Whether you’re a For Sale By Owner [FSBO] or using the services of an Agent, it’s pretty rare that a home inspection will ever come back 100% cleared, even in a new construction. There is always a fault somewhere! Of course, faults can range from minor issues to major repair costs.
Functional vs. Cosmetic Defects
There are concerns that can arise in Functional aspects of the home as well as Cosmetic defects. So when confronted with inspection problems, determine first whether or not they affect the living conditions in the home. For example, a mold issue that poses a health risk demands a full resolution prior to a new buyer taking possession of the home as a full-time resident. Alternatively, a minor plumbing issue (although inconvenient) does not present a health issue, so it may be de-prioritized accordingly. The first thing to consider is what is the issue, and how can it be resolved with minimal stress.
Cosmetic damages may include such things as a broken doors, holes in the wall, or carpet stains. The list is endless, but basically, these are damages that do not directly affect the function of the home. Although in some cases, repairs and replacements may still be costly!
Functional Defects are usually much more costly by comparison. Examples include: a dysfunctional hot water tank or furnace, plumbing leaks, foundation damage, broken roof trusses etc. These types of issues almost always require a contractor who specializes in the repair.
Resolving problems arising from a Home or Maintenance Inspection can be a touchy issue. As a buyer, the first step is to discuss whatever is missing or damaged with your Real Estate Lawyer before he/she transfers the money for the home purchase to the seller. This is why a walk-through before the closing date is imperative. If concerns are not resolved prior to the closing date, it’s almost impossible to get their cost covered through appeals to the seller’s pocket… Reporting any defects or repairs prior to closing is not necessarily going to stop the sale, but it does leave a window of opportunity to address issues before it’s too late.
If the issue you have taken (resulting from the inspection) is deemed reasonable, your lawyer can contact the other parties involved to discuss your concerns. If they are contract-related or seem to have occurred after the original viewing of the property, your lawyer may recommend the following- that a set amount of the purchase funds be held back in a secure account until the issue has been resolved. Then, the seller (in a timely fashion) must make arrangements for the repairs to be completed or come up with an alternate solution; this may include a reduction in the sale price in order to cover the cost of repairs. If this is the solution on which all parties agree, the buyer proceeds to independently arrange his/her repairs, but the sale itself completes on time, as contracted.
Usually, the quickest solution that everyone can agree on is usually best. Delaying the closing date until repairs are completed can sometimes cost the buyer more than they’re willing to part with, to finally get their house sold.
For more on buying, check out the Canadian Home Find Buyer’s Guide … and save yourself thousands in costly mistakes.