What happens if the home inspection uncovers unexpected repairs?
Making your offer conditional on a home inspection is a good move, since it may give you a better understanding of the home’s condition.
A qualified home inspector can identify issues with the major systems in a home, including roofing, foundation, electrical, plumbing, heating, and air conditioning systems that can be evaluated visually or with the use of testing tools.
Before drafting your offer, consider your tolerance for potential repairs and the level of inspection you want, as some forms of inspection (for example, wells and septic systems) may require a specialized professional or company.
Work with your registered real estate representative and/or a lawyer to make sure the wording of the home inspection condition, or any other condition included in your offer, captures how the transaction will be handled if issues arise that you would consider as possible “deal breakers.”
Depending on how the condition is worded in your offer, if a home inspection uncovers this type of issue with the home, you may have several options to consider.
A few of those options could include:
- You may decide that the repairs are beyond your tolerance for renovations and you may choose to not remove/waive the condition and walk away from the transaction.
- If you want the home, but don’t want to deal with the repairs yourself, you may try to ask the sellers to complete the repairs before closing. Be sure to get any such commitment in writing and include provisions for what happens if the repairs aren’t done.
- You could ask for a price reduction so that you can complete or oversee the repairs after the deal closes.
Remember, there is no obligation for the sellers to agree to these. Discuss the approach that works best for you with your real estate professional. It’s also a good idea to consult your real estate lawyer before exercising these options.
While finding unexpected issues with your otherwise “dream home” may be upsetting, the information will go a long way in helping you make an informed buying decision.Joseph Richer is Registrar of the Real Estate Council of Ontario (RECO). He is in charge of the administration and enforcement of all rules that govern real estate professionals in Ontario. You can find more tips at reco.on.ca, follow on Twitter @RECOhelps or on YouTube at http://www.youtube.com/RECOhelps.