I had a deal fall apart after the home inspection today. That doesn’t happen to me very often. Even my home inspector says I know enough about houses that I rarely let a client get a bad one.
The one today had the usual mix of old house issues, but it also had some pretty big foundation issues. I looked it over good but I did not go in the crawlspace before we wrote the offer.
This got me thinking about what I usually tell people regarding when to walk away from a house.
In today’s case, I knew the seller well. This would have been the 7th house they have bought or sold with me. It was going to be their first rental property. The husband/buyer is like me in the sense that he wouldn’t be able to sleep at night knowing he had a house with an unfixed problem. He would want to repair it and do it correctly. That just wasn’t financially an option for investment property….I mean, the goal is to MAKE money!
I had another client that bought a house that needed a lot of work. He was buying it with the goal of fixing it up and selling it a few years later. The cost of the repairs meant that it didn’t really fit into his model of making money. We walked.
Another client had been looking for a very specific property. He picked the house that holds the title “Worst Home Inspection Report of ALL the Houses John Rice Has Ever Sold.” There was/is a lot for him to fix, but it was the only place he had found in years of looking that met his specific criteria for location and features. There was no back up plan for him. It was compromise his criteria/location or deal with the problems.
I had another client that almost walked away from a house. I told him that he should stay in the deal. The seller agreed to fix many things but the roof is needing replaced soon. I reminded him that while the roof is expensive, the house has new windows and newer HVAC…..and is on a the huge flat lot he wanted in the exact neighborhood he wanted to live in. There were more positives than negatives and he could not have found a house he liked as much that was equal in all ways PLUS had a new roof. We are closing next week.
It is tough to make the decision after a home inspection. I think there are really two questions to ask yourself: Can I find another house I like as much? Am I willing to take on whatever repairs the seller will not do? If you can find another house you like as much that will likely be in better condition, then walk. If you love the house and don’t think you can find a house you’d like as much, look at staying in the deal. Then, decide if the expense of the repairs is either worth it or even possible for you.
And keep in mind that there are no perfect houses. I have seen people walk away from houses against my advice only to find that the next house they had a contract on had 95% of the same problems.