A home inspection is an essential part of any home purchase or sale. Before the buyer pays the purchase price, he must be sure that the property isn’t a money pit or has any unsafe structures. The seller should understand the home inspection process to avoid any potential problems and ensure a high-dollar sale price. What happens during this mysterious inspection? And what should you do if there are red flags?
Beware of the Buyer!
British common law provides the legal framework for selling and buying real estate. It operates under the caveat emptor doctrine, meaning that the buyer should be aware. Caveat emptor is the principle that the buyer must inspect the property before closing. The seller does not have to reveal any information, good or otherwise, about the property that he is selling.
This is a simplified view. State law has intervened over time to reduce the caveat emptor doctrine. Most sellers now disclose information about the property. This includes details such as the date and time the furnace was last serviced. Federal law requires disclosures about harmful substances like mold and lead paint.
Problem with disclosures is that sellers only have to disclose issues that they actually know about. Sellers don’t have to look at the roof or dig into the foundations in order to find problems with their property. Most sellers won’t spot any problems, even if they are obvious to the naked eye. 84% of homebuyers hire a professional inspector to inspect the property.
How It Works
Inspections are usually completed within five to ten days after you sign the contract. A home inspector will visit the home of the seller, sometimes with the buyer in tow. They will spend about two to three hours inspecting it. Here is a brief summary of the inspection’s goals:
* A home inspector inspects the property. He inspects the structure of the house and any other components and notifies the owner of any mechanical or structural problems. He will open closets, turn on the faucets, run washer, and walk through the basement.
* He won’t open walls or check for radon, noxious substances or verify that the house is compliant with building codes. The inspector is not going to verify that the house is legal and is worth the money it is being paid for. The inspector only cares about the “big picture” view — safety and function of the home’s parts.
* The American Society of Home Inspectors issued guidelines that outline what inspectors must inspect and how they should report their findings. Although ASHI-certified inspectors must follow the ASHI code, many states have adopted ASHI’s guidelines for home inspectors. A home inspector’s report will usually cover the following components: heating and cooling systems, electrical systems and plumbing.
* Additional services offered by inspectors include radon testing and mold testing.
What happens if an Inspector finds a problem?
The home inspector will complete his inspection and prepare a professional report that includes color photos. Reports can be as long as 20 pages or 30 pages. The home inspector will write a report detailing any problems. The inspector will identify any defects that must be fixed immediately, as well as minor issues that could lead to more severe conditions later on. The inspector might recommend further action if he finds a defect not obvious from the inspection.
Remember that the homeowner who hired the home inspector is the one responsible for his work. This person is usually the buyer. The seller might be the first to know about potential problems that could disrupt the transaction. Although it may sound unfair, most states have enshrined the concept of client privilege which prevents the home inspector from disclosing any findings to anyone other than his client.
There is no perfect home, not even new construction homes. The chances of a home inspector finding something are high. The buyer must decide what her plans are to do and how serious they are before closing.
Home Inspection Conditions in the Sale and Purchase Contract
A standard purchase offer usually includes one or more inspection-related contingencies. Sellers will generally accept a home inspection condition as few buyers (and no mortgage company) will waive it.
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To protect the buyer, a home inspection contingency is in place. The buyer has five options if the inspection uncovers any problems. It all depends on the language of contingency.
* Approve the Report and Move towards Closing
* Cancel the contract to have his earnest money refunded
* Request the seller to make the repairs before closing. The deal is finalized if the seller agrees. The buyer may cancel the contract if the seller does not agree.
* Ask for a credit at the closing or adjust the price to cover repairs. This allows the buyer to make the repairs after the closing. This is a great option for both buyers and sellers, as there is no dispute about the repairs being made or whether they were done correctly. A repair credit can also ensure that the sale of your home will close on schedule. A few contracts allow for an automatic credit for repairs up to a certain value. For example, $1,000 or a percentage of the purchase price. If the seller doesn’t approve, the buyer can cancel the contract.
* To allow the buyer to carry out additional inspections as recommended by the report, extend the inspection contingency.
The standard home inspection contingency provides a way for the buyer to end the deal if she wants. The buyer should usually give notice to the seller and a copy of the inspection report detailing the areas of concern. The seller can then address the issue before listing the house for sale.
Home Sellers Advice
A home inspection in Henderson NV, like any other contingency allows the buyer to cancel the deal if there are significant problems. A home inspector is a smart thing to do as a seller before listing a house for sale. This will prevent any unpleasant surprises later. You can hire an inspector before closing so that you have the time to correct any issues.
The Final Word
For both sides, the best advice is to check your ego at each door. A home inspection is an information-gathering process. It is not about getting a huge discount on the purchase price, or pushing for a home sale transaction if the property requires more work than the buyer anticipated. Understanding that repairs are part of everyday life is important. Be open to compromise and your deal will go much faster and more fair for all.