What Not (NOT!) to Put in an Inspection Addendum

It’s never smart for home buyers to overreach on Inspection issues, but a strong (and strengthening) Seller’s market is an especially bad time to do so.

Why?

magnifyingBecause any daylight between what the Buyer requests and what the Seller is willing to do gives the Seller an “out” (technically, the impasse causes the Purchase Agreement to be automatically cancelled, with both parties then supposed to immediately sign the appropriate paperwork).

Proper Scope; Material vs. (Very) Immaterial Defects

Instead, the proper scope of the Buyer’s inspection is, material defects that were discovered in the course of the Buyer’s inspection.

Or as I like to explain it:  if the Buyer and Seller can’t reach agreement on how to resolve the issue(s) and the deal goes away as a result, does the Seller subsequently have to change (amend) their Disclosure and tell future would-be Buyers?

If the answer’s “no,” the Buyer can forget about getting the Seller to fix it (or adjust the price for it).

I’ve yet to see a Seller Disclosure mention missing electric plate covers (which cost about $1(?), and take 30 seconds to install even by a klutz like me — never mind a “licensed electrician”).

P.S.:  For Buyers who just don’t think it’s right to “inherit” assorted handyman issues, I’d encourage them to:  a) lump together everything on a list; b) price it (e.g, 4 hours x $50 an hour for a handyman = $200); then c) psychologically add that $200 (or $400, or whatever) to the purchase price.

Unless the house costs less than $10k . . the amount is not going to be material.

See also, “How to Blow a Seller’s Good Will — and a $150 Closing Gift.”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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