The home inspection should be considered a necessary part of any home purchase. It is one more way to recognize and confirm your new purchases well being, or to unveil potential problems that may make you think twice about the purchase. Because the inspector is working for the Buyer, he is paid by the Buyer. If the home closes, this bill is added to the settlement statement and paid at the closing. Here is what to expect from a competent, licensed home inspection.
During the due diligence period (normally 10 days after the contract is signed by both the Buyer and Seller), buyer may have done any and all inspections they wish. A general home inspection by a licensed professional gives the buyer a once over of all the home’s working systems, including plumbing, electrical, heating, air conditioning, roof etc.
Because the Lake of the Ozarks is not your typical city, many homes here have a septic system. This is perfectly normal and acceptable, as they are designed to give years of trouble free service. That said, as with most things, technology has come a long way. Older systems need to be checked for deterioration of old metal tanks and to make sure there is a adequate drain (leach) field. A licensed septic inspector is needed for this and in many cases more important than the general home inspection because if a new system is necessary, the cost can run from 10 to 20 thousand dollars!
If the general home inspection turns up anything odd, or if the buyer has a concern about any specific item, they can order additional inspections by calling a specialist in that area, such as a roofer, HVAC contractor, plumber, etc.
After the inspections are complete, the Buyer has three options:
Accept the home “As Is”
Cancel the contract, get your earnest monies back and start looking for another home.
Give the Seller a written list of repairs you require prior to closing.
The Seller then has three options.
Fix everything the Buyer requests. The Buyer is now legally obligated to close
Fix nothing. The Buyer now has to decide whether to accept the property “As Is” or cancel the contract, take their earnest money and start the search over.
Fix some items. Buyer now has the option of accepting the property with the repairs the seller is willing to make, or cancel the contract
Note there is no step to renegotiate the purchase price! The purchase price and the repairs are separate issues, negotiated separately and are totally unrelated. Sellers may choose to offer a credit to the Buyer in lieu of making some or all of the requested repairs. The seller is not bound to offer a credit and buyer may not ask for a credit in lieu of repairs, regardless of the inspection findings. If a credit is offered, the amount is negotiable.
As with the contract itself, inspections and notices are time sensitive. If the Buyer misses the deadline to submit the Inspection Report – they just bought the house “As Is”! If the Seller doesn’t respond in the allotted reply time, typically 7 days, the Buyer must assume Seller intends to sell the home “As Is”. The Buyer has 3 days from the date of the Seller’s response to decide whether to go ahead with the purchase in the “As Is” condition or cancel the contract.
This is one situation where a mistake or untimely response can be monumentally costly and one reason why it is best to hire someone who’s job it is to do this all day, every day, and carries insurance to protect you and themselves against mistakes. To err is human, to buy real estate without a professional Realtor is just silly.