What's an "OFFER SUBJECT TO INSPECTION"
Can you still buy a house in the midst of the Covid-19 lock down? Well, let me tell you about a process that is currently being used to make this happen.
I’m talking about making an Offer subject to inspection.
As a preface to this video, I am talking to you in late March of 2020.
Our nation is in the middle of a shelter in place order by the government which is restricting our movement around the community. Additionally we are avoiding close physical contact in an effort to stem the spread of the Covid 19 virus.
And as of this recording, California has ruled that real estate services are still an essential business.
So let’s get to it!
If you are in a situation where you need to make a home purchase at this time, you will find that many properties will not allow client visits. I’m referring mostly to occupied homes where the seller is in place and does not want to risk any outside contact.
Their home is on the market but you just can’t get in to see it. In fact the showing notes in the MLS state something like “No showings at this time. Submit offer subject to inspection.”
Is this seller crazy? They expect you to make the largest purchase of your life and not be able to see it?
They want you to make your decision based on some photos and maybe video? Well, not exactly.
This type of offer has been around, mostly for investment properties and apartment buildings where tenants are involved but is making a resurgence in today’s home buying market.
A subject to inspection offer does a few things; one of which is to separate the wheat from the chaff. Only a serious buyer would make this kind of offer.
Secondly, it gives the buyer the right to cancel the offer once they have seen the property. No money is at risk at this time and no contact is binding. An escrow is not started and earnest money deposits are not transferred until the buyer and seller agree to terms.
This process proves to the seller you are a serious buyer, have the financial qualifications to make a purchase and have put the property high on your list.
This is not the time to submit a frivolous, low ball offer just to see if something sticks.
In this process, a seller will evaluate all offers, then notifies the buyer or buyers that they are ready to move forward.
In this time of limited physical contact, the buyer may be asked to take extra precautions when finally allowed to make their inspection, which might include face masks, gloves, disinfectant wipes and other precautions. Please follow their requests and maintain all recommended safety precautions.
Once you have seen the home and feel that it checks all of your boxes, the sale process begins. According to California real estate law, your timelines begin when the contract is accepted by the buyer and seller. The clock begins to tick on all contingencies starting at this time. In California, buyers typically have 17 days to make their inspections and perform their due diligence. The buyer can still cancel the contract without harm during this time period.
If you agree to move forward, you begin your various inspections just as you would in any other transaction. Home inspections, termite inspections, and appraisals will proceed as usual. Timelines may be extended at this moment in time but the process is the same,
As you can see, this may not be the ideal way to purchase your dream home but based on the current situation of extremely low inventory, might be the only way to complete your purchase AND you could end up with the House of your dreams because of low competition and a seller eager to move on.
If you have any questions about Subject to inspection offers just reach out to me or leave a comment below.
Click this to see all the MLS listings for MISSION VIEJO
Read about Mission Viejo La Paws Dog Park
Read about the 10 Best Coffee Shops in Mission Viejo
Comments (2)Subscribe to CommentsComment