The inspection process during any transaction can be a challenge. Nevertheless, nit-picky inspectors and buyers who believe they should be purchasing a perfect home are lending new meaning to the phrase, “You’ve got to be kidding.”
If there was ever a reason for hiring a strong listing agent to represent you, negotiating through the inspection period is it.
We thought our house was in good shape. Needless to say, we were surprised to discover that both the physical inspector and a roof inspector called out hail damage on our roof. Unfortunately, that meant we had to pony up for the deductible for a roof replacement.
When we listed the house, I asked our broker to put a seller’s home warranty on our home when we first listed it. Why? You never know when a hot water heater can burst, the AC can go out, or some other major system will have an issue. In our case, there was a hairline crack in the seal on the garbage disposal. The good news was that we were out the cost of a service call and that’s it.
As sellers, we certainly couldn’t argue that these were legitimate issues. The next day, we received the “you’ve got to be kidding” list. This is the kind of situation that causes people to dig their heels in the ground and say, “No way.”
When I worked in Southern California, our company policy on inspections was to have the buyers take a credit for the work and have their own contractors complete it. Here’s an example that illustrates why.
Determining Culpability
I once had an attorney client who had a 6-month-old baby. The roof inspection came back with damaged shingles. The seller supposedly had a licensed roofer repair the damage. In the first big rain, the roof leaked right on the baby’s crib. Needless to say, everyone ended up in court.
The seller claimed that he had a licensed roofer handle the issue. The judge ruled that the seller was responsible for the damages. It was up to the seller to seek reimbursement from the roofer for the faulty work. If the buyer had been given a credit, she would have had her own roofer. The dispute would have been between the two of them rather than involving the seller and the brokers.
In our inspection, I wanted to use the same approach – write a check and make it go away. No chance. The buyers wanted the repairs done.
It’s no secret that when there are multiple offers on a property, the buyers will often do what is necessary to win the property and then use the inspections to work the seller’s price back down. Savvy listing agents have figured out it’s wise to give the buyers time to inspect the property and then have them come in with an offer without an inspection contingency.
The challenge is that many buyers are demanding that the properties are like new. (If they had ever built a new house, they would know that “new” means a year of uncovering all the things that weren’t done properly during construction.) In fact, one broker friend told me her buyers wanted everything in a 150-year-old house to be perfect. Another told me that the buyer’s estimate to add a shower to an existing bath was $140,000. They both confirmed what we had experienced – the inspectors are nit-picking to show their value and not doing a very good job of explaining what is a legitimate repair, what is preventative and what is simply outrageous.
When all is said and done, it comes back to having a strong, competent broker on your side. We took care of the caulking, replaced the two missing screws in the attic ladder, sent the buyers a picture of the electrical panels and tightened the kitchen faucet. Our broker explained to the other agent and her clients what was preventative and not required. She helped keep us at the negotiation table until we worked out our issues. If she hadn’t done her job, we could have lost the deal or paid thousands of dollars in unnecessary inspection related work.
