Home Inspections in Wisconsin: Sellers, You Have the Right to Say No, But Are You Prepared for What Happens Next?

Let's talk about something that can make or break a real estate transaction: the home inspection.

As a real estate broker at Venture North Real Estate Co, working with buyers and sellers near Crivitz and across Wisconsin's Northwoods, I believe both sides need to understand their rights, their responsibilities, and what happens when an inspection uncovers problems.

One thing I always want my sellers to understand is this: you may have the right to say NO to repairs. But your buyer may also have the right to walk away. And sometimes that decision can cost you more than the repair itself.

In Wisconsin, the WB-11 Residential Offer to Purchase includes an inspection contingency that allows the parties to negotiate whether the seller has the right to cure defects.

If the seller has the right to cure and the buyer properly submits a Notice of Defects, the seller has an opportunity to correct qualifying defects under the terms of the contract.

But here is what some sellers misunderstand: having the right to cure does not mean you are required to make the repairs. A seller can choose not to cure. However, when a buyer has properly submitted a timely Notice of Defects under the standard inspection contingency, that decision can result in the accepted offer becoming null and void. The exact outcome depends on the contract and how the inspection contingency is handled.

A home inspection is not about expecting a 30-year-old home to look or function like brand-new construction. Buyers should expect normal wear and tear. But there is a difference between normal aging and a potentially significant defect. Consider these examples:

• Furnaces. An older furnace is not automatically defective. But a furnace that is unsafe, failing or not functioning properly is a different conversation.
• Roofs. An older roof may still have useful life remaining. However, active leaks, significant deterioration or documented damage can become serious concerns.
• Electrical systems. Outdated does not always mean defective, but unsafe wiring or hazardous electrical conditions deserve attention.
• Plumbing and water systems. Active leaks, failing components and significant water-related issues can create expensive problems.
• Foundations. Structural movement, significant cracks and water intrusion may require professional evaluation.

Age alone does not automatically make something a defect. Condition matters. And sellers, if you know your furnace is nearing the end of its useful life, your roof has ongoing issues, or another major system needs attention, be prepared to have that conversation.

Let's say your buyer's inspection identifies a significant problem with the furnace. The buyer requests that the issue be addressed. You say no. The buyer properly exercises their rights under the inspection contingency, and the transaction falls apart. Now what?

You may be putting your property back on the market, scheduling more showings, waiting for another offer, and potentially going through another inspection. And the next buyer may discover the exact same problem. Additionally, information learned during an inspection may create disclosure obligations that need to be addressed before moving forward with another buyer.

Sometimes spending money to resolve a legitimate issue is the better financial decision. Not always. But it is worth considering.

Now, let's be fair to sellers, too. A home inspection should not automatically become an opportunity to ask for every minor imperfection to be corrected. A loose doorknob, cosmetic wear, aging appliances or routine maintenance recommendations are not necessarily defects under the Wisconsin offer.

Buyers should understand the age, condition and price of the home they are purchasing. If you are buying a 40-year-old home, expecting everything to be brand-new is not realistic. The purpose of an inspection is to help identify property conditions, particularly those that could significantly affect value, safety or the expected life of the property. If you are shopping for a lake home or cabin, my post on the questions to ask before you buy a Northwoods cabin covers what else to check.

This is another important distinction in Wisconsin real estate. A buyer may propose an amendment requesting repairs, replacement or other negotiated terms. The seller can agree, decline or negotiate. However, a proposed amendment is not the same as a formal Notice of Defects.

A properly delivered Notice of Defects invokes the inspection contingency and the contractual process concerning the seller's right to cure. The paperwork, deadlines and wording matter.

Buyers cannot automatically terminate a contract simply because a seller declines a requested repair amendment. And sellers should not assume that rejecting a repair request always ends the transaction.

Before listing your property, take an honest look at its condition. If you have an aging furnace, a questionable roof, electrical concerns or another major issue, let's talk about it before a buyer's inspector does.

You may decide to repair something before listing, get a professional evaluation, disclose the condition, or price the property accordingly. There is not one answer that works for every seller. But being prepared puts you in a much stronger position when an offer comes in. If you are thinking about selling, start with selling your home.

A successful real estate transaction is not about the buyer winning or the seller winning. It is about finding a reasonable solution that allows both parties to move forward. Sellers have rights. Buyers have rights. And both need to understand that their decisions have consequences.

I have always believed that good communication, realistic expectations and a willingness to work through legitimate concerns can save a transaction that might otherwise fall apart. Sometimes the answer is to make the repair. Sometimes it is to negotiate. And sometimes walking away is the right decision.

But before you say NO to a significant inspection issue, ask yourself one question: if this buyer walks away, am I prepared to deal with the same issue when the next buyer comes along? That is a conversation worth having. If you are buying or selling in Crivitz and Surrounding Areas, get in touch and we will talk it through.

Kathryn Conard, Broker/Owner
Venture North Real Estate Co.
920-621-6719

Disclaimer: This article provides general information about Wisconsin residential real estate transactions. Inspection rights and obligations depend on the terms of the accepted offer. Consult your real estate professional or legal counsel regarding your specific transaction.