April 7, 2021

Can You 'Fail' a Home Inspection?

You did it. You found a home buyer. They’re absolutely head over heels in love with your house. They’re ready to sign the sale contract. But first, you have to get through your home inspection.

A brick house under a blue sky

You did it. You found a home buyer. They’re absolutely head over heels in love with your house. They’re ready to sign the sale contract.

But first, you have to get through your home inspection.

The home inspection is a period of significant dread for many home sellers. Can you fail a home inspection? Will the buyer walk out at the first inkling of trouble from the inspection? Will you have to spend significant sums to make repairs after a home inspection?

Here’s the good news–even if you get unwelcome results on your home inspection, you still have options. Let’s take a closer look.

What is a Home Inspection?

A home inspection is a report on a property’s safety and current condition. It is not to be confused with a home appraisal, which is required and conducted by the buyer’s lender to determine the value of the home for which the buyer is seeking a mortgage.

Homebuyers arrange and pay for a home inspection before finalizing a home sale. Based on the results of the inspection, they may choose to move on to closing, renegotiate their price, request repairs, or even cancel the sale altogether.

The last option is a nightmare for home sellers, and it’s the worst-case scenario if your home does poorly on an inspection.

What Happens During an Inspection?

An inspector looks for quite a lot. In fact, the National Association of Home Inspectors, which trains and certifies home inspectors throughout the country, has no less than 1,600 items on its various checklists that home inspectors are supposed to look at.

Basically, an inspector’s job is to spot defects and make notes of what they find. Your inspector will go through your home’s interior and exterior to record any hazardous, broken, or defective issues in the house and the area surrounding it.

The process typically takes a few hours for the average house, and the report generated from the inspection takes three to four days to complete.

And while there are 1,600 items that inspectors should look for in a home inspection, what they’re primarily focused on are safety issues.

Can You Fail a Home Inspection?

This brings us to the central question haunting your stress dreams: can you fail a home inspection?

The short answer: no, not exactly.

Home inspections aren’t pass/fail, and issues revealed by your home inspection do not necessarily guarantee that the buyer will walk away. However, the home inspection does open the door for renegotiation. The buyer may walk away if they’re not satisfied, or if they see issues that are too serious or expensive to be worth it.

Common Inspection Issues

The good (or bad) news is that many homes encounter the same issues during a home inspection. Usual suspects include:

  • Ground sloping or draining toward the house
  • Grading issues
  • Issues in the foundation
  • Moisture in the basement or attic
  • HVAC problems
  • Roofing problems
  • Plumbing issues
  • Leaks
  • Mold
  • Termite damage
  • Rotting wood
  • Electrical issues
  • Defective masonry
  • Safety and security features (i.e. working locks on the doors)
  • Asbestos
  • Radon
  • Lead paint
  • Septic system problems

All of these issues are potentially fixable. The question is the extent of the damage and what the buyer is willing to accept in terms of repairs.

Home Inspection Dealbreakers

That said, there are certain home inspection dealbreakers. These vary based on the buyer–someone looking for a turn-key home may balk if your roof needs replacing soon, whereas someone with high risk tolerance or a buyer actively looking for a fixer-upper may not be scared off by serious issues like structural flaws. You may need to lower the price, but you can still sell your house.

That said, there are a few dealbreakers that are consistent among most buyers. These include:

  • Lead or asbestos of any kind
  • Serious code violations
  • Black mold
  • Termite damage to structural components
  • A compromised foundation
  • Knob-and-tube wiring
  • A seriously damaged roof

Basically, if your home has serious, extreme safety issues that must be addressed before it is livable, that’s more likely to scare buyers away (especially if those issues are expensive to fix).

What Comes Next

As previously stated, bad news on your home inspection isn’t necessarily the death of the sale. You have options.

After the inspection, buyers can submit a repair request addendum, a document in which buyers list the problem areas they want repaired or be offered monetary compensation for the repairs. They will typically have licensed contractors come through the home to give quotes on repair costs.

This does not mean the seller has to comply. That said, outright refusal to comply can result in the buyer walking away. You can negotiate with the buyer, but if you love your home and are willing to shell out, buyers will certainly be happy about it. It depends on your home, your inspection, and what you’re willing to offer the buyers to keep the deal alive.

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