Once the offer and any counters have been accepted by all parties, you are now in the inspection period.
Unless stated otherwise, this is a 10-day inspection period, and the days start from the date the contract or the last counter was accepted. So, if you wrote the offer on June 1, countered back and forth, and the last counter was accepted on June 5, the 10-day inspection period starts on June 5 and ends on June 15, at 11:59 p.m.
The inspection/due diligence period is for the buyers, at their expense, to conduct any desired physical, environmental and other types of inspections or investigations to determine the condition of the property. The buyer will usually have a home inspection and a termite inspection done. The buyer should take this time period to look into any other material facts deemed important, such as close by airports and the area crime rate, etc.
The Buyer Advisory
This is a 14-page document given to the buyer when the offer is written. Most buyers just sign it and never look at it again, but it is a great resource to help guide the buyer through the inspection period and throughout the purchasing process. It is designed to give the buyer information on some of the more common issues a buyer may decide to investigate, along with great websites and resources to use. It outlines the documents the buyer may receive and what to look for. If you are buying a home, I would recommend you take the time to look over the Buyer Advisory, as it really is full of useful information you may otherwise miss.
The Inspections
The home inspection and termite inspection usually are done at the same time. It is much better for everyone if the seller is not present during the inspections, which take several hours. The buyers will meet the inspector and their Realtor at the property for the last 30 minutes. This gives the inspector the opportunity to go over his findings and anything he feels needs to be pointed out to the buyers.
After doing home inspections where the buyer has and has not been present, I can tell you it is so important for the buyer to be there and walk through the home with the inspector. The inspection report is very detailed and can be anywhere from 30 to 80 pages long (lots of photos), which would be very overwhelming if you just received it in an email without any explanations from the inspector. For my out-of-town clients or those who are unable to be at the inspection, I just FaceTime or Skype them in, so they still get to walk through the house with the inspector, see what he is seeing and ask questions.
Buying As Is
With the new purchase contract that went into effect on Feb. 1, one of the major changes was the removal of the Warranties section. Now, properties are sold in their present physical condition, as of the date of contract acceptance. Previously, the seller was obligated to repair certain items, such as heating, cooling, mechanical and electrical systems. Now, the seller is no longer contractually obligated to do any repairs. However, the buyer can and probably will still request repairs on items they would like fixed.
If the buyer is paying full price and only asking for a few items to be repaired, the seller is more inclined to agree to it. If the purchase price was lower than expected, or the buyer is asking for a lot of items to be repaired, the seller may choose to only fix a few of them. This is where some contracts fall apart. Oftentimes, it’s not black and white and requires some creative negotiating to keep all parties happy and the deal moving forward. If the buyer and seller cannot agree on repairs, the buyer can cancel the contract, and the earnest will be refunded. So, it’s important to find a middle ground where everyone can agree.
Seller’s Property Disclosure Statement (SPDS)
This is a form the sellers complete whereby they disclose any material facts about the property known to them, such as if there have been any water leaks, the names of the utility companies and if they are aware of any noise issues, etc. It must be delivered to the buyer within three days after contract acceptance. As a seller, it is very important to answer all questions as truthfully and as thoroughly as possible.
Insurance History
The seller has to provide the buyer a five-year insurance claims history within five days after contract acceptance.
If you are thinking of buying or selling a home, or would like more information on inspections, please contact me directly.
Lorraine Ryall has been a Multi-Million Dollar producer for the past nine years. If you are thinking of buying or selling and would like more information or a market analysis, please contact her at Lorraine@Homes2SellAZ.com, or call (602) 571-6799. Visit her website at Homes2SellAZ.com.