Whether you perform an inspection during the option period or prior to submitting an offer, it is up to you to perform your due diligence to make sure you understand the true condition of the property. Would you go on a blind date without checking Facebook or Googling a person first? I don’t think so. So it’s important to get an inspection on a property.
Am I Required to Get an Inspection? No, you’re not. Although it is in your best interest so you don’t get stuck with a bad property.
What Will an Inspector Look At? The inspection is intended to report major damages or serious problems that would require repair. The inspection is not designed to criticize every minor problem or defect in the home. The inspector will inspect the following items:
Foundation
Roof
Appliances
Plumbing
Electrical
Air Conditioning and Heating
Ventilation
Roof and Attic
General Structure
Some Also Do a Wood Destroying Insect (WDI) Inspection
What is an Option Period? The option period starts after the contract is accepted and executed. It is a set amount of days where the buyer has the unrestricted right to terminate the deal while they perform their due diligence. In exchange for this period, the buyer pays the seller an option fee. If at the end of the option period the buyer decides to cancel the contract, the seller keeps the option money. The option money is usually around $200, but is negotiated within the contract based on the days of the option period and price of home. If the buyer continues with the transaction, the seller applies the option money towards the buyer’s closing costs.
What Happens After the Inspection? Once the inspection is complete, and you receive the report, you and your agent will review it together. During the option period, it is ok to re-negotiate with the seller if there are any items in major disrepair. If a seller does not want to do the repairs, they may provide a repair allowance or contribute money towards your closing costs. Depending on the terms you already negotiated, the seller is not required to do any repairs or contribute money towards the buyer. Some deals are as-is and some negotiate a low price up front.
When reviewing an inspection, it’s important to break the inspection summary items down into three categories: seller deferred maintenance, normal wear and tear, and code related issues.
Seller Deferred Maintenance: These are going to be the most severe of the items on the inspection. Some of them the seller may be aware of and some they may not. That’s why an inspection is done. These could be items like hail damage on the roof, foundation settling, or siding damage from a pet. Seller’s are typically open to fixing these repairs as long as you provide the inspection report. It’s important to pick your battles and be selective with the items you request be repaired. You’ll gain more ground by asking for specific items that are in obvious need of repair than if you ask for the world.
Normal Wear and Tear: When you’re looking at these items, it is important to take into consideration the age of the property. If this is a fairly new home and the carpet has stains all over it, you would want to ask the seller for new carpet. If the home is 30 years old and you’re getting a fair price, it may not be worth it. All homes are going to have a normal amount of wear and tear. It’s important to focus on the items that impact the structural integrity of the home.
Code Related Issues: Building codes change over the years. A home that is 30 years old is not expected to meet the building codes of today. Unless it is an item that is causing structural issues, seller’s are typically the least responsive to these issues.
Do I Need to Be at the Inspection? If you’d like to be. For newer homes in fairly good condition, you may find yourself just standing there. For older homes, it is kind of fun to watch what the inspector is doing.
“Thank you for all of your assistance with the purchase of our home. Everything has gone very smoothly and quickly. It was clear you and your company have the right systems in place to limit surprises from happening throughout the process. Even though there were a few unexpected items that showed up on the inspection, you helped us get them resolved quickly and closed.” ~Jeannie H., Purchased in South Austin
