The property inspection process explained

Once you have made an offer on a property you would like to own and the seller accepts that offer, the buyer has several things he or she needs to accomplish prior to settlement.  One of those is the property inspection.  The inspection is critical because it gives the buyer the opportunity to discover all the things that may be wrong with the home so that he or she can make the most informed decisions they can.

To begin with, some houses on the market are being sold in an “as-is” condition.  This means that if you purchase the property, you are taking the property exactly as it is being sold without the opportunity to ask for the seller to fix anything.  Even if you are buying a property in an as-is condition you still want to get an inspection so you can fully understand all the conditions of the house before you have the keys in your hand.

Now, once you have determined that the house is not being sold as-is and the sellers have accepted your offer then the property inspection process shall begin.  First, the home buyer is given two options for tackling the inspections.

Option 1

This option allows buyers to terminate an agreement of sale if they discover a problem with the property during the inspection.  The buyer also has the opportunity to negotiate with the seller for repairs or credits in relation to any problems with the house that the inspection may turn up.

Option 2

The main difference between option 1 and option 2 is that if any problems come up from the inspection, the buyer is required to submit a “Written Corrective Proposal” for repairs or credits of said problems.  Once the seller receives this proposal, he or she may choose to whether or not to satisfy the proposal for repairs or credits.  If the seller agrees to the proposal, than the buyer MUST follow through with the purchase of the property.

In summary, Option 1 gives the buyer a bit more leverage during the inspection process and Option 2 gives more leverage to the seller.

Take a closer look by reading page 10 of the Agreement of Sale

Page 10 AOS

Once you have decided on the option you would like to choose, then the next step is to hire an inspector to come out and inspect the property.  You can easily find an inspection company through Google or the Yellow Pages.  When hiring the inspector, you need to make sure that they are a member of the national home inspection association.  Here is a PA home inspector compliance statement you should have filled out by the inspector.

Home Inspector Compliance Statement

Ok, you have scheduled the inspector to come inspect the home.  You want to make sure that you and your Realtor are present during the inspection and are asking as many questions as possible.  Once the inspection is complete, the inspector will give you a summary of any problems he found and what it might cost to fix those problems.  One thing I want to point out to you is that there is no such thing as a perfect house.  An inspector can go into a brand new home and find issues with it.  That being said, you have this summary, the final phase of the inspection process begins which is called the “Reply to Inspection”

The reply to inspection is addressed on a specific form and it outlines how you as the buyer intend to deal with the issues that came up during the inspection.  Using this form, you will state if you will be accepting the property, terminating the deal, asking for repairs, asking for credits, changing the purchase price or any other number of things. If you intend to take the property, call it your wish list.  Once you have this form completed it will be given to the seller who will then decide how he wants to handle your requests.  Let the negotiations begin!  In the end,  the buyer and seller will either come to an agreement over the inspection or the entire deal will fall apart.  As you can see, the inspection process many times can make or break the deal!

In this article I talked about some of the essential parts of the home inspection process.  As you can see, it can be very difficult for a consumer to navigate through this process if he or she does not fully understand it.  That is why I will always tell you that its in your best interests to be fully represented by a real estate professional.  Your Realtor will ensure that your money, time and overall best interests are fully realized during this whole process, saving you both head and heartache in the end.

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