An inspection may reveal an aging roof, signs of moisture, an electrical concern or repairs to plan. A problem does not automatically mean the seller must fix everything or that the buyer can walk away.
Key takeaways
- A report often contains many observations even when a property is generally sound.
- The buyer may accept the findings in light of the property’s age, condition and price.
- The parties may agree on a price reduction, specific work before closing, shared costs or another amendment.
Not every finding carries the same weight
A report often contains many observations even when a property is generally sound. Replacing caulking or cleaning a gutter is usually maintenance; signs of water infiltration, foundation movement or an electrical risk may require further investigation.
The goal is to understand the seriousness and urgency of the finding and its likely effect on the property’s value, revenue or expenses.
Proceed with the purchase or seek expert advice
The buyer may accept the findings in light of the property’s age, condition and price. The report can then serve as a maintenance plan after closing.
The inspector identifies visible indicators but does not necessarily price repairs. An electrician, roofer, engineer or other professional may need to clarify the issue and provide an estimate within the applicable deadline.
Renegotiate with the seller
The parties may agree on a price reduction, specific work before closing, shared costs or another amendment. The seller is not required to accept, and any agreement must be recorded clearly in writing within the applicable timelines.
A price reduction can sometimes be preferable to rushed seller repairs, but its effect on the down payment and financing must be verified.
Make the promise to purchase null and void
The OACIQ inspection clause provides an option when the report reveals a property-related factor likely to significantly reduce its value or revenue or increase its expenses. The buyer must act in good faith; a minor imperfection should not be used as a pretext.
The buyer must deliver written notice and a copy of the report to the seller according to the promise to purchase. Because each case depends on the signed documents, the parties should review their situation with their broker and, when needed, legal counsel.