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How To Explain Home Inspection Reports to Buyers

As a real estate agent broker, you know home inspection reports typically include a number of details that can frighten and overwhelm prospective buyers. To help alleviate fears, it’s important to educate your clients so they can make smart buying decisions. Use this guide to help your clients determine which items are deal-breakers, and which are quick fixes.

What is Included

By definition, a home inspection report is a detailed, itemized list prepared by a certified inspector, who identifies deterioration, assesses the condition of home systems, and provides recommendations for a buyer. In effect, the home inspection is conducted to unveil any expensive defects unknown to the buyer and seller using a recognized Standard of Practice.

As your client’s representative, you will want to make sure the inspector assesses several key parts of the home, including:

Structure: framing and foundation.
Electrical and plumbing systems; heating, water supply, and drainage; service entrance wires, control panels, fuses, and breakers; cooling, heating, and ventilation/insulation.
Interior: doors and windows; walls, ceilings, and floors; basement and attic.
Exterior: driveway, roof, siding, walkways, doors, steps, and decks.

Throughout what is typically a three to four-hour process, the inspector will look for any evidence that a system – such as plumbing – may have caused damage to the walls or ceilings. The inspector will observe the condition of every key element and take notes. If the inspector notices a potentially serious issue, he or she may recommend that you seek further evaluations from an expert – such as a mould inspection or electrical inspection.

Although an inspection provides the homeowner with a good idea of the condition of the home, unidentified issues can always arise at any time.

Interpreting the Report

A home inspection report can come in a variety of forms, including a rating system, checklist or narrative. In most cases, it will include an introduction with dates, definitions, weather conditions, type and age of the building, and the people who were present during the inspection. It will also contain component sections (exterior, interior, roof, etc.) with detailed observations, comments, photos, and recommendations. The report will generally conclude with a summary of problems and discoveries, along with areas that require further investigation.

Make Recommendations To Your Clients

While most every home will have at least a few imperfections, it’s important to advise caution if your client receives an inspection that includes warnings about potential structural damage, serious plumbing issues, electrical problems, radon, or any other issue that might lead to substantial repair costs or health risks. You should also make sure that your client has the appropriate contingency clauses in place, so he or she can back out of a deal if an inspector discovers serious problems.

If the home inspector recommends specific repairs or upgrades, such as replacing outdated windows or installing banisters on staircases for safety, you may wish to insert provisions into the contract requesting that the seller make all of the necessary repairs before closing. You and the buyer should also do a final walk-through to ensure that the house is in the expected condition before closing.

Again, be sure to get an expert evaluation for issues related to any problems that could lead to high repair costs or health risks. Lastly, you should also remember that real estate brokers are legally obligated to act in the best interest of their clients, meaning you can be held legally liable if you fail to discuss a home inspection with your client.