Buying a home is fun, but it also comes with stress. After the house selection, the stages of making the offer, negotiations, and then, there is a home inspection.
A home inspection will identify various problems with the property, which will help you make a decision.
What decision, you might ask? The decision to walk away.
It’s not always pretty to do that. You might be emotionally tied to the house or lose your deposit if you pull out.
However, sometimes, it is better to simply let it go.
Let’s break down what might encourage you to walk out and when to walk away after a home inspection.
Can a Buyer Walk Away After Home Inspection?
Yes, a buyer can walk away after a home inspection. It is the most crucial of all the rights you have in the home-buying process. However important this is, it depends on the agreement, especially the contingency clause mentioned.
A contingency clause is a clause in your contract that lets you walk out of the contract without a penalty under specific circumstances.
There are different types, the most popular being the home inspection contingency. If the inspection report is unfavorable, you can ask the seller to repair or adjust the price, or if it is truly dreadful, you can back out.
Red Flags That Indicate It’s Time to Move On
When is the right time to walk away? Let’s learn the indicators that it is high time to part ways with that property.
Foundation Issues
Foundation-level defects are some of the most complex and costly to correct. Warning signs of such problems may include doors and windows that do not shut well, creaky floors, or fissures in the foundation. If the home inspector points out these issues, it is decision time: Is it worth fixing?
Why Walk Away?
Repairing the foundation can cost thousands of dollars, sometimes beyond. It’s just too expensive or cumbersome to fix.
Large Scale Plumbing or Electrical Issues
Wouldn’t it be a tragedy for the new homeowners to find out that the plumbing is old or there is a problem with the wiring? They can be costly, hazardous, and time-consuming to complete.
Anything seriously wrong with plumbing or wiring can lead to fire, internal flooding, and other hazards. You should think twice before proceeding.
Why Walk Away?
Fixing a leaking pipe or a problem in the electrical wiring system demands much effort and pricey materials. If the seller is not doing any repairs, it might be best to consider finding another home.
Mold Or Water Damage
While mold and water damage are not always apparent, home inspectors know where to look for signs of potential major issues. Mold formation is unfavorable for your health. Most importantly, it can also affect the structure of the house in the worst-case scenarios.
Why Walk Away?
If the mold or water damage is widespread and present in critical sections, such as the roof, attic, or basement, consider walking away for your health’s sake.
Roof Problems
Roof replacement is generally a costly and lengthy exercise. If, for instance, the inspector notes things as missing shingles, leakages, or any signs of aging, it may be a signal to walk away.
Why Walk Away?
A roof replacement costs thousands of Dollars depending on the house’s size and roofing type. If the seller does not agree to fix it or change the price, it may be better to back out and avoid a potential problem.
Pest Infestation
If a home inspector discovers heavy pest infestation, including termites or rodents, it may be a good reason to leave. Termites can inflict serious harm on the very foundation of the home. You must spend a lot of money to get rid of these pesky pests.
Why Walk Away?
Pests can cause significant damage to homes, especially to wooden structures and other materials. If the problem is not corrected early enough, it may lead to home instability in the long run.
What About The Earnest Money When The Buyer Walks Away?
Earnest money is the amount you give to the seller when offering to buy their house to show that you are serious. Now, should you choose to back out after the home inspection, the fate of your earnest money can be determined by your arrangement.
- If you have an inspection contingency: You get your earnest money back because of major defects discovered during the inspection. It is to allow you to cancel the deal without a penalty.
- If there’s no contingency clause: Your earnest money may be forfeited if you change your mind following the inspection report.
You should always ensure that you have carefully reviewed the purchase agreement and understood the contingencies mentioned therein. An experienced agent or lawyer can see that you are fully protected.
Negotiating Vs. Walking Away
The inspection report might reveal some factors you could use as bargaining chips. Here are a few options you can consider:
- Request Repairs: If the inspector finds minor issues, you can ask the seller to rectify them before the deal is closed. If the seller agrees, you might proceed.
- Negotiate a Price Reduction: If the seller does not agree to make certain repairs, you can ask for a lower price to cover future repairs.
- Ask for a Credit: You can appeal to the seller for a credit on the closing date. You could undertake the repairs yourself after the seller agrees to the credit.
Wrapping Up
It is not easy or pleasant to back off from a deal after a home inspection, especially when the house catches your fancy. However, when the inspection report reveals severe structural problems, dampness, or the need for extensive repairs, it becomes necessary for you to take a step back.
Exactly when to walk away after a home inspection depends on the severity of the problems found and the terms of your agreement. If you are not sure about something, ask your real estate agent or a lawyer to explain.
If you are considering buying a new home, why not get it inspected by Total House Inspection before signing the deal?
We offer quality inspection services so you can make the right decision when it comes to buying a house. Our inspectors can discover potential problems that remain hidden from you.
We want to protect your investment and set your mind at ease.
Call Total House Inspection now for your appointment, and we will make sure your new home is just what you want it to be.
