How to write home inspection clauses when you are buying or selling Real Estate can make a difference between a deal maker or breaker. A typical home inspection clause by a Realtor is usually sufficient for average Home buyer or seller. But if you are sophisticated Real Estate Investor, you need to protect yourself with proper wording.
- What is the purpose of inspection clause?
- Does a home inspection condition give a Home buyer a right to cancel the
Purchase and sale agreement or the contract any time ?
- Is the Property owners is entitled to a copy of the home inspection report if they want to share the cost of inspection?
- If the report shows only minor problems, is the seller entitled to just fix the problems and ask the property buyer to complete the transaction?
- What happens if the buyer does not obtain a home inspection at all and then tries to get out of the deal?
- Who can be the home inspector?
In general, the ethics have indicated that when buyers are trying to satisfy any condition, including a home inspection condition, they must act honestly, reasonably and in good faith.
If you are buying then the following home inspection condition shall be in your contract
"This agreement is conditional upon the inspection of the property of the purchaser's choice and expense, and receipt of a report satisfactory to him, in his sole and absolute discretion within ten banking days failing which this agreement becomes null and void"
Then you are not satisfied with the inspection report, then you can ask for the deposit to be returned without any deductions and sign mutual release at the same time.
As a result, many sellers try to remove the words "sole and absolute discretion" from home inspection condition clauses.
If you are selling and you must insert following wording to protect yourself by Including additional language that if the amount to correct all deficiencies is less than $1,000, then the seller has the right to correct the deficiencies before closing or within thirty days and have the right to have a copy of inspection report. The inspection must be carried out by licensed or certified home inspector who carries error and omission insurance.
If you are a buyer and any change is made to the home inspection condition clause, you need to review the changes carefully with your Realtor and Real Estate lawyer as your rights might be impacted.
Sellers are not entitled to a copy of the inspection report unless it says so in the clause itself.
If the buyer does not conduct the home inspection at all, or perhaps brings in an
Un qualified person to conduct the inspection, then the buyer must remove this condition in writing within ten banking days as per original contract.
That is why any home inspection condition must be drafted carefully and approved by your Real Estate lawyer before the offer is being presented.
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The above information is provided as a guideline and is not intended to give a professional legal advice. Please consult a real estate lawyer for their opinion on your particular case
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