Home Inspection Report Came Back…So What’s Next?
In part one of this post we provided several important reasons for commissioning a home inspection report when buying a home… Didn’t read part one yet? Find it here! In this second part, we discuss what to do after the home inspection report comes in.
“As is”…Yes…but…?
In Arizona, the home purchase contract says that the purchase is “as is.” However, it also allows for an inspection period in which you, as the buyer, have the ability to inspect the property to insure that you’re completely satisfied with what you’re purchasing.
You’ve done your due diligence and have completed all the desired inspections for your new home. You should have received inspection reports for all the types of inspections you’ve had done. You may also have received estimates for some of the work. Armed with this information you are ready to begin repair negotiations.
What Should I Request?
After you receive your inspection reports you’ll want to discuss them with your real estate agent. If your inspector finds issues with any of the following, it would be considered reasonable to request repairs:
- Electrical
- Plumbing
- HVAC
- Roofing
- Pest Issues (especially termites)
- Health Hazards
Basically, reasonable requests amount to anything that poses a health concern or safety issue. The rule of thumb is that if it affects your ability to enjoy living in the home, it’s fair game for negotiations.
What Shouldn’t I Request?
Superficial items shouldn’t be high on your list of repairs that you’re asking the seller to make. Don’t be the person that asks for every little thing like patching picture hanging holes, or tightening an outlet cover. These are things that are easy for you to fix and cost very little. If you request every little thing the seller may be less likely to want to fix anything. It’s best not to nit-pick and focus on the more significant issues.
How Do I Ask for Repairs?
The Arizona Department of Real Estate has provided a form for this purpose called the Buyer Inspection Notice & Seller’s Response or BINSR (you can view a sample of the BINSR here). Your real estate agent will prepare this form and have you sign it, and then forward it to the seller’s agent. Remember, you have to submit this form within your inspection period.
On the form you’ll list all the items that you’re requesting to have corrected by the seller. You also have the option to request a credit in lieu of repairs or ask the seller to reduce the purchase price of the home. This is done by submitting an addendum along with the BINSR, with the amount of the credit you’re asking for. You also have the option of accepting the home without asking for repairs.
What Happens Next?
Once your agent has submitted the BINSR to the sellers, they have five days to decide how they want to respond:
- They may agree to do all the requested repairs.
- They may agree to do some of the repairs but not others.
- They may refuse to do any repairs.
- They may agree to either give a credit in lieu of repairs, or offer to reduce the purchase price of the home. (This option will also require an addendum stipulating the amount of the credit or purchase price reduction.)
The seller will respond on the same form (the BINSR).
Now What?
Now that the seller has let you know what repairs they’re willing to make or what credits or price reduction they’re offering, you have a decision to make and you have five days to decide. Your choices are limited to two: you can decide to accept the seller’s response and move forward with the purchase, or you have the option to cancel the contract. If you do decide to cancel, you are entitled to get your earnest deposit back.
Final Thoughts
The best way to get the seller to respect and agree to reasonable repair requests is to have a real estate agent representing you and your best interests. Often, they and the listing agent can talk through the items and make recommendations that both parties will be comfortable with.
Contact the Donnelly Group
If you are looking to buy a home in the Phoenix area, the Donnelly Group has the expertise and experience to help you through the process. Please don’t hesitate to contact us at 480-792-9700 or by email, we’d love to help.
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