What Fixes are Mandatory After a Home Inspection?

The inspection process can be one of the trickiest aspects of the home sale process for the buyer and the seller. When the home inspection report reveals unexpected issues, home repairs and negotiation breakdowns can make sealing the deal a bit more complex.

At the heart of many of these failed deals could be a misunderstanding about which fixes are mandatory after a home inspection and which aren’t. Is a leaky roof or sliding foundation the seller’s responsibility or the buyer’s? What about damp, moldy basements, peeling paint, and broken appliances?

Whether you’re buying or selling, having a clear understanding of what repairs are required—and who’s required to pay for them—can make the entire process easier, ensuring that the sale is seamless for everyone involved. Here’s what you should know.

Common Home Inspection Issues

Although there aren't any mandatory repairs that homeowners are legally required to make, property issues, particularly structural issues, are often points of negotiation when it comes to finalizing home sales. For that reason, it's helpful to know what types of repairs home inspections are likely to turn up, whether you're selling your house or shopping for a new one.

In general, a home inspection will turn up two types of issues.¹ Those issues will concern aspects of the property’s…

• Livable conditions – These issues factor into determining whether a home is safe for occupancy. Dangerous molds, lead paint, or faulty wiring are just a few examples of issues in this category. 
• Cosmetic conditions – Other issues that a home inspection may turn up may be nice to have, but they aren’t crucial, and they’re rarely the responsibility of the seller. In most cases, buyers may have a hard time convincing sellers to address issues like cracked tiles, peeling paint, or foggy windows, as they are not considered a mandatory fix.² 

What Repairs Will Buyers Request?

As stated above, the list of what fixes are mandatory after a home inspection is pretty short. In most cases, sellers are not legally required to make any repairs. But that doesn't mean that buyers can’t, won’t, or shouldn’t ask for certain repairs to be made before closing the sale. In many cases, agreeing to make certain necessary repairs can be in the seller’s best interest, especially if those repairs threaten the home’s value. 

For that reason, it’s important for both buyers and sellers to understand what kinds of home inspection repairs are rightfully within the seller’s responsibilities according to residential real estate etiquette, even if they aren’t required by the law.

Generally, sellers are not likely to take responsibility for cosmetic issues. On the other hand, some larger problems with more extensive and expensive inspection repairs should be taken care of by the seller. In those cases, the seller either agrees to pay for the repair before the deal is finalized as outlined in the purchase agreement or the parties come to an alternate conclusion on how to handle these common repairs.

Potential buyers are not likely to agree to a sale if the home has an issue such as:

• Mold or water damage
• Pest or wildlife infestations
• Fire or electrical hazards 
• Toxic or chemical hazards
• Major structural issues 

Additionally, if the home has code violations or is in violation of any local building codes, buyers will generally ask that those violations are addressed by the seller.

Do Mortgage Lenders Require Repairs?

Legal requirements notwithstanding, repair requirements can be determined by the conditions of a buyer's bank or mortgage loan. Most lenders will include certain requirements to protect their investment and ensure the home seller meets these conditions.

This is especially true if you’re buying a house using a loan funded or guaranteed by the Federal Housing Administration or the offices of Veterans Affairs, both of which tend to have much stricter requirements than a conventional bank loan. 

The FHA has fairly strict standards when it comes to what fixes are mandatory after a home inspection. The FHA's repair requirements include a reasonable repair request:³

• Health and safety issues – The FHA will not guarantee a home loan if the property presents significant health and safety issues, like mold or fire, electric, or environmental hazards.
• Property security issues – Homes must be reasonably secure in order to qualify for a loan through the FHA. For example, certified home inspectors will check to make sure that all windows open, close, and lock properly.
• Structural soundness issues – The condition of the foundation, roof, attics, and crawl spaces are all important matters of concern for FHA-backed loans. Additionally, the structure must be free of active termite infestations and structural defects at the time of sale.

Meanwhile, VA loans have their own standards, known as “Minimum Property Requirements.”⁴ The included requirement

• Proper utilities – The property must provide suitable utilities, such as electricity and running water. Additionally, it must have a heating system that can ensure indoor temperatures of at least 50°F.
• Structural soundness – The VA requires that homes are well-maintained at the time of purchase. The roof must be in good condition and there can’t be any signs of termite infestations.
• Basement and crawlspace concerns – Basements and crawl spaces must be free of moisture and associated water damage. Crawlspaces must be unobstructed and clear of debris. 
• Safety hazards – The VA inspects for a range of safety hazards, from improper wiring and exposed stairways to lead paint. 

When it comes to conventional loans, repair requirements vary from lender to lender. In almost all cases, health and safety issues are prioritized. That includes structural soundness, mold and water damage, electric issues, and other high-cost complications. 

That said, conventional lenders typically have fewer repair requirements than either the FHA or the VA. Additionally, a private lender may be more willing to negotiate common repairs for price reductions or other solutions.

What Are Common Inspection Issues?

During most sales, homes are inspected twice. Usually, the property is appraised before the house ever goes on the buyers market. Then, there’s usually a second appraisal during escrow that’s arranged by the potential buyer. 

Hopefully, by the time the buyer performs their home inspection, major structural issues and other large concerns have already been addressed. That said, these inspections are still likely to turn up a range of smaller issues that the home buyer may want to negotiate as part of the sale. 

It’s hard to say what any given inspection will turn up. The condition of the property, the year of its construction, and what areas the inspection covers can all play a part in what the final home inspection report looks like. But some of the most common issues concern things like:¹  

• Heating, air conditioning, and ventilation
• Plumbing, especially with regard to water pressure
• Faulty appliances
• Minor roofing issues
• Improper drainage 

Who Decides Who Pays?

The question of what fixes are mandatory after a home inspection is often quickly followed by the question, who decides who pays for those fixes? 
The answer? Both the buyer and the seller.

Negotiation is at the heart of any real estate deal, from the tiniest cottage to the tallest skyscraper. While small cosmetic issues might not factor in, bigger structural faults or safety hazards might be worth haggling over, if you’re the buyer, and worth being prepared to pay for, if you’re the seller.

In both cases, knowing how to negotiate repair costs can streamline the process and make sure you reach a deal that satisfies both sides. Whether you're buying or selling, you can become a master negotiator by familiarizing yourself with the following smart ways:

• Hire a real estate agent – Having a knowledge expert on hand is always helpful, whether you’re buying or selling. Real estate agents will know which repairs each party should expect to pay for. They’ll also have ideas about how to resolve disagreements.
• Know your deal breakers – As a buyer, you should be firm about what specific repairs you aren’t willing to budge on. As a seller, there may be repairs you refuse to pay for. Don’t be afraid to stand your ground, if it’s reasonable.
• Explore alternatives – Sometimes, a seller will offer a price reduction or credit in lieu of paying for repairs. In theory, the buyer can use the savings to fund the repair in the future.
• Do your repair research – Buyers and sellers alike should familiarize themselves with the average costs of repairs after a home inspection that home buyers often negotiate. Also, be sure to check how long home inspections take.

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Sources: 

1. Ownerly. What Fixes Are Mandatory After a Home Inspection? https://www.ownerly.com/real-estate/what-fixes-mandatory-after-home-inspection/

2. Family Handyman. 9 Repair Requests Buyers Should Not Ask of Sellers. https://www.familyhandyman.com/list/9-repair-requests-home-buyers-should-not-ask-of-sellers/#

3. NerdWallet. FHA Appraisal Requirements for Homes. https://www.nerdwallet.com/article/mortgages/fha-appraisal-requirements 

4. Military.com. A Look at the VA Loan Appraisal Process. https://www.military.com/money/home-ownership/buying-a-house/a-look-at-the-va-loan-appraisal-process.html 

5. Credible.com. How to Negotiate After a Home Inspection. https://www.credible.com/blog/mortgages/negotiate-after-home-inspection/