Seller Review of Home Inspection Requests

When Will I Receive Requests & Receive the Home Inspection?

Typically it's sometime between the the day it's performed and the deadline.

If you want to know more, there are a number of possibilities:

1. You'll get the home inspection and the requests typically at the same time, rarely on the day it's performed, & typically sometime between the day it's performed and the day it's due.

2. You'll get the home inspection on one day (i.e. the day it occurs, the following day, or a later day), and repair/other concession requests on a later day.

3. The buyer will request an inspection deadline extension (especially if additional inspections are needed and not using a contract that provides additional time for those by default. The REIN contract doesn't provide extra time by default for these, while VAR offers do.

4. The buyer will be late in getting you requests and the inspection(s) without a signed contractual extension, giving you the right to ignore the requests as long as the lender (if applicable) or other parties (i.e. termite/moisture inspector or even insurance company) don't have problems with it.

5. You won't get any results of the home inspection. The buyer will terminate the contract without sending you the home inspection or any requests.

• While the option to terminate without submitting the inspection to the seller is possible typically in REIN contracts, some variants of CVR contracts include no ability for the buyer to do that.

Importance of Timeliness in Response

While sometimes the other side can get exasperated & be ready to walk early (though they can't unilaterally terminate early if they request concessions in the inspection contingency addendum) or be willing to go beyond the contractual deadlines with or without a formal extension, standard response times vary by the offer type used.

REIN Offers: Unless revised, the property inspection contingency addendum's standard terms on page 2, section 2 B (Negotiation Period) include a provision for the buyer being able to walk the 6th day after the inspection requests are submitted (though they are welcome to submit a release any time before, even though they technically can't terminate before day 6)

VAR Offers: The timeline is negotiable & written into the home inspection contingency addendum, but is not a default # of days.

Importance of Timeliness in Arranging Contractors

Failure to promptly arrange contractors will sometimes result in a buyer looking to release the seller prior to the deadline. Also, some contractors may be unavailable for a greater time than the timeline entirely even if sellers reach out to them right away, so it's critical to jump on arranging estimates. While you will ideally get multiple quotes on each item, if you don't hear promptly back from a contractor, &/or if it doesn't look like you'll get an estimate before the deadline, it's important to start reaching out to additional contractors. Don't neglect to follow up either.

Different Strategies for Arranging Contractor Estimates

1. Arrange contractor estimates for all items requested, whether or not you plan to agree to do everything. (typically best if already 1+ contract fall through)

   1. Biggest advantages

      1. Not needing to get the same contractor out twice (& the time & sometimes $ that goes with that) if the buyer insists on something that you weren't planning on covering.

      2. Ability to provide estimates on items that seller isn't covering to buyer in contract and other prospective buyers.

   2. Biggest disadvantages

      1. More eyes on items means that more items will come up that will need to be disclosed to the buyer & potentially future prospective buyers if the deal falls through.

      2. It takes longer to get estimates for everything, and sometimes estimates will cost $

2. Arrange only contractor estimates for items that you plan on doing something about in a counter. (typically best if no prior contract fall throughs due to inspection)

   1. See the converse above

Different Strategies for Responding

1. Reject all requests without any further concessions (not typically recommended unless buyers' requests are all unreasonable)

2. Reject all requests with a $ concession

   1. Keep in mind that if the buyer is using a mortgage, typically there is a cap to the % of financial concessions that they are able to receive, i.e. 3% for many (but not all) conventional mortgages with <10% down, 4% for VA loans (excluding closing costs & certain other items), etc.

3. Accept all requests

4. Accept some but not all requests

5. Accept some requests and provide a financial concession in lieu of other requests

   1. See #2 a. above.

6. Accept some or all requests, but request concessions from the buyers, i.e. changing other elements of the contract like a closing date that you may be unable to meet due to all the repairs requested

Importance of Estimates Before Agreeing to Requests

Especially if you're unfamiliar with a rough idea of what it's going to cost to do something (i.e. if you're a class A contractor or if it's a fairly simple request), it's best to get estimates of whatever you plan to do before you agree to any requests. If you're short on time, even a cost range from a contractor that you plan to use is better than no estimate, especially if you provide them with plenty of pictures of the issue(s). A Matterport link to the home is also a good idea if the 3D tour covers the area & it's clearly visible in the 3D tour.

If the buyers provide their own estimate, keep in mind that costs & opinions can vary substantially. Also, if an inspector mentions something, but doesn't mention the scope of it, and the buyer responds with an estimate with a very wide scope, keep in mind that the scope of the work in the estimate may be much broader than what the inspector is saying is problematic. I recall one occasion where I recommended that my seller clients get additional estimates when a situation like this one is highly likely to have occurred. They didn't take my advice, accepting the requests as is in order to get to closing without any delays & mitigate the prospect of getting out of the contract. I happened to be present with the buyer's agent & listing agent during the walk-through inspection. While I was getting my things, I overheard the agent bragging to their buyer clients about the concessions that they requested and received "this is one for the record books".

What About Other Prospective Buyers?

The longer and the more unreasonable the list of repairs, the more it makes sense for the listing agent to start reaching back out to other prospective buyers & the more it makes sense to continue to encourage showings.

What Contractors Should You Reach Out To?

Adam has spreadsheets on the subject for most contractors. Let him know if you'd like his spreadsheets. He has been discouraged from highlighting a single individual in many circumstances due to a prior buyer seeking to take advantage of his recommendation even when he presented 5 options.

See also: Basic Elements of Service Provider Determinations

Are Specialists Needed When Requested?

That depends. In some cases, buyers will be willing to compromise regarding specialists requested, and in other cases, they won't.

Low-skill jobs are sometimes requested of specialists when many general contractors can do them.

If you counter a specialist request with a "Class A Contractor" request, the buyers are more likely to be willing to shift things than if you simply state a "licensed contractor" who could be brand new with low skill.

If you want to do items yourself, you'll have a higher chance of convincing the buyers in a counter if it's either low-skill work or you have pertinent job experience or education that you can relate (& ideally prove, i.e. your name and place of work visible on the company website where you provide a link). If you are willing to cover the cost of reinspection by the home inspector (i.e. with a $200 cap if they were to charge more than that, which would be unusual), you can further help convince the buyer.

Should I Schedule Any Work?

While I typically don't recommend starting any work before the inspection requests are agreed upon, it doesn't hurt to schedule work out to be completed after the inspection requests are consummated & before closing, especially if there is a large buffer zone in between in terms of the # of days expected between the 2. Sometimes contractors are booked weeks out, so scheduling things in advance can be helpful to avoid a closing delay.

Should I Start on Any Work?

Sometimes sellers will start on work before the agreement is reached, but I typically don't recommend that unless at least 1 of the following is pertinent in addition to abiding by the specific request according to the terms of the inspection request without compromise:

• You had planned to do something anyway before closing

• It would disqualify any future mortgage & most appraisers would likely spot it when you didn't realize that it was an issue previously & weren't planning on only marketing your home as a fixer-upper to investors (& you have the capital to make the improvement)

When Reaching Out to Contractors, What Should I be Asking?

It's important to provide contractors the home inspection or other inspections as well as the specific requests of the buyers (&/or what you plan to counter with).

It's also best to ask questions like:

1. Are there any of these items that you wouldn't likely be able to handle or where you wouldn't have the specialization that is being requested?

2. When would you be available for the estimate?

3. Would there be any cost for the estimate?

4. When would the estimate be ready following the in-person visit?

5. While I know it could change, & I know that you may not know definitively until the estimate occurs, what's your availability like for work starting and completing following the estimate coming back if we were able to schedule something within 24 hrs of receipt of the estimate?

Requests Regarding Items Under Warranty, Insurance, or Recently Completed Work

If items that may be covered by warranty, insurance, or recently completed work that were faulty are discovered, sellers can often save money by going through the appropriate channels first to pursue those rather than using your contractor(s) of choice or your agents' referred contractor(s). While not typical, sometimes work can be completed at a discount or freely even after warranty expiration, especially in the event of contractor negligence. If you believe that contractor negligence was involved for something faulty, even after the warranty expiration, it's a good idea to seek to pursue that. A contractor once put siding on my house that came off a few years later in high winds, was unwilling to do anything about it due to it being beyond the warranty, but once pressed, was willing to come out and complete the job at no cost to me.

Will My Agent Reach Out to Contractors for Me?

Agent & company policies vary on this issue. Any agent who has been badly burned by a buyer or seller looking to take advantage of the agent or the company in the past after reaching out to contractors or inspectors for them is less likely to be willing to do it again, even if they have contractual agreements in place that a buyer or seller may have signed. My firm discourages the practice of an agent contacting contractors & inspectors on behalf of the seller.

I have personally been badly burned on this subject by a negligent client before despite:

• the client initially saying it wasn't my fault

• the client first going after the agent on the other side of the deal & the service provider

• reaching out to multiple parties and providing a client options that I received no kickback from

• having the client sign an affiliated business disclosure prior

• sharing with them via email that if they would hold me liable for anything related to the person they hired that I referred to them that it would be better for them to contact a party independently

• The client showing no signs of volatility until the issue arose

What About Likely Appraisal Requirements that Buyers Ask for?

Different appraisers will catch and miss some things, and the requirements also change over time. That said, if something is obviously going to be caught by an appraiser, it's best to agree to do it, though keep in mind that sometimes requirements may conflict if not executed precisely (i.e. installing railings & maintaining adequate width for handicap accessibility).

Related:

• Responsibilities & Inspector Options Including Deadlines Template for REIN & VAR Offers

• Home Inspection Addendums

• Cost Guide to Repairs & Remodeling

• Where to Find Equipment To Borrow/Lease/Purchase for Your Property

• Financing Repairs/Renovations Prior to Sale

• As is House Purchases & Sales

• Detailed Questions for Home Inspectors

• Home Inspection Requests for Buyers

• What Buyers Should Do After Home Inspection Contingency Is Removed

• Basic Elements of Service Provider Determinations

• What Can Go Wrong in a Real Estate Deal After a Home Inspection Contingency is Removed

• SE VA House Seller Guide