Buyers are responsible for performing adequate due diligence during the escrow period, which basically means making sure you are getting what you think you are paying for. Along with the careful review of disclosures, documents and reports provided by the Seller and Agents involved, inspecting the property is the most important part of such due diligence.
The Purchase Agreement typically contains provisions allowing you to perform any inspections and investigations you desire to ascertain the condition and circumstances of the property you are in the process of purchasing. Performing such due diligence with qualified professionals is absolutely vital if one doesn’t relish unpleasant and often expensive surprises after close of escrow.
Inspections do not guarantee the condition of the home; instead their purpose is to educate you regarding the home’s current condition and how to maintain it in the future. Inspections are completed within a contractually specified time period, typically 10-15 days. If you are satisfied with the condition of the property, you remove the inspection contingency and proceed with the sale. If you are not satisfied, you may cancel the contract or negotiate with the Seller. In a negotiation, the purchase price may be adjusted, a credit may be given in escrow, or the Seller may perform work prior to close of escrow.
The two most common inspections are the Structural Pest Control Inspection and the General Contractor’s Inspection:
* Structural Pest Control Inspection: Sometimes referred to as a “Termite Report,” it examines all types of insect and fungus (water) damage (Section 1) as well as conditions that could lead to damage (Section 2). This inspection is performed by a specially licensed contractor who must inspect properties according to criteria established by the State Board of Pest Inspection.
* Contractor Inspections: A general contractor’s inspection will check the overall condition of the home from the foundation to the roof, including electrical, plumbing and heating, the basic structure, as well as the quality of the finish work. It is important that you use a professional who specializes in home inspections in the area in which you are purchasing, is bonded and a member of one of the major home inspector associations. Do not use a regular contractor (such as your brother-in-law) as there is a huge difference between building and repairing homes and inspecting them thoroughly for issues pertinent to the home purchase decision. The inspection period is also useful for obtaining estimates for repairs and improvements you plan to make later.
Other Common Inspections:
1. Structural Engineer
2. Roof
3. Environmental Hazard
4. Review of Building Permits
5. Sewer Line
6. Fireplace
7. Lot Line Survey
8. Furnace
Who Pays for Inspections?
Sometimes the Seller will provide pre-sale inspection reports to prospective buyers during the marketing period of the home, but more typically, the Buyer pays for inspections. Pest Control Inspections generally range from $350 to $500 and Contractor’s Inspections range from $400 to $800 depending on the size of the home. It is important to use qualified professionals and we can recommend inspectors in every category.