Finding the perfect home is the best feeling ever! You've walked through it, maybe sat in the furniture, and looked in every closet, cabinet, and corner. You've already mentally moved into the space, know where to place your furniture, and may have even decided what color to paint the walls. Everything looks perfect! There's new hardwoods, carpet, stainless steel appliances, and light fixtures. Surely you don't need a home inspection contingency since it's obvious it's been taken good care of, right?
WRONG!
What is a home inspection contingency? This gives the buyer the right to have a home inspection so they can make an informed decision about the condition of the home. The contingency allows for them to either accept the house in the condition on the inspection report, to negotiate with the sellers to credit or repair items needing attention, or to void the contract altogether if the report is unsatisfactory to them. If exercised within the time frame allowed in the contract, this is not a default on the part of the buyer.
In a fast moving market and in multiple offer situations it may be tempting to forego a home inspection, because you feel it will put your offer at an advantage over the competition's. The house may be advertised in "AS IS" condition, so you rationalize that the sellers won't fix anything anyway, so why bother? Maybe you feel the cost ($300+) is money better used for something else. Better yet, the house looks so well maintained it's not necessary. Not only are these faulty thoughts, but the decision not to have an inspection contingency in the contract can cost you more than you bargained for.
Imagine you receive a meticulously wrapped gift with beautiful paper, and an expertly tied bow that finishes the gift with a flourish. You anticipate opening that gift, sure to find something just as special inside, based on the way it was wrapped, and all you end up with is a lump of coal. Can you imagine how disappointed you would be? How surprised since you didn't anticipate it? There was no indication of what was inside the box, and you would have never known what it was without opening it.
Not every property may have the look of a well-staged model home or the trappings of renovations and updates, but even the ones that do require a thorough home inspection. There is no way a potential buyer or a real estate agent can see all the flaws of a home when they view it, and agents aren't home inspectors, so cannot advise on the condition of a home. Having an inspection done is the best money you can spend when you enter into a real estate contract.
Recently, I attended a home inspection with my buyer on a newly renovated home. It looked very nice and it was apparent alot of work and money had gone into the property. Fifteen minutes in, the inspector started pointing out issues that required big time and money fixes. Unfortunately, the list continued to grow and the buyer became more and more dismayed. I reminded him that a home inspection contingency means more than allowing for an inspection, it means if you are dissatisfied with the findings of the report you are legally able to void the sales contract and exercise the contingency with no penalty. He breathed easier and agreed it was the best money he had ever spent.
This morning I came across a listing description that states, "No home inspection contingency please. Inspection can be done, but for informational purposes only." As a Realtor, this raises a red flag to me. They are allowing for the inspection, but do not want to allow for it to be used as a contingency to cancel. If the report uncovers thousands of dollars worth of issues, shouldn't you have the opportunity to void? Writing "for informational purposes only" on a contingency is never a good idea, and not something I would advise my buyer to do.
Carefully consider the ramifications of not allowing for a home inspection contingency when it's time to write up an offer. No one wants to get stuck with an expensive lump of coal.
 |
| Image courtesy of www.ccPixs.com |
Comments (3)Subscribe to CommentsComment