How to Decipher a Home Inspection Report So Small Issues Don’t Turn Into Big Bucks

Here’s everything that you can expect to find within the inspection report for your house.

1. General information about the house and the inspection conditions

The first few pages of the report introduce the property address, information about the inspection according to the state’s standards of practice, home inspector information, and a comment key or definitions.

The home inspector will provide information to help the buyer (or seller if it’s a pre-inspection) understand what each different element of the report means. They’ll give a key of symbols or codes, which they’ll use throughout the report to identify the severity of each issue.

For example, most home inspection reports will include but are not limited to a variation of the following codes:

• I = Inspected. This item was inspected.
• NI = Not Inspected. This item was not inspected.
• NP = Not Present. This item was not accessible or locatable.
• S = Safety Concern. This item poses a safety concern and should be addressed immediately.
• R = General Repair. This item requires repair but is not causing immediate harm or damage.
• D = Defect. This item is non-functioning and requires repair or correction by a licensed tradesman.

The inspector will also include the weather conditions on the day of the inspection, who was present, and what areas were inaccessible.

2. A detailed assessment of systems and components

The grunt of the report covers every inch of the property, from the branches around the exterior to discoloration in the corner of a ceiling. This is where you’ll find the most detailed information about each issue, why it’s an issue, and the inspector’s recommended course of action.

“Anything and everything that has anything and everything to do with the house, we observe and evaluate and then report on,” says Hirsch. The main priority of the home inspector is to look for things that affect the overall function and safety of the home.

“The roof, the HVAC system, the A/C system, electric and plumbing are the top things they’ll look at. In addition, termites and wood destroying organisms are things they’ll also look for,” says Day.

Since a home inspector isn’t a qualified, licensed expert in each home system, they can’t speak to the specific action that is necessary for each individual issue. However, they will point out which observations pose a safety concern, create more damage, or need basic repair.

3. Annotated pictures of reported problems

When an inspector spots an issue, they will take a photo to document it in the report.  The buyer and their real estate agent will refer to the photos when they review the inspection report and prepare negotiations.

“They should include photos of the home and the defects found,” says Gromicko.

They’ll also use a thermal imaging radiometer to survey portions of the interior and exterior of the structure. This is used to indicate issues with moisture, electrical components, ventilation, or insulation.

If an issue needs to be repaired, the homeowner, buyer, or a hired professional can look at the photo and immediately identify it. Following any requested repairs, the photos serve as a reference to make sure the task was completed.

4. Summary and rating for each issue

In the last pages of the report, you’ll find a summary of the identified issues accompanied by a symbol or rating. It makes it easier to refer back to a reported issue without having to dig through dozens of pages.

The summary is important to refer to during negotiations. Safety concerns and defects give the buyer more negotiation leverage, whereas general repairs are a lower priority.

How to analyze a home inspection report for negotiations

Once the inspection is complete, the buyer will receive the report and determine their next move. Depending on what the home inspector reported, a buyer could drop out of the sale completely, reconsider their initial offer, request repairs or repair credit, or (in rare cases) move forward without any action.

Unfortunately, unless you pay for a pre-inspection, the buyer is the only one who receives a copy of the home inspection report. However, since the buyer will use statements in the report as leverage for negotiations, they’ll often provide a copy of the section to support their requests.

You can request a copy of the home inspection report, but it’s up to the buyer to decide whether or not they want to give it to you. After all, they did pay for it. In the event that the buyer walks away from the sale completely, they’ll often hand the report over so you can make the fixes that sent them running in the first place.

There are ways to prepare and things to keep in mind to help you negotiate the home inspection report without actually seeing it for yourself. Here’s what you can do while you await your fate.

Be ready for negotiations

It’s virtually impossible for a home inspection report to come back clear of issues. Expect there to be at least some defects listed, some that matter and others that are more or less inconsequential. To get through the negotiations with your pride, dignity, and profit intact, work with a real estate agent who is an experienced negotiator and has a prepared strategy for post-inspection setbacks.

“The buyer would either walk away or renegotiate the contract, i.e., they would either ask for repairs to be done or get a repair credit. There will definitely be back and forth in that situation,” says Day.

Be present for the inspection

Anyone is allowed to be present for the inspection. Day says he always goes to the inspection and recommends his sellers do, too. It’s your chance to ask questions and get details on whether issues are severe or minor.

“If I’m working with the seller, I know exactly what he’s looking at, and I can either rebut it or find an expert to look at it,” he adds.

Get estimates from trusted professionals

Before you issue repair credits to the buyer or take on a repair project, get a second opinion and a free estimate from a trusted professional. Day recalls a sale he worked on where the home inspector noticed an issue with the electrical panel.

“I had my electrician go out there and look at it. He goes, ‘There’s nothing wrong with this. The parts are still readily available and it could last another 10-20 years,’” Day says. “We were able to squash that problem just by having our own experts.”

Inspectors are human; they make mistakes. If they see something that looks like a safety concern, they are going to write it in the report. It’s up to you to hire a professional to confirm the extent of the issue.

Avoid the stress of the unknown with a pre-inspection

The home inspection is one of the most stressful parts of a home sale, mostly because you don’t know how it’ll turn out.

“The week or two after a property goes under contract can, unfortunately, be pretty nerve-racking,” Day says. “If it’s being financed, you wonder if it’s going to appraise, if the issues are going to be expensive to repair or not and whether the contract will stick together. That’s why, going back to get an inspection prior can make the whole thing a lot less stressful.”

While you’ll have to disclose the issues that turn up in a pre-inspection, you can price your house accordingly. Buyers know upfront what they’re getting into, and you can save a lot of time towards the end of the sale.

Navigate your home inspection with confidence and seal the deal

Selling a home can often feel like stepping into the unknown, especially when it comes to the home inspection phase. By understanding what goes into a home inspection report and how to navigate its findings, you’ll not only equip yourself to handle negotiations more effectively but also pave the way for a smoother transaction.

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