What Happens After Home Inspection Results Come Back Negative?

Rarely do home inspections come back with perfect results. However, some inspections can really go south and end up killing the deal altogether. So, what happens after home inspection results come back negative? What can you do to overcome this problem as a home seller?

Bad home inspection results may come as a shock to some. But as a seller, it is important to be prepared for the bad news. You need to know what you can do next. 

In this article, you will learn how to prepare yourself if a home inspection goes south. First, let’s talk about the importance of home inspections. 

Importance of a Home Inspection for the Seller 

While a home inspection is not always required, it is a pretty standard component of a real estate transaction. Home inspections are important to provide an unbiased report of the condition of the home and notify both the buyer and seller of any issues and necessary fixes. 

The home inspection can also save both the buyer and seller from potential legal trouble. It will clearly and fairly identify any defects, major or minor, with the home. After all, as the home seller, it is your duty to warn buyers of major issues with the home!

But, what happens after home inspection results come back as unsatisfactory?

What to Do When You Get a Bad Home Inspection Result 

While it may seem like the end of the world at first, a poor inspection result can actually be a blessing in disguise to help you avoid legal trouble as a seller

It’s better to know of major issues with your home now rather than later. That way, you can address them properly! For instance, you can either take care of any repairs yourself or re-negotiate a fair price with your buyer. 

Even with a bad inspection result, there is still hope! You may still be able to continue with the deal if you:

  • Agree to the buyer’s requests 
  • Cover the costs in the form of repairs
  • Lower the sale price

Or, you can even agree to a concession amount to give the buyer the opportunity to cover the cost and make any repairs themselves. 

Common Repairs Needed After a Bad Home Inspection 

If you do get a poor result on the home inspection, it is important to know what repairs are reasonable and which are not. For example, if the buyer doesn’t like the paint color of the home or thinks the bathroom fixtures are unsightly – these are NOT valid complaints and shouldn’t be up to the seller to fix. 

However, here are a few common requests that result in a bad home inspection. These should be repaired or paid for by the seller as they can be major safety issues that no buyer will want to take on: 

  • Roofing Issues– Can range from minor to major, but the roof should definitely be in good working condition for the buyer
  • Electrical Issues– Any major issues that violate code and safety regulations 
  • Plumbing/Water Drainage– Signs of leaks, mold, cracks in the plumbing, or failing systems are not something a buyer wants to take on in a new home
  • Foundation Issues– Anything that is a structural issue with the home is pretty major 
  • Lead Paint or Asbestos– This can be a common issue with older homes. Definitely needs to be safe and up to code
  • Damage from Pests– Termite damage is a common issue that can compromise the structure of the home along with other insect or animal infestations

When it comes to the actual bones of the home, make sure any issues are taken care of. This will ensure the safety of the home for the buyer. It will also help you avoid legal fees in the event of an unfortunate incident. 

How to Overcome Inspections that Kill the Deal

what to do when home inspection results are negative

So, what happens after home inspection results come back negative and you cannot come to a compromise with the buyer? The worst-case scenario of a bad home inspection is that they completely back out of the deal. Some buyers are more risk-averse than others. So, they will not want to incur any more costs and enter a contract for a home that needs major repairs.

Take Care of Repairs Before Future Deals

At this point, there is not much else you can do. If the damage within the home is really that severe, you will probably have to get it taken care of anyway. Here’s why: You have to disclose the issues found during the inspection, so future buyers will be aware of the changes needed to the home. 

This can also turn around in your favor after you complete the list of repairs, as you will be able to advertise the home as newly repaired with updated systems, and future buyers will know they won’t have these issues.

List the Home as a ‘Project’

But, if you don’t have the time or money to take on these repairs, it is not the end of your selling efforts. With your list of repairs and maintenance, you may want to list the home as a fixer-upper and attract a different type of buyer. If you lower the price, you might find a buyer who is happy to take on the maintenance.  

How an Escrow Account Can Help

Furthermore, one other way to protect your deal as a seller is to secure your assets in an escrow account. For instance, say you are about to close a deal on the sale of your home. What happens after home inspection results come back negative and you have an escrow account? Good question!

After a home inspection comes back as less than satisfactory, your buyer might ask for specific changes to be made. Or, they will choose to back out.

Unfortunately, this particular buyer is asking for some major updates. They go above and beyond the specifications that were disclosed from the home inspection. Luckily, depending on the time and date the inspection was made (that is to say, they were conducted after a specified date documented in a contract), you may have the opportunity to receive some money back from the fall-through deal if the buyer ends up backing out. 

This is just one small way you can prepare yourself if your deal ends up dead! 

Learn More Tips to Sell Your Home with New Venture Escrow 

Want more real estate advice to help you sell your home? Check out this blog on what to do if the home appraisal is lower than the offer

Furthermore, get in touch with an escrow expert at New Venture Escrow for more tips and tricks on how an escrow account can be your ultimate lifeline during your home buying and selling process!

Like this post? Share it!


Subscribe to My Blog!

Leave a Reply