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Home Buying & Inspections: Random Real Estate Question

By Karen Rice Keller Williams Real Est

Real Estate Agent with Keller Williams Real Estate RS301772

March 31, 2008 07:42 AM

buying a home Q: Why should I sign the contract before the home inspection?

A: Because that's the way we do it here in Pike and Wayne County, PA.

Please forgive me for being a smart-aleck. The truth is, it's for your protection as a buyer. Think about it. You find a house you love, maybe a lakefront home on Lake Wallenpaupack, and decide you'd like to purchase the home, contingent upon satisfactory inspections. So, you contact a home inspector who tells you he'll inspect the home sometime next week.

Great. Once the inspection comes back clear, you'll sign the contract, right?

You hire the inspector, and pay the $250 - $500...and then you contact your agent to write up the contract.

Oops. It's under contract. Someone else beat you to it. And you're out the inspection fee.

The contract is contingent upon satisfactory inspections - and it's in your best interest to enter into a contract before having the home inspection.


WEICHERT, REALTORS® - Paupack Group Independently Owned and Operated

Karen E. Rice is a real estate agent working in Pike & Wayne County of Northeastern PA in the Pocono Mountains. Lake Wallenpaupack is one of Pennsylvania's most popular destinations for vacations, retirement, and purchasing a home.

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Dale Simmons

Realty - Orange Park, FL

Great post, keep up the good work!

Mar 31, 2008 07:45 AM

Karen Rice Keller Williams Real Est

Keller Williams Real Estate - Hawley, PA

Northeast PA & Lake Wallenpaupack Home Sales

Thanks Dale.

Mar 31, 2008 07:48 AM

Sarah Reinhart

Brumback Residential - Spokane, WA

Great marketing...way to go!

Mar 31, 2008 07:53 AM

Ernie & Barb Suto

Century 21 Preferred Realty - Pompton Lakes, NJ

Contract first, home inspection next ...........the buyer has a way out if home inspections are not satisfactory.......and if the owner does not repair certain items (other than structure/termites), the buyer can walk away....one way or the other, the buyer is paying the inspection.

Mar 31, 2008 07:56 AM

Karen Rice Keller Williams Real Est

Keller Williams Real Estate - Hawley, PA

Northeast PA & Lake Wallenpaupack Home Sales

Sarah - thanks!

Ernie & Barb - yes, the buyers understand that they have to pay the inspection fee even if they don't buy the house, but it sure would stink if they paid for an inspection and then lost out on the house cause someone else put it under contract.

This blog was in response to a real question posed to me today; some buyers were surprised that they have to sign the contract first before having the inspections. I guess in some areas it's common to inspect first, sign later - but that's definitely not in the buyer's best interest.

Mar 31, 2008 07:59 AM

Stephen Graham

Inactive - Atlanta, GA

It may not be a bad idea for buyers to inspect before entering into a contract.

Mar 31, 2008 08:22 AM

Karen Rice Keller Williams Real Est

Keller Williams Real Estate - Hawley, PA

Northeast PA & Lake Wallenpaupack Home Sales

Stephen, thanks for commenting, but please explain. Of course if they decide not to buy the home anyway, no harm/no foul - but what if the situation happens like the one I suggested above - they want to buy the house but while they were having it inspected other agents were showing the property and actually DID get it under contract? The first buyers are out of luck.

Not entering into a contract first seems to be more of the seller's advantage, rather than the buyer's.

Mar 31, 2008 08:30 AM

Stephen Graham

Inactive - Atlanta, GA

Sure, Karen. If the buyer inspects the home upfront, then the buyer is fully aware of what they are getting into. Hence, when and if the buyer makes an offer, it will be based on all relevant information. This should be good for the seller too given that the buyer won't try to renegotiate the transaction after the inspection.

Mar 31, 2008 09:32 AM

Karen Rice Keller Williams Real Est

Keller Williams Real Estate - Hawley, PA

Northeast PA & Lake Wallenpaupack Home Sales

Thanks, Stephen.

Our contracts allow the buyer further negotiating power after the inspection: they have the right to adjust their offer and renegotiate with the seller, or walk away completely.

Granted, in a buyer's market, the chance of losing the sale to another buyer while you get inspections completed is not as high as it would be in a seller's market, but the risk is still there. You never know when buyers are going to suddenly be interested in a property - I almost lost out on a land deal a couple of months ago when this piece of property that had been on the market for a year had a surge of interest from three buyers on the same weekend. Crazy!

That said - apart from the chance of losing the house, the other advantages / challenges for the buyer are pretty much six of one, half dozen of the other IMHO. It is definitely to the seller's advantage to have the home inspections first - as the home won't have to go to Pending Status and be removed from the Active Listings, nor will he run the risk of having the deal fall through and then have to put it back on the market again - only to have people who've been watching ask "why?"

Mar 31, 2008 09:39 AM

Lynda Eisenmann

Preferred Home Brokers - Brea, CA

Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Hi Karen,

My perspective is a little different here. Why would a seller let anyone in the house to make an inspection if he/she didn't feel the buyers were serious enough in the first place to submit a written offer?

I think most contracts (at least here) are full of buyer contingencies, wiggle room for a buyer in the event they are not satisfied with the findings/the results of an inspection and other contingencies. As for doing inspections in advance, we don't always know the qualifications/expertise of a prior inspector. He/she could be brand new with little experience, or a geezer ready to retire. We've seen it happen from both sides.

Mar 31, 2008 11:38 AM

Marchel Peterson

Results Realty - Spring, TX

Spring TX Real Estate E-Pro

Karen, I have had this very conversation with so many buyers. They are taking a chance of just throwing inpsection money away by not going ahead and signing the contract.

Mar 31, 2008 03:16 PM

Thesa Chambers

West + Main - Bend, OR

Principal Broker - Licensed in Oregon

Karen - I have never been asked this - but now that I read it... I can picture it being asked.... love how you explain this one

Mar 31, 2008 06:46 PM

Bill Gassett

RE/MAX Executive Realty - Hopkinton, MA

Metrowest Massachusetts Real Estate

Hi Karen are there actually people that ask to do the inspection 1st in your area? I have never had someone ask if they could do the inspection priot to making an offer.

Apr 01, 2008 12:27 AM

Karen Rice Keller Williams Real Est

Keller Williams Real Estate - Hawley, PA

Northeast PA & Lake Wallenpaupack Home Sales

Lynda - I agree! As a seller, I certainly would not want any Tom Dick and Harry nosing around in my house with an inspector, without some kind of commitment . Let's not even get started on home inspectors who should just hang it up and become a fix-it man (or not...) LOL

Marchel - thanks for reading and commenting. Glad to hear I'm not the only one with this conversation.

Thesa - I appreciate your good words. I'm learning to never be surprised by the questions being asked.

Bill - believe it or not, I've had this question asked by two different buyers in the past six months. I can only assume - and as Stephen above has indicated - that this is the norm in other parts of the country.

Thanks everyone for the feedback.

Apr 01, 2008 01:46 AM

Tina Howell

RE/MAX DFW Associates VI - Little Elm, TX

Little Elm & Frisco Area Real Estate

nice clear cut post that answers a question a lot of consumers ask. Nicely done.

Apr 01, 2008 01:59 AM

Karen Rice Keller Williams Real Est

Keller Williams Real Estate - Hawley, PA

Northeast PA & Lake Wallenpaupack Home Sales

Tina - thank you for reading and for the kudos. I appreciate it!

Apr 01, 2008 02:05 AM

Katerina Gasset

The Gasset Group & Get It Done For Me Virtual Services - Provo, UT

Amplify Your Real Estate & Life Dreams!

Karen- Here, a seller would never let you go and get a home inspection before they have an accepted contract. Since we work with sellers I would never recommend our seller to allow that. Once the inspection is done, that all becomes a part of full disclosure laws and we would have to tell every prospective buyer what is on that inspection report if these buyers did not follow through with their offer. Not in our sellers' best interest.

Apr 04, 2008 03:41 AM

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