Most real estate contracts in the U.S. contain an inspection contingency clause, which is a provision to allow the purchasers to have the home inspected for any major defects or problems prior to signing a final purchase agreement. Inspections generally take place pretty quickly after an offer is accepted, and generally take two to three hours to complete (generally the buyer, seller and inspector are all present).
The American Society of Home Inspectors has “Standards of Practice” that dictate what must be inspected and how far inspectors have to go to report those findings. According the ASHI, a basic home inspection evaluates 10 different areas of a home: exterior, interior, heating system, air conditioning system, structure, roofing system, electrical system, plumbing system, insulation and ventilation, and fireplaces. After an inspection has been completed, the inspector will issue a report to the buyer detailing what was found.
Now comes the potentially agonizing part. If the buyer’s inspection turns up a lot of issues (or even one or two really major ones), they’re probably going to ask the seller for adjustments to the selling price or they may ask for the seller to fix the problems found. If you’ve disclosed the issues found in your seller’s disclosure statement, than you’re probably going to be in a better position to negotiate than if you didn’t (which might be the case if you were unaware of an issue). Oftentimes, the best way to negotiate the price or cost of replacement is to split the cost.
Stay tuned for Part 2 on what you can do to make a home inspection go more smoothly.