Under a real state contract,what are the remedies if the home inspection does not pass?

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M.P. Ossa eNotes educator| Certified Educator

According to the American Society of Home Inspectors, the process of inspecting a home is a process where a third party, preferably an ASHI member is hired (by either seller or buyer) for a fee to professionally observe and test every element of the home to guarantee that the house is in a safe condition. Yet, ASHI is also clear in that there is NO such thing as a "failed" home inspection and that anything and everything in the housing market, happily, has a solution.

A professional home inspection is an examination of the current condition of a house. It is not an appraisal, which determines market value. It is not a municipal inspection, which verifies local code compliance. A home inspector, therefore, will not pass or fail a house, but rather describe its physical condition and indicate what components and systems may need major repair or replacement.

Moreover in real estate, particularly in the low-range housing market, the seller of a home is not under any obligation to fix anything regarding the property. In fact, many sellers are willing to sell way under the original amount that they paid for as long as they list the property "as is". This is usually done when the seller is in a serious need to get rid of the property for quick profit. This also benefits the so-called "flippers" or real estate purchasers who buy homes "as is", then fix them, and then sell them for their full price after repairs have been done.

Your question suggests that the property is already "under contract". If this is the case, one of two things may have already happened:

  • the seller listed the property but did not list that it was "as is".
  • the buyer did not do enough research to see whether the house was under optimal condition
  • the buyer did not hire a third party inspector to conduct an inspection PRIOR to signing the contract.

If this is the case, the blame lies on the buyer's part, though some states have state laws that fix seller responsibility for a stated length of time. However, everything is negotiable. When contacting the seller, both parties (seller/buyer) can reach an agreement on who pays for what. Still, the seller is under no obligation to do anything except to sell. Hence, legal advice might be sought to release the potential buyer from the contract. Nevertheless, real estate is one of those fields where anything goes and if a buyer simply wants to walk away from the contract, he walks away and nothing will come as a result of it.

Now, when it comes to hazardous issues such as mold, asbestos, a faulty foundation, bad roofing, plumbing, electricity problems, and even issues with the neighborhood, anyone with common sense would know that you have to research prior to buying. It is no different than buying any other life-changing or life-enhancing thing. You wouldn't buy a car without running a check first. Same thing with housing.

Included with this answer is a link to the American Society of Home Inspectors, where you can get much more information regarding your home inspection needs. Enotes also offers a reference guide regarding real estate which is also included.