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How To Understand Your Real Estate Inspection Report

The only fun part of buying a new house is looking for a new house. Once you’ve decided on a house and had your offer accepted, the work begins. Part of the work is doing your “due diligence” is investigating the house and its condition. Your real estate inspection is part of that “due diligence” process.

Almost all buyers anticipate that there will be little to nothing wrong with the house they intend to purchase. They have visited the house and have gone through it and to their eyes, the house looked fine. But when you are buying a house, you are looking at how the house appears, the elevation of the house, the floor plan, where your furniture is going to go and does the house fit your lifestyle and needs. You’re not looking at the house critically. Nor should you. That is why you hire a real estate inspector.

My job is to break the bad news to you. Your new house is not perfect. In some cases, there may be major issues with the house. That’s not something that most buyers want to hear. So, how do read an inspection report and what information should you take from the inspection report?

I’ve been inspecting houses for over 35 years. I have yet to see a house that could not be “fixed”. It’s all a question of money. Specifically, whose money is going to make the repairs?

The results of your real estate inspection do not change any of the reasons that were important to you when you made the offer on the house. But the results of your real estate inspection do change the economics of deal. But that is all that has changed. You now have to determine if the price of the house, the cost of the immediately necessary repairs, updating the life/safety systems if you so desire and budgeting for repairs or for the replacement of aging equipment, systems or components that are likely to need replacement in the near future is within your budget.

More important than your budget, the question is how badly do you want the house? Is it worth the extra money to you? Can you afford the extra money? Should the seller make some, or all, of the repairs? If the sellers make some, or all, of the repairs can you then afford the house? What if the sellers won’t make any repairs? Sometimes, no matter how badly you want the house, the economics simply do not work. In that case, you may have to cancel the deal on the house. Sometimes, even if the seller is willing to make the repairs, the house is just too big a concern for you. In that case, you may want to cancel the deal on the house.

But, it is an economic equation. Not an emotional decision.

There is only one thing that matters once the economic decision is made. And that is how you feel about the house after you close on it. Even if you had to stretch your budget to the breaking point, when you pull up in the driveway and you’re happy to be home, the house was a good deal. No matter how much you paid for it.

If you pull up to the house and you’re miserable, it doesn’t matter if they gave you the house.

I’ve had clients buy houses that I really wouldn’t want my worst enemy to live in. They invested twice as much money in the house than the house was worth. But, it was worth it to them. They loved the house and they couldn’t wait to get to the home they had created in that house at the end of each day.

And that is really what this is all about. Making a house into your home.

When you read your inspection report, remember all the things that made you want to buy the house. Those things are still valid. Get the economics worked out and make the house into your home if you can. If you can’t, you’ll find another house. And you will still make a home.