When you buy real estate you may negotiate a contingency for inspections. Sometimes called the Due Diligence period or Period of Discovery, this gives a buyer a chance to act on the legal notion of Caveat Emptor by becoming aware of the property being purchased. Let's look at some common things to consider during inspections.
Most of my sales lately have included an inspection period, usually lasting 10 calendar days from the final signing of the purchase agreement though sometimes this is less than 10 days and in one exceptional case my buyer actually completed an inspection prior to making an offer*.
The basic component of inspections involves hiring a property inspector to check out everything to do with the home. A top down inspection includes checking out the roof, attic, structural components, electrical, plumbing, central heating & cooling, windows, basically everything. A general inspection usually does not include a complete view of the chimney, water softener, or camera work in plumbing lines but it does give a fairly comprehensive report on the condition of the property and can sometimes lead to further investigation if the inspector sees causes of concern.
Radon testing is very commonplace in the South Metro area of Minneapolis and St Paul. Radon levels are generally rather elevated in this area and the only way to know if radon is high in a home is to conduct a test. Testing should be done every two years so if a seller shares a test result from several years ago, it is important to test again even if the previous result was low. See my article on Radon for further insights. I always tell my buyer clients that you shouldn't take a chance on Radon, especially since it is very easy to treat by installing a mitigation system.
Lead-based paint is another thing to test for if the home was built prior to 1978. In my experience very few people actually perform a test for the presence of lead-based paint but every buyer should become familiar with the hazards it presents and always take appropriate safety precaution when doing remodeling of a home that may have at one time contained lead-based paint. It is also very important to make sure family members are safe. You can read more about this on the EPA's website.
Buyers can inspect and test for many other things, such as testing for mold, termites, soil quality, water quality and for rural properties there are even requirements regarding inspections for wells and septics. Properties that are part of an association have a special review period for the association rules, bylaws and resale disclosure so a buyer can become familiar with restrictions that may affect the ownership of their new property. You can read more about this in my article on Associations 101.
In addition to all of these common inspections, it's also a very good idea to become familiar with local ordinances from the city, township and county that may cover things like whether you're allowed to have an open fire pit in your backyard, keeping a trailer in your driveway, the size of storage shed, who is responsible for the boulevard trees in front of the home, rules on renting out your home and any particular items of special interest to your use of the property.
If a buyer's inspections turn up issues, the buyer has a choice to make. 1) The buyer can proceed with the purchase and accept the faults as long as they do not cause an issue for the buyer's financing. 2) The buyer and seller can negotiate a way to address the faults, such as agreeing to have them repaired or changing the sale price or having the seller pay some of the buyer's closing costs. 3) The buyer can cancel the purchase. Inspection clauses generally give the buyer an opportunity to cancel before the end of the inspection period, but if the buyer has not cancelled then the deal moves on so it is crucial to have any new negotiations completed within the inspection period.
* This inspection gave my buyer an advantage in multiple offers and was an important factor in the seller choosing to work with my buyer.
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