A majority of our home buyers at Luxury Mountain Lifestyles are seasoned in the process of buying real estate, and home inspections are a well-known step in the purchase of their desired property. For our newer Buyers, who are unfamiliar with the process, the importance of an inspection is thoroughly advised and discussed beforehand. Here are the steps of this Due Diligence process broken-down:
Inspection Deadlines
When a property officially goes “under contract,” the Inspection Termination, Inspection Objection, and Inspection Resolution deadlines will need to be met as written in the contract by your Realtor.
- The Inspection Termination Deadline is the timeframe in which the Buyer has a right to have an inspection executed on the property (timeframe will vary from contract to contract but we usually try to get this done within the first week).
- The Inspection Objection Deadline is the date where a written objection is due based upon what was uncovered during the inspection; some items may pose a concern to the Buyer and the Buyer may want these items fixed. A thorough investigation of the property will be written in an Inspection Report by your inspector. Your realtor will then draft the Inspection Objection.
- The Inspection Resolution Deadline is the deadline of the written document in which the Seller addresses the Inspection Objection and both sides, hopefully, come to a mutual agreement.
Choose a Reliable Inspector
At LML, we provide a list of reliable inspectors (as can be a conflict of interest to recommend a certain inspector/company). The inspector is the choice of the Buyer, but we definitely recommend the inspector is an affiliate of Summit Realtors.
Attend Your Own Inspection
It is recommended that a Buyer attend their inspection with the inspector. If the Buyer can’t attend the inspection, we highly recommend they call their inspector and discuss the report.
Review Inspection Report With Real Estate Broker
Upon receipt of the Inspection Report, our team goes over the report with the Buyer and will draft an Inspection Objection based on the items that the clients would like the Seller to address. Please note that if there is something substantial found out about the property, the Buyer also has the right to terminate the contract (they will get their earnest money back but will not get any compensation for the inspection). The Seller will usually agree, sometimes with a bit of negotiation, to repair the items or give the Buyer a $ credit for the items to get repaired after closing.
- If the Seller cannot get a contractor in the property to repair these items, bids, by licensed professionals, will have to be obtained for a dollar amount credit to go to the Buyers. This can be challenging to get contractors to look at something, and complete deadline dates, for a bid these days, but our team works hard to get this done! 🙂
- Sellers can decide not to fix anything as well or “pick and choose” what they would like to fix.
Inspection Resolution
The Inspection Resolution is going to be the written statement by the Seller on what they will repair. Please note that it is important to have PAID invoices, from licensed contractors/handymen, on all the work completed on the property. If the seller does not want to fix anything or give a credit, the buyer has the right to terminate within proper guidelines as well.
In summary, the ultimate goal of a home inspection is to give you the information needed to make an informed decision on the purchase and to PROTECT yourself.
So why have we been seeing many home buyers opting out of their inspection in this market…….
It is no secret that in the last few years there has been a “COVID BOOM” in the real estate market here in Summit County. We have seen prices jump like never before but behind all of this “hoopla” are some very determined Buyers willing to do “whatever it takes” to get a property. Cash is king and with multiple offers on the table buyers are willingly to wave their right for an inspection to get their offer accepted. The less work for the Seller in the offer the more likely they are to accept. But what are the risks of doing this in the end? There are too many possibilities to list, but there is HUGE liability for the Buyer in waiving an inspection.
As also a part of the Due Diligence, the Seller is required to supply a Seller’s Property Disclosure of all the known defects/improvements of the property (the inspector should have a copy for the inspection). However, in the last few years, we have been seeing that these forms are incomplete (even in primary residences where the sellers have lived for 20+ years). Are Sellers intentionally concealing issues because of the market? Without getting into Seller “conspiracy theories”, there are plenty of ways to “sweeten the deal” in a contract without waiving the right to an inspection, so please reach out to LML for creative, ethical, and safe ways of doing this. Our Colorado Association of Realtors legal team is warning brokers of the ramifications for a Seller down the road when a Buyer feels like they paid too much and the property has concealed defects.
***Of course, always seek legal advice from an attorney if needed!***
The cost of an inspection is fairly competitive, but we recommend talking with different inspectors/companies before choosing one as their reports can vary in quality and detail.
Other tidbits on inspections….
Colorado is one of the states that does not regulate home inspectors: https://www.coloradorealtors.com/tag/home-inspection/
Good resource from the National Association of Realtors on inspections and protecting yourself: https://www.nar.realtor/home-inspections#section-166077
Some of our Summit County inspectors (also Summit Realtor affiliates) found under “Home Inspectors”: https://summitrealtors.org/golocal-directory/