How to explain an inspection report to your buyer

How do you explain a home inspection report to your buyer?

To explain an inspection report to your buyer, sort every finding into three buckets before you call: safety, systems that need a dollar figure, and everything else. Call before you email anything, and take the buckets in that order. Your buyer ranks the third bucket, not you.

Key takeaways

• Under International Association of Certified Home Inspectors (InterNACHI) standards, age alone is not a material defect. An old system that works is a price question.
• A line marked for further evaluation needs a specialist's written report or bid before the deadline.
• Inspector ethics codes require your buyer's consent to send you the report. Get it at booking.

How do you sort the report before the call?

Start with the report's summary if it has one, then check each section against it. InterNACHI defines a material defect as an issue that could significantly hurt the home's value or that poses an unreasonable risk to people. Risk to people is your first bucket. Value is your second.

Foundation movement shows up on a report as sheetrock cracks, brick cracks, out-of-square door frames and unlevel floors. An aging system goes in the second bucket, not the first. InterNACHI's standards say a system near or past the end of its useful life is not, by that fact alone, a material defect.

What is the biggest red flag in a home inspection?

The worst findings are the ones that put people at risk: gas, carbon monoxide, electrical hazards, active leaks and structural movement. Each goes to a licensed specialist before the deadline, before anyone talks about money.

If your buyer smells gas at the house, they should leave and call 911 or the gas utility from a phone away from the area. For suspected carbon monoxide, the Consumer Product Safety Commission says to get outside to fresh air immediately, then call 911. A licensed professional comes after that.

The Consumer Financial Protection Bureau names a cracked foundation as the kind of serious flaw that can make a buyer decide against the home. When you explain one of these, give the report page and read the inspector's exact words. The American Society of Home Inspectors (ASHI) code of ethics tells inspectors not to knowingly understate or overstate a condition. Hold your own summary to the same line.

Which findings need a specialist before you talk money?

Any line the inspector marks for further evaluation. ASHI's standard defines that as a look by a qualified professional, tradesman or service technician, beyond what a home inspection covers. The report can't close that question. The specialist's written report or bid does.

Book the roofer, electrician, plumber or structural engineer the day the report lands, so the bid arrives inside the window. Tell your buyer what the report is and isn't. InterNACHI's standards say an inspection is not technically exhaustive and will not find concealed defects.

How do you walk your buyer through the report on the call?

Call before you send a summary. A written list with no context leaves your buyer to weigh every line alone.

• Safety lines: the report page, the inspector's wording, the specialist you booked, and when the bid is due.
• System lines: the dollar figure and where it came from. Say no number out loud without a source behind it. Pricing inspection findings as a buyer's agent covers how to source each one.
• Everything else: ask what your buyer wants to raise, and take it in their order.

End the call with the next step named: a priced repair request, or a specialist bid first. When the request is ready, the buyer repair request letter template covers the wording.

What do you say when your buyer wants to walk over one finding?

Separate the finding from the deadline. Tell your buyer what the finding is, who can price it, and how long that takes against the date in the contract. Don't read the contract for them. Point them to the inspection contingency clause, and to their attorney for what the wording means in their state.

The consumer bureau lays out the choices. If repairs are needed, your buyer can negotiate with the seller over who makes or pays for them. If the contract is contingent on a satisfactory inspection, they have "the right to cancel the sale without penalty if you are not satisfied with the results of the inspection."

The lender may have a say too. For major repairs like a new roof, the bureau says "the lender can require that the repairs be made before closing." Have your buyer ask their loan officer before the request goes out.

Does the realtor get a copy of the inspection report?

Under InterNACHI's and ASHI's ethics codes, only if your buyer agrees. InterNACHI's code of ethics bars its inspectors from releasing inspection information to a third party without the client's explicit, prior written consent, outside safety and legal exceptions. ASHI's code also requires client approval before inspectors share results. Ask your buyer to authorize a copy to you when they book.

How often do buyers back out after an inspection?

The National Association of Realtors' REALTORS Confidence Index found 7% of contracts were terminated in the last three months. The index gives no reason for those terminations, so it is not an inspection figure. The same survey found 20% of buyers waived the inspection contingency. Whether your buyer should walk depends on their findings and their contract, not a national rate.

How do you know what the repair list is worth?

Add up the priced lines, and leave the specialist lines open until the written bids arrive. Kept prices every line of an inspection report for $79, usually under 4 hours, and marks the ones that need a professional quote. Kept's methodology shows how each figure is built.

Before your buyer's next call, upload the report to Kept and walk them through a priced list instead of a raw one.

Sources

• InterNACHI, Home Inspection Standards of Practice
• InterNACHI, Code of Ethics
• ASHI, Standard of Practice
• ASHI, Code of Ethics
• Consumer Financial Protection Bureau, Schedule a home inspection
• Consumer Product Safety Commission, Carbon Monoxide Information Center
• American Gas Association, Using natural gas safely
• National Association of Realtors, REALTORS Confidence Index