This is a new sponsored column written by Kevin J. Wood, a licensed Realtor© in the District of Columbia and surrounding area. For more information on buying or selling a property, feel free to contact Kevin at 202-297-9753 or email him.
My clients, at least my first-time buyers, are normally thrilled when their offer on a property is accepted. By this point, in D.C. anyway, they have likely been outbid at least once, and now they are on the road to homeownership. Yay! But wait. They know there are more steps along the path to closing, but some don’t know how critical the next big hurdle is: the home inspection.
The home inspection is normally completed 3-10 days after contract ratification (it’s negotiable, but the sooner the better). It involves the buyers bringing a home inspector of their choosing through the property they are under contract on and spending 1-3+ hours in the place (shorter time if it’s a condo or co-op, longer if it’s a house).
Buyers pay the inspector themselves. Costs vary, but for a typical DC row house, expect to pay $350-500 or so. A good inspector will test everything, and a smart buyer will be there for the inspection and follow the inspector around as they do the inspection, asking questions and learning about the property and how things function. The inspector will open and close all the windows, put the washer/dryer through a cycle, test the dishwasher, test ac/heat, evaluate the roof, open the electric panel box-and more.
What is a Pre-inspection?
Sometimes it makes sense to do what’s called a pre-inspection, which is a home inspection done on a property you’re not yet under contract on. Why do this? In D.C.’s super competitive market, there are often multiple offers on any given property. By doing an inspection before you submit an offer, you remove a contingency from your offer, thus making your offer stronger. A seller choosing among multiple offers will likely pick an offer with the fewest contingencies.
The downside to doing a pre-inspection is that you pay the inspector regardless of whether you get the property or not, and if you end up making several offers and doing pre-inspections on each, your out of pocket costs can add up quickly. Some buyers opt to take third route by not including a home inspection contingency and not doing a pre-inspection at all. I’ve never advised a buyer to waive a home inspection, but some buyers in this market are willing to take the risk.
After the Inspection:
So, the inspection report is in, and there are 20 things the inspector has called your intention to. What are you options?
1). You can walk away from the contract without penalty (meaning your earnest money deposit will be returned to you), provided you inform the sellers prior to the expiration of the home inspection contingency.
2). You can ask the sellers to correct some or all of the issues on the list by providing them a copy of the home inspection report and an addendum listing requested repairs. Sellers aren’t obligated to correct the items on your list, in which case the contract can be declared null and void or you can proceed with the contract and accept that there are issues with the property that you’ll have to take care of once the property becomes yours, at closing.
3). You can request a dollar amount in lieu of repairs. Sellers are not obligated to provide a credit for the repairs, but if they are inclined to do negotiate, it’s sometimes easier to provide a credit versus getting a contractor or handyman in to fix things before closing.
So one of the most stressful parts of the buying process is behind you. You and the seller have come to terms, one way or another, with the items needing to be addressed in the home inspection report, and that contingency has been removed. Most parties in involved in your purchase now give a small sigh of relief. There are still hurdles to be crossed before closing (appraisal, loan approval), but you’re path to closing is now a lot clearer.
For more information, or for a free real estate consultation, please email me at [email protected]