While not absolute, inspection reports are tools that lay bare a home's soul, stripping it of the pretty pictures and dramatic language that impressed you the first time you looked at the Multiple Listing report. It's at this juncture that a buyer's questions morph from location, distance from work, quality of schools and the like into "Is this what you want, what you really, really want?"
That's a condensed version of how my introduction to home inspections concluded in last week's column -- now it's time to inspect the inspection contingencies contained in a purchase contract.
There's a popular commercial that says, "Dude, you're getting a Dell." Likewise, the inspection provision begins by intoning that in order to close the transaction you're getting a written inspection typically within 10 calendar days following the contract acceptance.
While a whole house inspection is the option chosen by the majority of homebuyers (see "The Importance of the Right Inspector," issue of Aug. 29-Sept. 4), other options are available that allow the purchaser to decline or waive a comprehensive inspection and substitute targeted inspections specific to structural, radon or roofing, to name a few. If your home-to-be is situated on a hillside, for example, it might be advisable to get an engineer's assessment of the structural and geo-physical condition of the dwelling and the property.
If the inspection reveals material defects and you want to request the seller to correct them, it's incumbent on you, the buyer, to notify the Listing Firm in writing and include the relevant portion of the inspection report. Once the notice is delivered, the buyer and seller will have a "Settlement Period" -- again, typically 10 days -- to negotiate and reach a written agreement in settlement of the property's condition.
Many buyers lose sight of the inspection and settlement periods, since the emphasis during the negotiations often tends toward purchase price or closing date provisions. Although the consideration given to these provisions is secondary in nature and becomes moot if a purchase price isn't be agreed upon, their importance can't be overlooked and overemphasized.
Upon acceptance of your offer, it's easy to be lulled by the allure of leaving your old digs and moving into your dream-filled new home. Naturally your thoughts turn toward moving in and redecorating, so it's to bypass these important interim steps as your elation continues. Before you know it, a few days have passed and suddenly you realize the negotiated time windows for inspection and settlement are closing fast.
Although these contingencies are negotiable and to some degree flexible, they're important not only to you the buyer (since now you know what you're buying) but also to the seller (since now they know the transaction has moved one step closer to closing). Any dalliances in these areas can furrow the brow of either party and potentially jeopardize the transaction's successful completion.
If the items in question can't be resolved to the satisfaction of the buyer and seller, the contract can be considered null and void. If the buyer is satisfied with the inspection results, however, then it's incumbent on the buyer to notify the Listing Firm in writing of their satisfaction and thus, in Realtor-ese, "waive the inspection contingency." To emphasize the importance of the written word in regard to this provision, the contract boldly states that, in the absence of a written waiver or notice, it shall be deemed that the buyer is satisfied with the inspection report and the "contingency will be considered waived."
Another inspection included is for termites, and it too follows the format described for the whole house inspection. It allows the buyer to opt in or out of obtaining one and includes a specified time frame that's often concurrent with the other inspections for completion and settlement.
With language indicative of a bright yellow tractor-trailer truck carrying hazardous waste, this portion of the contract concludes by stressing with detailed and specific language that it's incumbent on the buyer -- not the Realtors or anyone else involved -- to make sure that the condition of the property is satisfactory and measures up to what's been advertised. In other words, it's your responsibility to investigate, evaluate, ruminate on and conclude what's fact and what's fiction in determining whether or not this house is for you.
THIS WEEK'S TIP: In searching for a lender, you might find that closing costs can vary greatly. Closing costs are those out-of-pocket expenses that must be paid at the time the house changes hands. These costs include loan application fees, a title search, a survey and appraisal and other out-of-pocket expenses.
STEVEN J. LOWENSTEIN, a native of Cincinnati, is a Realtor with Coletta & Associates Realtors. He's a graduate of the University of Cincinnati and holds a Master's degree from North Texas State University.
