Among the most nail-biting periods during a home sale is the inspection. Needless to say, both parties to the transaction are a bit nervous: the seller, because the results may require costly repairs or price concessions; the buyer, if the dream house turns out to be more of a nightmare. If the seller has occupied the premises for several decades, chances are a few items will come up on the inspection report. Yet these will be minor issues if the owner has maintained the place in good condition. Otherwise, what is discovered may become bones of contention or even deal-killers.

What Makes Up a Home Inspection?

While individual state codes differ from one another in terms of particulars, the American Society of Home Inspectors issues general guidelines as to what every inspector should evaluate:

• The soundness and function of the central heating and air-conditioning systems
  
• The operation of the electrical and plumbing systems
  
• The integrity of the roof and the attic
  
• The stability of the walls, floors and ceilings
  
• The functional completeness of doors and windows
  
• The stability of the foundation and basement

Bearing in mind that no house is perfect, home inspectors must determine whether imperfections are more or less serious.

Results: Good and Bad

The inspection report begins with a summary and recommendations. Some defects -- a modest presence of mold spores, for example, is common to most houses so the inspector is more concerned about the extent of them as opposed to whether there are any. Likewise, finding a termite or two, especially in an older home, would not surprise a seasoned inspector but a larger contingent would be cause for concern. Paying for remediation and extermination depend on how big a deal the report makes of each issue. Key to inspectors' priorities are problems relative to health, safety and structural integrity.

Architectural Digest cites certain "red flags" that are less open to interpretation. Malfunctioning HVAC systems, furnaces, water heaters, etc. are big ticket fixes and are not usually overlooked by most buyers. Significant mold can point to interior leakage or obstructions in ventilation. Attic mold has been known to occasion a new roof. Even if no bugs are found, termite damage is regularly noted by inspectors. Additionally, water damage can cause foundational fissures. These flags are red because they yell "STOP!" to buyers. How sellers handle them determine whether the deal is stop-and-go or permanatly halted.

Handling a Negative Report

How should buyers and sellers respond to a home inspection that cites damage that is expensive to address? In large part, it depends on what a buyer desires in a house and what home values an appraisal reveals. If a purchaser is looking to move in and settle quickly, he or she might just walk away in search of a dwelling less riddled  with flaws. Yet if the location is optimal, the square footage accommodating and the floor plan pleasing, a buyer can still be compelled to follow through with the acquisition. Involving the realtor can salvage the transaction -- even after an unfavorable inspection report.

Defects uncovered by a home inspection are customarily the responsibility of the seller. The easiest -- though perhaps costliest -- thing to do is for the seller to make all the necessary restorations in order for the sales price to reflect  an appropriate home value. Alternatively, the seller could concede the estimated cost of repair to the buyer thereby lowering the amount the latter brings to the settlement table.