Who Pays for Repairs After a Home Inspection?

You’ve found your dream home, made an offer, and had it accepted. Then you get the home inspection report, and there are some glaring problems that would definitely put a damper on happily ever after in your new castle. So whose responsibility is it to fix those problems?

Who Pays for Repairs?

The seller is not obligated to pay for anything uncovered by the home inspection unless mandated by the state. However, the home inspection can open up a negotiation discussion between the buyer and the seller. 

You can see if the seller is willing to take care of any problems uncovered in the report. However, this isn’t a time to nitpick; focus on the large repairs and leave smaller ones until after closing. Also keep in mind that if a seller is fixing things before you move in, you don’t get to control who does the work.

What Does a Home Inspection Include?

A home inspection is a visual assessment of a home to determine what problems there are before the final paperwork is signed. Home inspectors look at safety risks, such as the HVAC system, plumbing, and roof, as well as observing and noting any aesthetic blemishes such as chipping paint.

Home inspections do not come with a pass/fail grade, but instead point out what the house needs. Some homes need more TLC than others, but usually (hopefully) you’ll recognize that before an inspector begins their work. Even if a home is brand new, there’s potential for problems that could be uncovered during the inspection process.

A home inspector is not an appraiser, so they won’t say anything about a home’s value. They are also not contractors, and should not offer quotes for any work that needs to be completed. The home inspection is simply the final opportunity for buyers to identify problems with a property before signing final paperwork.

Mandatory Repairs and Major Problems

Depending on the state, some repairs might be mandatory if they pertain to safety hazards or structural defects. Lenders also usually have a list of things that need to be fixed prior to funding a home loan. Though the list varies state by state and lender by lender, the most common issues that need to be resolved are:

• Fire or electrical problems

• Pests

• Mold or water damage

• Toxic chemicals

• Code violations

• Structural hazards

• Dead tree removal

In some states, the seller is obligated to take care of problems before the property changes hands. In some cases, the issues have to be resolved before the property can change hands, but the costs don’t necessarily have to be covered by the seller.

Cosmetic and Aesthetic

Generally, anything cosmetic noted in the inspection report can be put off until after the sale goes through. Real estate agents usually advise that if it costs less than $100 or a handyperson can easily fix a problem, the seller should not pay for it before closing.

Room For Negotiation

If there are problems that you’re willing to take care of for a tradeoff, such as a price reduction, let your real estate agent know. Another common practice is to trade some sort of alternate compensation for repairs, such as asking the seller to throw in some appliances that they weren’t planning to leave behind. You can also ask the seller to purchase a home warranty program that will protect the home for a specified period of time in case anything goes awry.

Check Your Contract

Your offer contract may have a clause that states that if major problems are uncovered with the inspection, you can walk away–and sometimes you should. In fact, the most common time for buyers to walk away from a purchase is after the home inspection. If there are glaring problems that your gut tells you are going to be a huge hassle down the line, such as foundational issues, electrical hazards, or extensive unpermitted work, you may want to go back to the drawing board.

The Bottom Line...

...is that the seller has the final say. In a seller’s market, a seller will be far less inclined to work with you because they have more options as far as buyers go. If the seller refuses to budge and you feel queasy about the inspection, you may have to walk away from the home.