Inspection Response

“Inspection Response”
By Steve Meyers
May 28th, 2014

Your “Inspection” has been completed and you need to respond to the Seller prior to the deadline in the Purchase and Sales Agreement. You have Five Options;

Your First Option is to do nothing. By not formally responding within the prescribed time frame you no longer have the ability to terminate the agreement based upon the Inspection or, request modifications or repairs based upon what you learned during the Inspection.

Your Second Option is to respond to the Seller that the Inspection of the property is approved and the Inspection Contingency is satisfied. You’re indicating that you are not going to request or negotiate for any modifications or repairs to the property.

Your Third Option is to respond to the Seller that the Inspection has been disapproved and the Purchase and Sales Agreement has been terminated. If you’ve done everything per the Agreement thus far, your Earnest Money should be returned to you.

Your Forth Option is to give notice to the Seller that you wish to perform additional inspections based upon what you learned in the initial Inspection. The Inspection Contingency Form will dictate how many days you have to perform these additional Inspections. You’ll need to provide to the Seller a copy of the initial Inspection where the Inspector advised you to seek additional expert advice. This usually includes plumbing, electrical, HVAC, roof, insulation, mold, or other experts.

Your Fifth Option is to request the Seller to make specific modifications and repairs to the home. Remember, everything in this category is negotiable. A Seller is most likely to make repairs to health and safety issues but may agree to other repairs. My advice is to create a list of items with estimated dollar amounts to repair (for your own reference) and what you’re willing to do yourself, or pay for, after you’ve purchased the property. Here are several items to consider;

a.) Carpet Replacement – If you request the Seller to replace the carpet prior to sale, he/she will purchase the cheapest carpet available. Why not ask for a discount off the sales price and purchase a nicer carpet. But, if the Seller installs the carpet, it may be part of the overall financing of the home.

b.) Water Heater – If the water heater is older than 10 years, it’s at the end of its’ expected life. Do you want a credit or discount or, do you want it replaced?

c.) New Paint – Unless the walls are trashed, the Buyer generally has the responsibility to decorate (paint) the home.

d.) “Failed” Windows – Double pane windows tend to “Fail” on the southern and western sides of homes earlier than the rest of the home because of the direct sun light. The Buyer should negotiate to have the Seller replace any “Failed” windows.

e.) Rodent Infestation – This is a health and safety issue and should always be requested to be corrected by the Seller.

f.) Minor Items – Items that the Buyer can repair or replace with minimal time and expense should not be included in the Inspection Response for the Seller to perform.

Remember that if there are multiple Buyers seeking the home, the Seller is less likely to agree to perform all of the modifications or repairs requested. Also, items identified in writing must be communicated with your Lender. Some loan programs will not allow the loan to be funded if there are certain items not repaired prior to Closing. For instance, a roof with less than five years left on its’ projected life may not be financeable.

If you have any comments or questions about this article, please email me at smeyers@kw.com.

Steve Meyers is a Managing Broker at Keller Williams Realty in Seattle, Washington. He can be reached at (206) 972-3328 or smeyers@kw.com.

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