(Cynthia Long, reporting from Walnut Creek, CA. February 12, 2009) So the good news is, my buyers have found a property they really want, and they and the sellers have agreed to the price and terms in the contract. We’re going to open escrow. At the closing table, one of my buyers turns to me and says, “Okay, now we’re in that inspection contingency period you keep talking about, right?” I’m proud of her. She’s a first-time buyer, and she’s completely on top of all the steps in this transaction.
Together, we review CAR Form BIE, Buyer’s Inspection Elections, dated 11/2008. In this form, there are 31 inspections (see below for the complete list) that I will advise this couple that they must either elect or decline during their inspection period.
The beginning is easy. The seller has agreed to cover the cost of the pest inspection, which will discover wood-destroying pest damage or indicate where further tests are required. My buyers will be present at the inspection, and they will listen to the inspector’s synopsis and ask lots of questions. Then they will have a written report to review in detail. We’ll expect that the seller will cover the repair costs of Section 1 damage (visible evidence of an active infestation) and then the buyer can make judgments about Section 2 (condition exists that is deemed likely to lead to infestation ). Once the buyers are comfortable with what they know about the condition of the property after the pest inspection, then we bring in the home inspector.
The home inspector, whose work is paid for by the buyers, will look at the whole property, from underneath the floor to the roof. My clients will get a thorough review, verbal and written. We’ll focus on the areas where the home inspector advises repairs and/or further inspection. These areas are generally around structure, plumbing, roof, and chimney. For the buyers’ comfort, we add these one at a time, making sure they’re still invested in the property before they outlay cash for the next inspection.
However, these 31 different inspection elections that appear on the BIE do not come out of thin air. These contract forms get created because buyers or sellers in the past had transactions that went south (to say the least) over lack of information during the inspection contingency period. When people find out information about a property after they’ve signed off contingencies, they say, “If we would have had that information, we would have made a different decision.” Battle lines get drawn, and everybody loses.
To protect my clients, I ask them to consider the information that would be derived from each of these inspections and decide if they want professional recommendations on any of these aspects of their property before they commit to purchase. By this time, they are educated enough to either elect or decline each inspection.
• General Home Inspection
• Wood Destroying Pests
• Chimney
• Electrical
• Heating / Air Conditioning
• Lead Paint
• Plumbing
• Square Footage
• Structural
• Easements/Encroachments
• Foundation/Slab
• Lot Size
• Boundaries
• Pool/Spa
• Roof
• Sewer
• Septic System
• Soil Stability
• Survey
• Tree/Arborist
• Well
• Water Systems and Components
• Radon Gas
• Formaldehyde
• Asbestos
• Methane Gas
• Mold
• Permits
• Public Records
• Zoning
• Government Requirements
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