Your offer has been accepted! Congratulations! What comes next?
The inspection period is used to conduct all of your due diligence on the property you are purchasing to ensure there isn’t anything you missed. a 10 day inspection period is written into the contract, but sometimes these can be lengthened or shortened for a multitude of reasons. During this time, you have the right to cancel the contract and receive a full refund of your earnest money. Once the inspection period ends or we submit your Buyer’s Inspection Notice, whichever occurs first), you are no longer able to back out of the purchase due to the condition of the property. You are, however, able to back out if the property fails to appraise for the purchase price, you don’t qualify for financing or several other options, unless there is something written into the contract stating otherwise.
As a buyer, you have the right to hire a licensed home inspector to inspect and evaluate the property. We always recommend that our clients obtain home inspections, but you can also waive the right to a home inspection. The goal of an inspection is for the inspector to give you an objective, independent and comprehensive analysis of the overall condition of the property and to check for any safety issues that might otherwise be unknown.
A professional home inspection will cover the structure, construction and mechanical systems of the property. Once complete, the inspection report will be emailed to you for your review along with detailed notes and photos. Then, you will have the opportunity to:
- Cancel the contract due to the condition of the property.
- Provider the seller(s) an opportunity to correct any items you disapprove of within the inspection report.
An appraisal is an opinion of value and is typically required by the lender financing the property to ensure the home is enough collateral for the loan amount you are receiving to purchase the property. Although the primary goal of an appraisal is to justify the lender’s investment in your property, it also protects you from overpaying. If you are paying cash for a property, an appraisal is not required, but certainly recommended.
If the appraisal does not meet or exceed the purchase price of the property, you will have several options:
- Pay the difference between the Purchase Price and the Appraised Value in cash.
- Renegotiate the Purchase Price with the seller(s).
- Contest/dispute the value with the appraiser to see if we can get the value increased. (Perhaps the appraiser missed something or isn’t familiar with the area.)
- Cancel the contract and receive a refund of your earnest money.