosmetic Problems: Scuff marks, minor paint touch-ups, worn caulk
Normal Wear: Carpet wear, minor drywall cracks, weathered deck stain
Maintenance Items: Dirty furnace filter, loose handrail, missing outlet cover
Strategy: Address inexpensive items, document normal wear and tear

๐ŸŸก Moderate Issues (Negotiate)

System Repairs: HVAC tune-up needed, minor plumbing leaks, electrical updates
Exterior Issues: Roof repairs, gutter replacement, window seal problems
Safety Concerns: GFCI outlets needed, smoke detector batteries, handrail repairs
Strategy: Get repair quotes, negotiate credits or repairs

๐Ÿ”ด Major Issues (Serious Negotiation)

Structural Problems: Foundation cracks, roof replacement, major electrical rewiring
System Failures: HVAC replacement, water heater failure, plumbing re-pipe
Environmental Issues: Mold, asbestos, lead paint, radon levels
Strategy: Get professional estimates, consider significant price adjustments

Responding to Inspection Reports

Your response strategy can make or break the deal. Balance fairness with protecting your interests.

Option 1: Make Repairs

Pros:
  • Maintains sale price
  • Shows good faith
  • Eliminates buyer concerns
Cons:
  • Time and hassle to coordinate
  • Quality control challenges
  • Potential for additional issues
Best For: Safety issues, items under $1,000, when you have trusted contractors

Option 2: Offer Credit

Pros:
  • Faster resolution
  • Buyer controls repair quality
  • No coordination headaches
Cons:
  • Reduces your net proceeds
  • May exceed actual repair costs
  • Buyer may not make repairs
Best For: Cosmetic issues, items over $1,000, when timing is tight

Option 3: Reduce Price

Pros:
  • Simple negotiation
  • Helps with appraisal issues
  • Clean transaction
Cons:
  • Directly reduces proceeds
  • May affect future appraisals
  • Sets precedent for more requests
Best For: Major issues, multiple problems, when market is soft

Appraisal Management

The appraisal must support your contract price for the buyer's loan approval.

Before Appraisal

  • Prepare Comp List: Provide recent sales data to support your price
  • Highlight Upgrades: List recent improvements and their costs
  • Clean & Stage: Ensure home shows well for appraiser visit
  • Be Available: Answer questions about home features and improvements

If Appraisal Comes in Low

Challenge the Appraisal

Provide additional comps and documentation to support higher value

Negotiate with Buyer

Split the difference or ask buyer to pay gap in cash

Reduce Price

Lower contract price to match appraised value

Cancel Contract

If gap is too large, allow buyer to walk away

Ready for the Next Step?

With inspections and appraisals complete, you're ready for the final step - closing day and transferring ownership to the buyer.