This is part 1 of a 3 part series on Home inspections. Part 1 explains how the home inspection contingency in the Real Estate Contract actually works for you. Part 2 will spell out what to look for in a home inspector and the right questions to ask before you hire one. Part 3 will spell out what to do with the home inspection(s) once you get them.
There are a typically a few contingencies in a home purchase contract. Home inspections are a unique one and an important topic that homebuyers should understand. Most people know that you should always get a home inspection before buying a home but the Latin phrase “Caveat Emptor” is the reason why. This means “Buyer Beware” and is the legal principle in Ohio that when you buy a home, you are responsible to educate yourself on the home’s condition. So always always make sure that your REALTOR protects you by writing a home inspection contingency into the contract. Here is how the contingency works with the CBR (Columbus Board of REALTORS) contract:
From the time that you are “in contract” on your home purchase (which means, that both the you & seller have signed a document where all terms are agreed to – such as price and closing date) you have _X_ (usually between 5 – 10) # of days to have the property inspected (this is known as the inspection period). Within that time frame, you must have the property inspected by every type of inspector you would like to have inspect it (general inspector, gas line, radon, sewer, etc.). If, after you have the home inspected, you are not satisfied with the condition, you may be able to get out of the contract based on the terms of the inspection “contingency clause”. What is more common however, is to submit a “Request to Remedy” form to the Sellers (must be done within the original “inspection period” timeframe) so that you can try to get the Sellers to repair the items that make you uneasy. From there, you will have an “Agreement to Remedy” period (generally between 3 & 5 days) which allows you and the Seller to come to an agreement on what they will fix and what they will not. I often refer to this is a Second Negotiation.
If you come to an agreement within the “Agreement to Remedy” period, everything moves forward and you move on your way to closing (after satisfying that pesky financing contingency, of course). If not, the contract technically dies so be sure to hire a REALTOR that understands the importance of getting this contingency cleared so that it protects you instead of hurting you.
There are some additional items that can come into play (earnest money, reinspections, etc) but in the interest of time, I won’t go into details now. Questions? Email me at email@example.com or post a comment below. Thanks for listening and stay tuned next week for ”How to Choose a Home Inspector”.
Article written in part by attorney, Jonathan Holfinger of Arrow Title Insurance Co. Thanks Jonathan!