Categorizing Inspection Findings

Category 1: Must Address

Items that affect the buyer's ability to obtain financing or that represent genuine safety hazards. Lenders frequently require correction of: structural deficiencies (foundation damage, roof failure), electrical hazards (double-tapping breakers, knob-and-tube wiring in active use, missing GFCI protection in required locations), plumbing failures (active leaks, failing water heater, non-functional fixtures), and failed mechanical systems. A failed or non-compliant septic system is typically a must-address item for financing eligibility in Wisconsin. Addressing these items before negotiation starts the conversation from a position of strength.

Category 2: Worth Negotiating

Items that are real deficiencies but not financing deal-breakers — issues a reasonable buyer would want addressed and that represent real value. Roof at the end of its useful life (but not actively failing), outdated HVAC approaching replacement timeline, significant moisture in the crawl space or basement, and well water quality issues are common Category 2 items in Juneau County transactions. These are worth addressing through repair, credit, or price reduction to preserve the transaction.

Category 3: Reasonable to Decline

Cosmetic items, routine maintenance observations, items that reflect normal wear for the property's age, and items the seller disclosed in the condition report that the buyer presumably knew about when they wrote the offer. Sellers are not required to bring an old house up to new construction standards. A buyer who requests repairs for every item the inspector noted — including caulking around a tub and an exterior light switch cover — is testing leverage, not presenting legitimate repair demands.

Repair vs. Credit vs. Price Reduction

Repair

Repairs completed by the seller before closing eliminate the issue from the transaction. The advantage: you control the quality of the repair and eliminate uncertainty. The risk: buyers may not trust seller-completed repairs on significant items and may want receipts from licensed contractors. For major mechanical items, licensed contractor repair with documentation is the most defensible approach.

Closing Credit

A closing credit gives the buyer money at closing to address the issue independently. The advantage for the seller: no contractor scheduling, no repair management, and a clean close. The advantage for the buyer: they control the repair. The credit appears on the closing statement as a seller contribution to buyer closing costs or as a purchase price adjustment. Credits are often the most efficient resolution for items where both parties prefer the buyer to control the outcome.

Price Reduction

A formal reduction in the purchase price reflects significant issues that cannot be resolved through repair or credit mechanics. Less common than credits for individual inspection items — more often used when the scope of issues found exceeds what can be addressed through a credit without renegotiating the entire purchase price.

The Negotiation Tone Matters

Post-inspection negotiations set the tone for the remainder of the transaction. Sellers who respond defensively or dismiss legitimate findings create adversarial dynamics that can poison the closing process. Sellers who review findings honestly, acknowledge legitimate items, and propose fair resolutions consistently have smoother closings and better outcomes. The inspection is not an attack on your home — it is a standard step in a transaction that you want to close.

When to Consult Your Agent

Castle Rock Realty reviews every post-inspection repair request with the seller and provides specific guidance on which items are standard to address, which are negotiating leverage, and what a fair resolution looks like based on the current market and the specific buyer profile. Do not respond to a repair request without this conversation — the response strategy matters.

Frequently Asked Questions