Inspection Contingency | Home Inspection Tips For Sellers… That’s today’s topic and we’re getting started right after
this! ~INTRO~ Hi, I’m Kim Ward, real estate broker in San Diego, California, and expert with
helping people to sell homes in probate or a trust. If you’re new here be sure to
subscribe, and hit the bell button. That way you’ll be notified of my
upcoming videos every week, and you wouldn’t want to miss anything. So, let’s
talk about inspection contingency, home inspection tips for sellers. An
inspection contingency, also sometimes called a due diligence, gives the buyer a
specific amount of time to have the home inspected. Typically between 7 and 17
days of a fully executed contract. I personally prefer 10 days maximum,
because experience shows that once the buyer’s inspections are complete and any
buyer requests for repairs are negotiated 95% of the time the
transaction closes. An inspection contingency protects the buyer… Who can
cancel the contract; or negotiate repairs; or what I like even better, is a
financial credit based on the findings of a professional home inspector. In
California the home inspection contingencies are part of the purchase
contract in most situations home inspections are conducted after entering
into a contract to purchase the house if you’re not sure that a home inspection
contingency is a big deal consider this a few months ago I was helping to sell a
house in San Diego and the buyers submitted an offer that removed their
inspection contingency they didn’t feel like they needed to have one then
shortly thereafter about a week later I receive a phone call from the buyer’s
agent and she says she’s sending me over a request for repair document asking for
a reduction in the price along with her buyers inspection report
keep in mind they had already removed their inspection contingency but now
they felt that they could go back into the house and inspect the house
themselves not even using a licensed inspector what happened was a lot of
back-and-forth days and days of conversations and paperwork the buyer
was asking for a $17,000 reduction in price my seller said no the buyer then
spent a couple of days drafting more paperwork asking for $7000 reduction in
the price my seller said no long story lots of unhappy people including my
seller and we continued on with the contract with no reduction in price
based on this inspection that they should never have had so what I’m saying
is 90% of buyers get a certified licensed inspector to inspect the house
and based on those findings they then ask for repairs and then I help to
negotiate a financial amount of money that goes towards the buyers closing
costs now the home inspection is primarily structural and visual meaning
that whatever the home inspector can see however the home inspector is neither
licensed nor are they qualified to discuss findings that may extend beyond
their areas of expertise so what they do is they write in their report recommend
further investigation by I’m type of specialist like roofer or electrician or
plumber specialist inspections can include the following so for example if
the home’s water pressure is low the home inspector will note that low water
pressure on his inspection report and recommend that the buyer hire a licensed
plumber for further investigation if the home inspector recommends further
inspections in the report the buyer may wish to call a specialist for more
advice home buyers cannot go on and on with various inspections there is a
timeline a date that the home inspection contingency should be released ask your
Realtor or review the purchase contract for that
date in California the buyer inspection contingency does not automatically
expire your Realtor must guide you to take a specific actions such as
requesting that your buyer sign a contingency removal document in writing
then and only then is the inspection contingency removed meaning your buyer
cannot ask for any more additional inspections or additional repairs when
the purchase contract has been negotiated escrow opened the home
inspection should be conducted as soon as possible and if you are working with
a realtor request that they attend the last 30 minutes or so of the inspection
I do this for my clients because I want to have the knowledge of items the
inspector deems defective that way I can thoroughly explain the findings to my
seller who should not be at the home inspection if the home inspector
recommends that you call an HVAC specialist heating and air conditioning
for example to do further investigation of the furnace the buyer might have to
contact several specialists before finding someone that’s available your
real estate agent can help you coordinate these inspections and send
the findings to the seller in a timely manner through their agent remember our
California residential purchase agreements contract defaults to giving
the buyers 17 days to conduct inspections and remember if the buyer
does not release the inspection contingency on the California
Association of Realtors contingency removal documents the buyers can
continue to do inspections a little tip for over 5 years I’ve guided my sellers
to negotiate the inspection timeline to 10 days not 17 then my team tracks the
buyer’s agent to what often feels like the ends of the earth to get the written
documentation removing the contingency it’s always a good feeling when the
contingency removal documents arise because besides the appraisal
contingency having the inspections completed is a huge hurdle towards
getting what the seller wants a sold home the reason that I’m sharing
these insider secrets with you is that not every listing agent is this diligent
if the listing agent never demands the contingency release for inspections
buyers can often skate through the contract without performing that act and
none of the parties might even notice that the inspection contingencies are
still in place by not releasing the inspection contingency it means in
California the buyers can cancel on the day it closes if the buyer chooses and
believe me this has happened so there you go please subscribe hit the bell
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stories or answer your questions just comment below and I will see you next
week