Home Inspection 101
Real Estate is purchased backwards. A prospective Buyer will view a property. If the Buyer likes the property, his or her Realtor will submit a Purchase Contract. If the Buyer's offer is accepted, the Buyer will then get to inspect the property.
Per Section J-1 of the Purchase Contract, the Buyer will have so many days (from acceptance) to inspect the property. Here are three things you should know about your home inspection:
Hiring A Home Inspector
As the Buyer, you can hire a home inspector. If you hire a home inspector, your money is not refundable if you cancel the transaction. The reason is, the home inspector is a third party vendor to the transaction.
On the other hand, there is nothing in the Purchase Contract that says you have to hire a home inspector. Heck, you could inspect the property yourself. Purchasing a home is like purchasing a new car. A used car may look great, but you won't know what's wrong with it until you drive it. Hiring a home inspector for a few hundred dollars could save you thousands in upcoming repairs.
If you don't know any home inspectors, ask your Realtor if he or she can provide you with a few home inspector recommendations.
Don't Freak Out Most home inspectors will provide you with a home inspection report. This report will disclose the findings on what the home inspector noticed or discovered. Everything disclosed in the report is important. However, don't stress yourself out over a very small tear in the vinyl screen.
If you have any questions or concerns, talk to your home inspector and to your Realtor. There's a reason why you have so many days to inspect the property. Don't rush this contingency.
Lastly, keep in mind that there are limitations with a home inspection report. Talk to your home inspector and Realtor about this.
After you conduct your home inspection, you have four main options...
- Proceed with the transaction. By proceeding with the transaction, you waive/clear the home inspection contingency.
-Ask for a buyer credit. This credit will be applied to your closing costs. Both Seller and Buyer have to mutually agree to a buyer credit.
- Ask for a price reduction. If there is a major repair, some Buyers will ask for a price reduction (as opposed to a credit). Keep in mind that both Seller and Buyer have to mutually agree to a price reduction.
- Cancel for a full refund. Say you have 12 days, from acceptance, to inspect the property. In order to get a full refund on your cash deposit(s), you will have to cancel within the 12 days.