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Inspection clause is an important part of the contract for the sale and purchase of residential real estate. The buyer will be interested in having an inspection done to confirm the condition of the house. Inspections can be a complex process.
1.- In general, sellers are required to pay a dollar amount or a percentage of the contract sale price in order to repair defects or damages found during the inspection of the home. A seller may be worried about being limited in their ability to fix defective items that are noted on an inspection report. They will look for contract terms which cap the amount they must pay.
2. – A seller can try to avoid having to pay for repairs by adding an “as is clause” to the contract. This will give the buyer the opportunity to inspect the property. The buyer can cancel the contract in this case if they are not satisfied with the inspection results.
3.- The seller will usually specify a date by which the buyer is required to conduct an Real estate inspection in Pueblo. The buyer who is cautious will prefer that the deadline for the inspection be set after the financing contingency has been met. This will prevent the buyer from spending money prematurely on an inspection. Inspections are usually performed within 15 days after the contract is signed.
4.- If the parties decide that significant repairs are required, they can either extend the closing date, or alternatively put money in escrow to be completed by the seller later. This option may allow the buyer to have more control over the repairs. Depending on the type (FHA or FNMA) of financing, this may not be possible. Repairs may be required before closing the transaction.
5.- Inspectors often report all repairs needed, even those not necessarily the responsibility of the seller. Some contracts include a clause that requires the seller to deliver goods in “working” condition (as opposed to cosmetic repairs) to avoid disputes, delays, or litigation. Inspectors are only required by law to perform a limited visual examination of the property.
6.- In many contracts, the parties can cancel the contract if the repair costs exceed the limit set by the seller for their liability. Or, they may agree to pay for the extra expense. This provision does not apply to contracts that are as-is.
7. -The lender will usually require that the buyer submit a report of inspection if the property is being financed by a lender. The lender will require that certain repairs be completed before the property can be closed if the results of the inspections show the need for them.
To get a better understanding of this topic, Larry has written an article for his real estate blog that includes information on the language to avoid when writing the report.
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