Inspection Contingencies Are Back

Rates finally move a hair, you fight through showings and offers…then the whole thing dies because of a bloody inspection report.

Nationally, roughly 16-18% of contracts are getting canceled right now, and inspection/repair fights are the top reason.

On top of that, about 70%+ of buyers are getting full inspections again; only a small slice are still waiving them, even in competitive markets. (aside, that small slice of folk not getting inspections are not using their brainpower – do not purchase a home without an inspection, even a new one).

Translation: inspection drama is baked back in. You can ignore it, or you can play it like a grown up.

And yeah, inspection periods are fraught with emotion. Let’s be ready for that and in the words of Jules to HunnyBunny:

“Come on Yolanda what’s Fonzie like?”
“Cool?”
“What?”
“Cool.”
“Correctamundo. We all gonna be cool”

Lets all go into our inpection period expecting some broken stuff and lets give to get……

If you’re selling: stop listing blind.

If you list first and “see what the inspector says,” you’re gambling your time, your sanity, and your low rate handcuffs on a 100 page PDF from a guy being paid to find fault with your home.

Here’s how not to be that seller.

Radon – Cheap grenade to defuse

In Colorado, radon is normal and fixable, not some death sentence. Go spend roughly 150 bucks on a radon test. If it comes back high, put the system in; it’s usually 1,500-2,500 dollars depending on the house.

You’re going to have to deal with it anyway, so handle it up front and take that grenade out of the inspection report. The fewer real issues in that report, the easier it is on everyone’s emotions when we sit down to respond.

And yeah, inspection periods are fraught with emotion.

Roof – if it’s not new, be prepared.

Our sun and hail chew roofs for breakfast. If your roof is 15+ years old, assume it’s going to be a thing. Have a reputable roofer look at it now and get a 5 year certification if it qualifies, or be mentally and financially ready to negotiate when the inspector flags it.

That buyer may be your only buyer in this rate environment, don’t lose them because you didn’t want to accept that a 20 year old roof is, in fact, 20 years old.

Drainage/grade – don’t let “moisture near foundation” kill you.

Half the “foundation concerns” I see start with water going where it shouldn’t. Fix your grading, extend downspouts, clean gutters.

This is HS kid with a shovel and a couple loads of soil money, not structural engineer money.

Because here’s what happens: the inspector writes “moisture near foundation,” every buyer’s dad turns into a foundation expert, and suddenly they want to walk over a 1,000 dollar fix.

I’m a dad too, I get it, but don’t let someone’s father blow up a solid deal over something we could’ve handled in a weekend.

Sewer – no “my guy vs your guy” bullshit.

This is the 15k surprise neither buyer nor seller wants. A professional sewer scope here is a few hundred bucks. If the line is toast, you need to know before you list so we can price accordingly or we decide you’re selling next year, not this year.

What you do not want is a subjective mess: “my plumber says it’s fine, your plumber says it’s bad.”

Get objective video before we go live, then we control the story instead of arguing about it mid contract.

HVAC and big systems, plus a warranty.

Aging furnace, AC, boiler, electrical – these are the other big ticket items that freak buyers out. Get them serviced and evaluated now so we know whether we’re talking minor maintenance or a five figure problem.
Then we throw a legit home warranty on the deal for year one.

I put a warranty on every sale and every buy my clients do, on me, because it gives nervous buyers fewer reasons to freak out and start asking for the moon.

This warranty covers the seller during the listing period and the buyer for year from closing. It’s worth it to me to provide at least some level of protection for both parties on systems.

The disclosure conundrum, that is not really a conundrum. It’s a given.

Quick legal-ish note: in Colorado, if we discover a real problem in these pre listing checks, we don’t get to pretend we didn’t. We have to disclose material defects.

That sounds scary, but here’s the trade: finding it early means we control the story, we get to price the home correctly, repair it on your timeline, or offer a clean credit that keeps the deal together.

Letting the buyer’s inspector “discover” it halfway through the contract is how you end up shocked, defensive, back on the market, and now every future buyer asks, “So why did the last deal fall apart?”

This is not a question your listing agent wants to answer.

If you’re buying: stop nuking good houses over 500 buck stuff

On the buyer side, people blow up good houses over stupid stuff, then shrug at the 20k landmines.

Stuff that’s a legit big deal:

All bad stuff.

These are the things we negotiate hard on or walk away from.

Stuff that’s normal “this is a house, not a spaceship” life:

Missing GFCI outlets where they should be. Annoying, easy, a few hundred bucks.​

Older but functioning furnace or water heater that just needs service and a realistic life expectancy talk.

Cosmetic cracks, caulk, paint, sticky doors, little handyman items the inspector lists so the report looks thorough.

Houses break. Even new ones. If you let every minor line item send you into panic mode, or let your dad or your buddy who bought one house in 1997 declare “this place is a piece of shit” because of a small list, you will absolutely talk yourself out of good houses.

And in this rate world, if you finally get unstuck from your 3% prison and find something that actually works for your life, it is insane to let a 1,500 dollar punch list send you back to scrolling Zillow on the couch.

Bottom line, inspection time is fraught with peril because it’s filled with emotion.

Agents have had deals die on inspection, they might be edgy.

Sellers DO NOT, or shouldn’t want to lose a pending status over an inspection.

And buyers would be wise to have a modicum of calm going into them. Again, used houses are living breathing organisms and they need CONSTANT upkeep.

It would be good for all parties to assess a 2500 or 5000 dollar repair vs the selling price and decide how much that affects your peace of mind over the next 7-10 yrs.

If you’re selling, the move is simple: spend a little, find the real problems before the buyer’s inspector does, and deal with them on your terms.

If you’re buying, learn the difference between normal house quirks and the handful of things that should actually blow up a deal.

If you’d like me to tackle this topic more specifically, I’ll tell you, straight, what I’d actually worry about on a property and what’s just noise.