The Home Inspection Process
One of the most crucial parts of a home sale during escrow, has to be the home inspection process. The home inspection process is a vital bridge to cross in any transaction. The buyer needs to make sure that there are no structures that are unsafe, or that the home is a money pit. It is also an important step for the seller. Having a seller that understands the home inspection process, is vital because there may be some things the seller needs to fix. This could potentially keep a deal from falling apart and still enable them to get top dollar for their home. We will discuss the home inspection process and identify potential red flags in the sale.
The buyer has a duty to conduct inspections on the property before they buy it, during the escrow process. The sellers have a duty to disclose what they know about the property. Some of these things include past or ongoing maintenance or repairs. Or disclosing if the home flooded in the past. The seller, can only disclose what they know about the property. They do not have to go investigating, such as checking out the foundation or poking around on the roof.
There are however government mandated disclosures to identify if the seller is aware of any lead based paint in the home or other harmful products. Many sellers will not spot problems that they are unaware of, or see problems that are not readily visible to the untrained eye. For this reason, around 84% of buyers will choose to hire a professional home inspector. The home inspector will inspect the property and identify potential problems and make the buyer aware.
How Home Inspectors Work
After you get an accepted offer, inspections usually happen within 5 to 10 days. In Fresno County the buyer has 17 days to complete any inspections that they want to do. The home inspector will arrive at the sellers home after the appointment is set. It is a GREAT idea for the buyer to be present at the home inspection. That way the inspector can go over everything with you in person and review any questions you might have about the report. The inspection can take (depending on the size of the home) one to three hours. The inspector will most likely be looking for the following:
- The home inspector will make a visual inspection of the property. They will examine the structure of the home and the components that go into the home. The home inspector will identify any structural, mechanical or other defects. They will open closets, turn on faucets, dishwashers, the heating and cooling system and take a look in the basement (if any).
- The home inspector will not break open walls, investigate mold, check for radon or check if the home is code compliant. They do not check if the home additions are up to code or legal, or if the home is worth what the buyer is paying for it. That is the appraisers job.
- The home inspectors report will almost always include a rundown of the heating and air conditioning systems, electrical systems, plumbing, roof, attic, floors, doors, windows, foundation, insulation and the exterior and structure of the home. They might however recommend specialists for any of those individual fields to come out and do any further inspections. The home inspector wants to identify potential problems, but it might require further inspection from a specialist such as an AC technician, or a licensed electrician.
Finding Potential Problems
After completing the inspection, the home inspector will go and generate a professional report. These reports can be up to 30 pages long. Any problems that were uncovered in the home inspection, the inspector will describe them in the report. They will also describe the condition of the problem. The report will say if something needs immediate attention, or if something is minor and just making you aware of the issue. If the inspector feels that there is a defect that is not readily apparent, they may recommend follow up action from a person in that specific field.
Keep in mind that the home inspector represents the buyer in most instances because that is who hired him. Therefore, the seller may be one of the last people to learn about any problems that could be effecting the property. However, no home is perfect. Not even a new construction home. The chances that a home inspector will find something in the home. Before the inspection time periods are up, the buyer needs to decide how serious the problems are and what they want to do about them.
A standard purchase agreement comes with one or more inspection related contingencies. A seller will almost always, accept inspection contingencies. Few buyers will want to proceed without one. A home inspection and inspection contingencies exist to protect the buyer. If the inspection uncovers problems, the buyer typically has five options available, depending on the contingency in the contract. Your Real Estate Agent can help you with these:
- Approve the findings in the report and move towards the close of escrow.
- Cancel the contract and have the earnest money deposit returned.
- Ask the seller to carry out some or all of the repairs before closing. If the seller can say yes, no or renegotiate the repair list. The escrow will move forward, or the deal will be canceled depending on how the negotiations go.
- Adjust the offer price, or ask for a credit for repairs. This will give the buyer the ability to have some extra cash to do the repairs after closing. This could be a potentially good option for buyers and sellers, because there will be no arguing about which repairs are being completed. This will allow the buyers to choose which repairs that they want to get done themselves. That would also mean that the sale will close on time.
- Try to negotiate an extension of the inspection contingency so the buyer can carry out further inspections recommended by the report. (This should only be used as a last resort as many sellers may not want to extend the inspection contingency).
Advice To Both Parties
The best advice for the buyer and the seller is to check your ego at the door. The home inspection process is a way to gather information. It is not about squeezing out a discount or more money from the seller. It is not about getting a lower purchase price. Repairs are a fact of life and both need to be prepared to compromise. Keeping this in mind should help the deal go through swiftly and have a fair outcome for everyone.