As a seller, the minute you and a buyer come to an accepted offer, you start to see the dollar signs dancing before your eyes. This person wants to buy my home for a million dollars? Can’t wait!
But, as we all know, an accepted offer is often just the first stage in a long and lengthy process. You may be sitting on tenterhooks for weeks as you wait for the appraisal, for the buyer to get approved for financing, and of course, the home inspection. Insert horror film music.
Why do sellers fear a home inspection?
Let’s face it – as a seller, just the phrase “home inspection” often wants to make you run for the hills. You know that you’ve done an excellent job maintaining your home, but that doesn’t mean you want a professional snooping around – what if they tell you that, without your knowledge, your home’s foundation shifted and now the buyer doesn’t want it anymore? It’s not like you purposefully moved your home!
But home inspections are just for HOMES – not apartments, right?
This isn’t totally true. In New York City, real estate agents don’t necessitate a home inspection in large cooperative or condominium buildings. In a mid-rise or high-rise building, the roof, walls, and common elements are the responsibility of the building itself. If the roof needs fixing, the building should be paying for that out of its reserve funds or potentially levying a small assessment on the residents. However, this rarely worries residents because there are so many apartments, so each homeowner’s responsibility for the cost is so small.
However, in a small apartment building where only eight apartments exist, a purchaser likely will want a home inspection, just because if something in the building goes wrong, the purchaser is now responsible for a much more significant percentage of any repair costs. Even though the responsibility of common elements still technically falls on the building, smaller buildings are likely to have much smaller reserve funds – so a buyer may want to make sure that building is in good condition and bring in an inspector.
So if I don’t live in a big high-rise, I should be worried about the home inspection?
Yes and no. A good home inspector’s job is never to kill a deal. A good home inspector will point out things that you should be looking for. For example, at a recent home inspection in the West Village of a small building, the home inspector pointed out a crack in the wall that means the structure likely slightly shifted. Does that mean the purchaser shouldn’t buy it?
Of course not! In an old building, this sort of slight shifting is very typical, and so long as the structure is reinforced properly, there is no reason to worry about it. If you own a piece of history, like a 150-year old home, whoever is purchasing this likely understands that along with history comes character, and along with character comes imperfections.
I’m Worried that My home is a money pit
If you’re worried that your home may come with costly repairs, hire your home inspector before you put your home on the market. That way, he or she can identify potential problems for you and your agent can let buyers know about these problems up front. In my experience, it’s not the inspection that kills deals – it’s the difference between expectation and reality for the buyer. If your buyer walks into your home knowing that they may have to make $50,000 in repairs, but you’ve taken that into account in your pricing, they won’t be surprised when their home inspector finds that.
On the contrary, if you try and hide these issues and your buyer finds them, that’s when you’re likely to lose the deal. Not because of the problems themselves, but because of the issues with expectations.
What if the buyer doesn’t want to buy the home?
To be honest, your real estate agent needs to do a better job managing expectations. This is what your agent is there for. A good agent should remind a buyer that a home inspector is likely to find small problems with a home. This means the buyer hired a good home inspector. But minor problems with a home are common, and if terms need to be re-negotiated, they can be.
Every home has a problem but is right for somebody at the right price. The truth is, all homes that aren’t brand-new are likely to have issues, but if a buyer is prepared for this, they are less likely to be shocked when these issues arise.
Your agent should be sure that the buyer knows that issues are common, and even extreme problems can be fixed for the right price. Might you have to re-negotiate the terms of your sale if your buyer finds $200,000 of unreported repairs? Yes – but this isn’t a deal killer.