If a seller has not received a response from the buyers during the inspection period, it’s not necessarily a red flag. While it’s possible they want to back out of the sale, it’s more likely that they have failed to mention they don’t require any home repairs, they’re still going over the inspection report, or they’re in the midst of preparing an addendum requesting repairs.
In a perfect world, you find a buyer for your home, they make a reasonable offer, and you accept. Next, the buyer will get a home inspection and you’ll hear from the real estate agent within a few days telling you they will accept the home “as-is,” ask for some repairs to be made, or (alternatively) request seller credits at the closing in lieu of repairs.
But what if it’s been several days since the home inspection and you haven’t heard a word? What should you do now? Today we’ll talk about the importance of a home inspection, what it entails, and what the home inspection report means for both the buyer and the seller.
First, we’ll look into what it could mean, and what to do, if there’s been no response from the buyer within a reasonable time after the home inspection is completed.
What it means if there’s no response from a buyer after a home inspection
The first thing to be aware of is that no answer from the buyer after the home inspection contingency period is up is an implied acceptance of the home in its current state. Technically the home buyer could still back out of the transaction, but they would face whatever penalties the sales contract allows for. This typically results in a loss of the earnest money the buyer has put down.
Earnest money is basically a show of good faith that you intend to purchase the property. It’s usually a percentage of the purchase price (typically between 1% to 3%), and it is negotiable. So if you’re buying a house for $200,000, you might put up somewhere between $2,000 and $6,000 in earnest money. That cash is held in escrow for the time being and then included as part of the down payment.
If the home buyer backs out of the deal without a reasonable cause, the seller gets to keep the deposit. In reality, it’s not in the buyer’s best interest to drag their feet so long that they lose their initial deposit.
Having said that, there are essentially three logical reasons why you haven’t heard back from the buyer, or the buyer’s agent, within a reasonable period of time after the home inspection.
1. The buyer is accepting the house as-is
As a seller or seller’s agent, this is the ideal situation. Presumably, the buyers haven’t found any necessary repairs and are happy with the house as it stands.
It would be a courtesy for the buyer to let the seller know that the inspection report came back with minor or no issues. However, it’s possible they’re busy with other details or haven’t yet told the real estate agent that they’re ready to proceed with the closing.
2. They’re still looking over the home inspection report
The home inspection report is no small document, and it could take a while to get through everything and decide what’s of the utmost importance. This is particularly true for a new buyer who’s never been through the inspection process.
“First and foremost, it is important to remain patient and give them time to process the results of the inspection. It is not uncommon for it to take a little bit of time for home buyers to digest all of the details provided in an inspection report before they make any decisions regarding repairs or other arrangements,” explains Alex Shekhtman, founder and CEO of LBC Mortgage.
Regardless of the time it may take to make some decisions and negotiate for the home repairs, the buyer will need to make contact before the contingency period is up or they risk losing their earnest money (if they’re planning to back out of the sale). Alternatively, they could also ask for an extension if they need a little more time.
3. The buyer is working on the addendum requesting repairs
If the buyer has decided to make repair requests, it may take them a little time to get the repair addendum ready. They may also need advice from their real estate agent, contractors, or others with knowledge of the process as well as what is and isn’t a reasonable repair request. Still, this part of the contingency period needs to move along per the contract.
“The buyer usually has several days from the date of the inspection to decide if they want to ask for repairs. The exact amount of time depends on the agreement between the buyer and seller,” says Shaun Martin, owner and CEO of The Home Buying Company. “However, it is important to make sure that both parties understand the agreement and are aware of any deadlines. This will help ensure that the deal proceeds in a timely fashion.”
What happens after home inspections are completed?
Once the inspection deadline is reached, it’s the responsibility of the buyer to contact the seller, or seller’s agent, if they no longer want to go through with the home sale because of major problems, such as health or safety concerns.
If the buyer still wants to go through with it, they need to either list their repair requests, negotiate a lower purchase price on the house, or ask for seller credits to be applied to closing costs. The home inspection contingency period, set forth in the sales contract, is the time frame within which the buyer needs to decide what to do and complete negotiations with the seller.
Once the seller has heard from the home buyer regarding any repair requests, they must respond within (usually) a few days with one of three possible responses.
- Agree to make the home repairs the buyer requests
- Deny the repair requests
- Negotiate with the buyer
Further negotiations may include agreeing to some of the home repairs but not others, offering seller credits at closing (if they’d rather not handle the repairs themselves), or negotiating a lower purchase price.
Is it necessary to go through the inspection process?
While home inspections aren’t required in residential real estate deals, a buyer would be foolish not to have one done. Even if the home is being sold as-is, you still want to hire a licensed home inspector to look over the house and property from top to bottom. The point of the home inspection is to get an unbiased assessment of the property from someone with no attachment to the transaction.
You can locate a good home inspector by asking for recommendations from your real estate agent, attorney, friends, or contractors. You can also look online through databases such as the American Society of Home Inspectors or the International Association of Certified Home Inspectors.
What does a home inspector do?
As mentioned, the home inspector will thoroughly inspect your potential new home from roof to foundation, identifying any issues, both major and minor. They’ll poke around the attic, cellar, garage, and living areas looking at plumbing, HVAC, and electrical systems. On top of this, an inspector will check that all major appliances function properly.
They’ll also look for issues that have potential health or safety concerns, like mold, pest infestations, building code violations, and fire hazards. In addition, the inspector will try to identify any major structural issues like cracks in the foundation or ongoing water damage.
All of this information will be laid out in a detailed report, often with pictures. As a buyer, it’s in your best interest to be present for the inspection, along with your real estate agent. This way, your agent will have a better idea of what, if anything, you should include in your repair addendum.
What are unreasonable home repairs to ask for?
It’s not up to the seller of the property to make this house into a buyer’s dream home — that’s up to the new owner. Basically, certain “repairs” that fall under cosmetic issues or normal wear and tear are not things you should be adding to your repair requests.
For example, if the walls are painted garish colors, you don’t like the carpeting, or the bathroom vanity is dated, these are not considered reasonable home repairs for buyers to request. On the other hand, asking the owner to repair a crack in the foundation or evict the family of raccoons living in the attic are entirely reasonable requests.
What happens if the seller doesn’t respond to the repair addendum?
While the time sellers have to respond to a repair request will vary depending on the actual contract, it’s usually within a few days. At that time they can accept the addendum, make a counteroffer, or decline to make the repairs.
If they haven’t responded prior to the expiration of the contingency period, the buyer usually has the option to either go ahead with the home purchase as-is or cancel the sale without penalty.
How is a home appraisal different from a home inspection?
Occasionally people will get these two terms confused — understandable given that there’s a lot going on when you’re buying or selling a home! A home inspection is meant to identify any repairs that need to be made to a property but makes no comment on the value of the home. An appraisal, by contrast, is specifically meant to ascertain the value of a home.
A further distinction between the two is that a home inspection is not a requirement of the real estate transaction. A home appraisal, however, is required by lenders so they don’t issue a mortgage loan that’s more than the home is worth.
- If a buyer hasn’t gotten in touch after the home inspection — but is still within the inspection period — they may not have any repair requests, are still going over the report, or are preparing a repair addendum.
- If buyers don’t contact sellers until after the contingency period has expired, that is considered implied consent that they’re accepting the property as-is.
- Home buyers who decide to back out of a deal after the contingency period is up will most likely forfeit their earnest money.
- If a buyer chooses to back out of the sale prior to the expiration of the contingency period because of major repairs needed or safety and health concerns, their initial deposit should be returned to them.
View Article Sources
- Schedule a home inspection — Consumer Financial Protection Bureau
- Selling Guide — Fannie Mae
- Home Inspectors Consumer Fact Sheet — Government of Commonwealth of Massachusetts
- What Is The Best Way To Prepare For an Inspection? — SuperMoney
- How Often Do Contingent Offers Fall Through? — SuperMoney
- Everything You Need To Know About Closing a Mortgage — SuperMoney
- 11 House Hunting Tips to Help You Find Your Dream Home — SuperMoney
- What is a Purchase Money Mortgage? — SuperMoney
- What is the Worst Day to Close on a House? — SuperMoney
- What Does Free and Clear Mean in Real Estate? — SuperMoney
- How Long Does an Appraisal Take? Here’s What to Expect — SuperMoney
- What Does Pending Mean in Real Estate? — SuperMoney
- How To Get a Mortgage With a Smaller Down Payment and No PMI — SuperMoney
- How to Buy a House – Comprehensive Guide For Beginners — SuperMoney
- Mortgage Industry Study — SuperMoney