Step #7— Inspection Contingency
The easy step-by-step tutorial designed to make home-buyers knowledgeable and confident.
Hey there — if you are just jumping into this article series, welcome! I’ve spent the last seven weeks breaking down how to buy a home one step at a time. Basically, I’m an expert of all things home. Helping my clients as they buy their second property, or holding their hand until they get the keys to their first dream home. Over the years I started to hear similar questions asked again and again. It made me realize that with a few simple fundamentals, anyone can understand real estate. You just need the right information, explained simply, in an organized fashion.
Thus, I created this easy step-by-step tutorial designed to make any home-buyer feel knowledgeable and confident. My goal is simple: to show you that you don’t need to be an expert to understand real estate. If you’d like to go back to week one, click here. Today, I am covering the Inspection Contingency.
The inspection contingency is usually the first contingency period to end so it’s important to prepare before entering escrow. Before escrow you should discuss with your agent the different types of inspections you can order. That way, your agent can hire the inspectors ASAP to ensure that each inspection is done on time. Remember, some inspectors needs a few days to write the report and email it to you, so you need to configure that into your timeline.
There are several inspections you can choose from. Depending on the property, some are more helpful than others. For example, on hillside homes or homes by the sea the 5 top inspections people order are:
(1) General Inspection
(2) Sewer Inspection
(3) Chimney Inspection
(4) Roof Inspection
(5) Termite Inspection
There are even more inspections, but don’t worry because a good agent will know them all and help you go over all your options. Each inspection has its own cost and its own report. However, they are important expenses because they may help you find issues that were not disclosed, or even unknown, by the seller. When this happens it is normal to ask for a ‘Request for Repair’ or a credit. This will require another round of negotiations, so let your agent know as soon as possible that you want to ask for a repair or a credit.
You aren’t the only person busy putting in orders. While these inspections are underway you’ll be receiving reports of your own! These are called the Seller Disclosures, which will inform you of any history the property may have. You will also receive a Title Report, also known as a ‘Prelim’. You should go over all these reports with your agent to confirm you are happy with the property’s history and current condition. Pro tip, you will also want to call the Title Rep to make sure that the Title/Prelim is clear of any unexpected issues.
Once you have accepted the reports, and agreed on any applicable repairs or credits, it is time to release your Inspection Contingency. Your agent will have you sign a ‘Contingency Removal’ form checking off that the inspections you wanted were conducted and that you are accepting the results. Unless you are an all cash offer, you will likely have a few more contingencies to remove before your deposit goes hard.
Typically, the next contingency is for the appraisal. I’ll be releasing a video, along with an article, next Thursday solely dedicated to the Appraisal Contingency. Before you go, I want to applaud you for taking steps to education yourself. Along with providing this information every week, I’ve also designed my step-by-step tutorial to be interactive. To help each home-buyer get the most out of this series, I’m making myself available to answer any questions you may have. Don’t be shy! This tutorial is about empowering YOU, the buyer, as you set out on your mission to purchase a property.
For the fastest response you can comment on my Step #7 Video or reach out on social media here.
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Looking forward to seeing you again next week!
-Lauren “Glasses” Biedenharn
