What Happens If a Home Inspection Fails?

Well, first things first, a home inspection never “passes” or “fails”. A home inspection is primarily an educational experience for you, the prospective home buyer, to understand your future home. A good home inspector will carefully walk you through all of the systems and structures of the home to provide insight into the condition of the systems, recommended maintenance, and right specialists to contact to maintain, repair or replace these systems.

Because you are going through the whole home, top-to-bottom, inside-out, many prospective home buyers find the process overwhelming. Take a deep breath, grab a notebook, ask questions to your home inspector, and know that this is normal. You want to know everything about such a major purchase. You definitely don’t want any surprises after a few years, months, or days after closing!

But what if something is seriously wrong?

I’m warning you: there is going to be something that comes up in the inspection that needs to be repaired or replaced. The question is “does the home still work for you, your budget, and your lifestyle?”. That is a question only you can answer because everyone has different levels of risk or projects they are willing to take on. Some questions to consider are: how soon does this repair need to occur? How much is it going to cost? How is the repair (or choosing not to repair it soon) going to impact my lifestyle? Are the answers to these questions something that I am comfortable with?

Going back to the sellers

If the home inspection identifies an issue not previously disclosed, you can often go back to the sellers to negotiate. Typically, negotiations take three forms:

1. Asking the sellers to repair the issue: You can ask the sellers to fix the issue before you close. Some sellers may be willing to allow you to pick the professional who will fix the issue. Depending on what repairs you are requesting, I strongly recommend having a professional inspect the repairs after they are completed. You don’t want to find out the hard way they weren’t done right!
2. Asking the sellers to contribute at closing: You can ask the sellers to contribute to your closing costs. This will give you extra cash on hand to fix issues yourself after you close.
3. Re-negotiate the purchase price: You can ask the sellers to renegotiate the purchase price to help cover the costs of the repairs. Assuming you are taking a loan out to cover the cost of the house, this can financially help you by lowering the dollar amount of your down payment and your monthly payment.

What if it is just too much work or the sellers won’t negotiate?
You can walk away. Check with a lawyer about potential consequences, but it is almost always a better idea to go with your gut instead of making a HUGE financial decision you aren’t comfortable with.