7 Things Home Inspectors Look For That May Kill The Deal

You got an offer on your house! Congrats … but don’t celebrate yet. Most real estate contracts have a home inspection contingency, which allows the buyer to negotiate their offer, request repairs, or back out of the sale completely.

Noooooo!

Let it be known, flawless home inspections are virtually unheard of. The reality is that no house is perfect and the home inspection report will come back with a list of problems.

Keep in mind that 25% of home sales get delayed during the closing, and home inspections cause 16% of those delays, according to data from the National Association of Realtors.

Yet very few deals — only 2% — actually die after a seller accepts an offer, according to Realtors surveyed in October 2017. That means even if you hear the worst possible news from a home inspector, the odds are still in your favor for a successful closing. But it might mean making repairs, offering a credit or finding someone who will purchase your home as-is.

We spoke with top real estate agents, experienced home inspectors of HIABC to uncover the top things home inspectors look for during the home inspection and narrowed it down to the major items that could drag out your closing. That way you can prepare for the worst, know all your options and no matter what, keep your home sale on track.

What Home Inspectors Look For

A home inspector’s checklist is exceedingly thorough. As Eric Huo, a HIABC inspector of 10 years and principal of Total Home Inspection, puts it, “anything and everything that has anything and everything to do with the house, we observe, evaluate, and then report on.”

The buyers want a house that is safe, and that’s what inspectors primarily look for. “Our standard very simply says, we look for things that are significantly deficient, unsafe, near the end of the service life, or not functioning properly,” Eric told HOGV. “That’s primarily what we do. We don’t nitpick. We don’t look at cosmetics. If there’s wallpaper peeling off the walls, we don’t look at that. If there’s a hairline crack somewhere, we don’t look at that. We predominantly focus on big-ticket items.”

There are 7 major issues that home inspectors look for that can affect the outcome of your sale or cause buyer hesitation when they get the home inspection report. These issues are some of the most expensive and labor-intensive to fix and may pose threats to the safety and function of the house.

Here’s what home inspectors look for that, if found, could impact your home sale:

1. Water Damage

“The three biggest things that are bad for a house are water, water, and water,” said Eric. When water gets into a home’s vicinity, it can cause a range of major issues, most of which are red flags for buyers. Water in the basement can be a sign of structural damage, roof leaks or plumbing issues can cause water stains on walls and ceilings.

In the event of overlooked or hidden water damage, mold can form and potentially make the environment toxic. According to the Center for Disease Control and Prevention, exposure to mold in damp, indoor environments is linked with upper respiratory tract symptoms in otherwise healthy people.

In severe cases, mold removal can cost tens of thousands of dollars. Water damage and mold cost the insurance industry $2.5 billion dollars per year, and the average cost of a home water damage insurance claim is nearly $7,000.

In minor cases of water damage or mold, you may be able to offer the buyer a credit for repair instead of fixing it yourself. This can be negotiated after the inspection report comes back

If an inspector reports that there are signs of severe water damage in your home or the buyer requests that you repair the damage before closing the sale, bring in a professional to investigate immediately.

2. Your Home’s Structural Integrity

Foundations are meant to stay in one place but, over time, water can cause the soil around the foundation walls to expand. When the water goes away, the soil shrinks and the foundation settles, creating cracks and pathways for water to enter the structure.

According to data from over 10,000 structural claims, 25% of all Canadian homes will experience structural distress during their lifetime. The cost to repair or replace foundation can range from $500 to over $10,000, depending on severity. Most homeowners pay about $4,000 for foundation repair and it could take anywhere from a few days to several weeks to fix structural issues. If structural issues are left unfixed, it could lead to more damage to the house and possible safety issues.

Here are some ways to tell if your home has settled or the structure is compromised:

• Cracks in basement walls or around door frames
• Uneven or bouncy floors
• Gaps between walls and floors
• Nails popping out of walls
• Cracks in bricks or stonework
• Leaning front porch or stairs
• Cracked or leaning chimney
• Gaps around windows or door frames

You can try to negotiate a repair credit with the buyer instead of fixing structural issues, but buyers are likely to want a sound structure before moving into a home.  If you need to repair structural issues, bring in a structural engineer or foundation contractor.

3. Damage to the Roof

A strong roof is necessary to protect a home from weather elements, so a damaged roof could seriously affect the sale price of your house. A roof can last for up to 25 years but it’s wise for homeowners to inspect their roofs once a year.

A deteriorating roof could lead to more extensive issues like leaks in the ceiling or pest infestation, and buyers will consider this when negotiating the price of a home.

Thomas Day, a top 1% of real estate agents in Burnaby, doesn’t always recommend sellers repair a damaged roof before listing their house. He said, “if you go to the expense of putting a new roof on, you spend anywhere from $15,000-40,000 and you may not get that back in the resale of the house.”

Speak to your real estate agent about what you should do if your roof is damaged. In some cases, it may be more cost-effective to slightly lower the price of your house as opposed to repairing the issues.

These things could be a sign that your roof needs repair or replacement:

• Loose or missing shingles
• Buckled or curled shingles
• Loss of texture on shingles
• Cracks or rust on flashing
• Excessive algae growth
• Soft spots or unevenness
• Moisture in attic or ceiling

4. Problems with Your Home’s Electrical System

In 2015, fire departments in the U.S responded to an estimated 365,500 home structure fires, over 13,000 people were injured, and the fires resulted in $7 billion in direct damage. Electrical distribution or lighting equipment in the home remains the 4th leading cause of home fires, according to the National Fire Prevention Association.

So, because of the elevated risk of injury and property damage, home inspectors make absolutely sure that both you and the buyer are aware of any electrical issues in the house.

If a home inspector notices an electrical issue in the house, ask your real estate agent to recommend an electrician to come out and take a look at the problem.

A licensed electrician can determine if electrical issues are simple fixes or need to be replaced entirely. Be warned: rewiring a home can cost anywhere from $3,000 to $30,000, depending on the size of the home and extent of the repairs.

Some of these electrical issues may cost more than others, however, you need to take them seriously as they could pose a threat of fire or electrocution.

These are the most common electrical issues that home inspectors find during home inspections:

• Exposed wiring and splices
• Undergrounded three-prong plugs
• Painted outlets
• Double Tapping of circuit breakers
• Reversed Polarity
• Improperly modified electrical panels
• Knob and Tube Wiring
• Aluminum Wiring
• Federal Pacific breaker panels
• No GFCI protection
• Missing knockouts in panels
• More than one neutral wire in a slot
• Wiring against sharp edges

5. Plumbing Related Problems

As previously mentioned, water is a homeowner’s worst enemy. It can be hard to notice major plumbing issues until an inspector comes in. Redoing a house’s plumbing can cost tens of thousands of dollars, and minor leaks or rusted pipes could be a sign of bigger plumbing issues.

But, that’s not the only thing that should alarm you.

A leaking faucet alone could significantly run up water bills. The Environmental Protection Agency reports that annually, household leaks waste 1 trillion gallons of water nationwide (which is equivalent the water use in over 11 million homes) and thus adds 10% onto water bills for homeowners.

If there are leaky pipes, clogging, or overflowing in your house, a home inspector will suspect a larger, more serious issue. A buyer will want these things investigated, and rightfully so.

These plumbing issues are hard to see but could cost thousands to fix:

• Polybutylene piping
• Polyethylene piping
• Galvanized pipes
• Broken or Rusty Pipes
• Clogged Sewer Line
• Running Toilets
• Hidden Leaks
• Water Heater
• Broken thermostat
• High Water Pressure
• Sediment Build-up
• Rust

Need a good plumber to take a look at your house before the inspection? We recommend checking out a few of these places to find a plumber for free:

6. Insect and Pest Infestations

Carpenter ants, certain types of beetles, and termites are amongst the common wood-destroying insects that severely damage a home.

Ants are the number one nuisance pest in the country, with carpenter ants ranking as one of the most problematic. Termites damage approximately 600,000 homes in the U.S. each year, leading residents to spend an estimated $5 billion annually to control termites and repair termite damage.

Rodents, on the other hand, invade 21 million U.S. homes each winter, and over ⅓ of Americans have seen a rodent in their house within the past year. If you see a rodent in your house, you could have a big problem on your hands. Mice are capable of producing up to 12 babies every three weeks. They carry salmonella and disease-causing parasites like fleas, ticks, and lice and can gnaw on wood and wires, increasing the risk of electrical fires.

In the worst-case scenario, a home inspector will find these destroying organisms after it’s too late. In this event, certain components of a home—such as the foundational structure or wiring—will need to be replaced, which could seriously affect a home’s value and buyer interest.

If an inspector finds hazardous organisms before serious damage occurs, sellers will have to exterminate them. This typically costs a few hundred dollars but depends on the situation.

Suspect you have a pest problem? Here are a few places we recommend:

If you choose not to bring in an expert to take care of pest issues, you may not be able to find a buyer that’ll take on the project. But, there is a backup option. Investors that are willing to pay cash for homes typically buy the home as-is and many times sight unseen. It may mean taking a price hit, but it could allow your home to sell in the stickiest of situations.

7. Trouble with the Home’s HVAC System

Heating, ventilation, and air conditioning (HVAC) systems control the heating, cooling, and airflow in your home. They require regular maintenance in order to perform efficiently, in turn assuring the air quality in your home is healthy.

A study by the National Association of Home Builders says that an HVAC system typically lasts 15-25 years. However, certain components of the system can break or malfunction, which can compromise the air efficiency and quality, especially in old HVAC systems. A new unit can cost up to $6,000 plus labor costs, depending on the quality of the system.

Home inspectors will check to make sure all basic functioning of the HVAC system is in working order. These are some possible defects that may be reported.

• Dirty air filters
• Rust around unit
• Open seams in flues or slopes up to chimney connection
• Combustion gas order
• Cracked ductwork
• Asbestos

Having problems with your HVAC? Bring in an expert before the home inspector shows up and have them take a look. We recommend that you call:

Those Are the 7 Priority Items Home Inspectors Look For

National home sales have been failing at an increasing rate, from 1.4% in 2014 to 4.3% in 2016. If these major issues are found during an inspection, it can affect the price your house sells for and how long it’ll take to sell. Further, the complications can cause a buyer to back out of the sale.

Remember: there’s no such thing as a perfect house. Your home inspection will likely turn up something one way or the other.

With the help of a top real estate agent, you can negotiate the price to consider the cost to repair any issues uncovered by the home inspection, give the buyer credit to repair them on their own, or simply sell your house as-is for an all-cash offer.

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