"Does the seller need to fix this?" This is a common question I'm asked when I find defects at houses that I inspect, and the answer is always no. When I find defects during a home inspection (and I always find defects), there are four ways for the buyer to deal with them: Do nothing, have the seller do repairs, have the seller fund repairs, or cancel the purchase. I'm going to discuss these different options, and go over why some are better than others... in my opinion, of course.
Do Nothing. This is usually the best option for buyers. When buying a used home, buyers shouldn't expect everything to be perfect, because it never is. Walls get damaged, faucets leak, appliances age. This doesn't mean buyers shouldn't address defects after they've bought the house, but it's unrealistic to expect sellers of used houses to fix every little defect. Asking sellers to address a long list of minor repairs will often make the seller feel defensive about their home, make the buyers look petty, and make the home inspector get labeled ‘nit-picky'. Bad feelings all around :(. This typically comes from a misunderstanding of what a home inspection is for; home inspections are meant to allow the buyers to make an informed decision about their potential purchase, not to give sellers a long list of little repairs.
Ask The Sellers To Make Repairs. This is usually, but not always, the worst option. If a seller has performed improvements at their home and it was done wrong, why would they get it right the second time? When a buyer asks a seller to repair things, they are basically making the seller the general contractor for their new home. I don't think this makes any sense. The seller has no motivation to do high quality work, and I know from experience that the work is usually done wrong, or the work will be sub-par and the materials will be the cheapest possible. It's a very frustrating situation for buyers when I go out to verify repairs the day before closing and nothing is done right. What happens now? If the seller is going to do repairs, language should be included in the purchase agreement that requires licensed contractors to do the work, permits pulled and inspected by the authority having jurisdiction (the city), and proof of both should be given to the buyer well in advance of the closing date. Just about anything related to plumbing, electrical, or HVAC requires a permit, and much of the work performed by carpenters also requires a permit. This should be done for projects of any size; if a project is too small to require a permit, why have the seller do it at all?
Ask The Sellers To Fund Repairs. This is usually a much better option than having the seller do repairs. The buyer can hire their own contractors to do the work, and they can oversee the whole project after they own the house. This is definitely the most logical approach, but it doesn't happen as much as it should because emotions get in the way. Many home buyers have a mindset that they're not getting a good deal if they buy a house and need to do repairs right away, no matter what the price is... and family members help perpetuate this idea, especially fathers (I'll probably do it too someday).
Cancel The Purchase. This happens when the buyer decides there are too many problems with the house and they don't want to spend their time dealing with repairs, or when buyers and sellers can't come to an agreement. In most instances when a deal falls apart because of an inspection, it happens because neither the buyers nor the sellers are aware of a major problem, and the buyers don't want to spend their time and energy overseeing repairs.
Sometimes issues come up during an inspection where the extent of the damage or the cause of the problem is not always apparent, and these are times when a buyer should definitely not wait until they own the home to undertake repairs.
POST EDIT 3/4/09
I've received a number of comments that made me realize I wasn't clear about the question that buyers ask - "Does the seller need to fix this?" This question is typically asked by first time home buyers who confuse me with a code enforcement official. I always say "No" because I have no authority while performing private inspections. I can't make the seller do anything.
When buyers ask me "Should the seller fix this?", I recommend they ask their agent for advice. This isn't my realm, and I'm not in a position to give an educated answer.
Reuben Saltzman, Structure Tech Home Inspections