Today, David talks about the home inspections that are performed after a purchase contract is signed. It is essential to have a home inspection when buying a home because a home inspection may uncover items that are not listed in the seller's disclosures. On a purchase contract, there is a place that states how many days the buyers have to perform the inspections. A buyer would like as much time as possible to have to get their inspections done, and on the flip side, the seller will like them completed in a shorter amount of time. This home inspection contingency timeframe is an item that can be negotiated, and a real estate agent will work to get a timeframe that is good for their clients.
There are two main inspections that are typically performed when buying a home:
The first one is a regular home inspection. The home inspection typically costs between $299-$399, depending on the size of the house. The home inspector looks for items that might not be visible to the naked eye. A few examples of items a home inspector is looking for are active roof leaks, past roof leaks, plumbing leaks and making sure electrical sockets are in working condition.
The second inspection that is typically performed is a WDO inspection. WDO stands for Wood Destroying Organisms. The WDO inspector will look for live termites, past termites, and wood rot. If the buyer is getting a VA or FHA loan, a WDO inspection may be required, and on a VA loan, the seller may have to pay for it. The cost for the WDO is around $100-$200.
Another inspection that can be performed is an inspection of the septic tank. For any property that is not on public sewer and has a septic tank, it is a good idea to get a certification stating that it has been pumped and that it is in good working condition. The cost for a septic tank inspection can range from $300-$400 depending on how big the tank is and how many there are.
Once the inspections are complete, the buyer will be getting a report of the findings. The report can be very lengthy and will outline everything that was found during the inspection. The buyer should not be alarmed when receiving a lengthy inspection. The home inspector is paid to inspect everything and in doing so will find something. Working with an experienced real estate agent is very beneficial to a buyer to help them to understand what is on the report. The real estate agent will go over the home inspection with the buyer and talk the buyer through the results.
It is always a good idea to take out the seller's disclosures that were signed along with the contract and compare that to any items found on the home inspection. If the home inspector found an old leak, take a look at the seller disclosure and see if anything was mentioned a leak. If it was not mentioned, that could be something that the buyer could address with the seller. Most contracts today are written on "As Is" contracts -- that means the seller is not required to repair or fix anything that comes up in the inspections. A buyer can always as for items to be fixed, and it is up to the seller to decide if they want to make the repairs. If the seller does not want to make any repairs, the buyer can choose to back out of the contract and as long as they are still within in the inspection contingency, they will receive a full refund of their escrow funds.
