Step 7
Inspections
Once the Seller has accepted your contract offer, you will begin your period of “due diligence”. A typical contract will include an Option Period, a negotiated period of time during which the Buyer will complete necessary inspections of the property. We recommend you always obtain a general home inspection as well as surveys and inspections in specialized areas beyond the scope of the general home inspection.
Home inspectors provide a unique customer service in identifying existing problems, should there be any, and assisting in promoting and facilitating communication with the home seller. There are many home inspection companies to choose from, and your Broker will provide you with a list of qualified inspectors for your use.
After the inspections, the Buyer should have all the information necessary to determine whether he or she has made a good and sound business decision. During this Option Period, the Buyer may, for any reason, terminate the contract, and forfeit the negotiated Option Fee. The Option Fee and the Earnest Money are two different things, and one should not be confused with the other.
The generally accepted legal definition of Earnest Money is a sum of money, which a contracting party delivers to the other at the time of contract, and is presumed to be forfeited in the event of default. It is usually used to reduce the purchase price by the amount of the Earnest Money, and therefore acts as part of the down payment.
General areas that home inspectors look at:
Structural: Many home inspection organizations have set standards on certain areas of the home that the home inspector looks at to determine the integrity of the essential internal and external structural components. Home inspectors are not structural engineers but can identify visual defects requiring immediate repairs.
Electrical: Do all the outlets work? Does the house use fuses or is there a breaker box? Are there any visual signs of fraying on the wiring?
Plumbing: Are there any leaks or annoying drips? Are all the mechanical systems and fixtures working properly?
Built-in Appliances: Are they functioning properly?
Safety Hazards: Home inspectors are not environmental specialists, but they can identify many safety hazards or dangerous conditions.
Miscellaneous: Other items may or may not be included in a standard home inspection. Some of these may be: Septic systems, roofs, drainage problems, wood decks, patios or other exterior structures. Be sure and verify which, if any, of these items are included in your home inspection.
NORMALLY NOT INCLUDED: Termite, geological of land subsidence surveys and environmental or pollution inspections, which should be completed separately for your own protection.
