Jan 25, 2017
Home inspections are a crucial part of the home buying and selling process. Generally, all purchase agreements are contingent upon a home’s inspection. These inspections - paid for by the buyer - include structural, termite, radon gas, and environmental and sewer lateral inspections.
The standard Missouri residential sales contract includes an extensive section about inspections. Within the time frame of the inspection period, typically 10 days, the buyer must provide a written statement to the seller specifying one of the following options:
Most often when a request is put in writing from a buyer and sent to the seller, another 10 day time clock is activated. Within this timeframe, the buyer and seller negotiate requests and must come to an agreement in writing or the contract is void. During this 10 day period, there are no requirements as to when a buyer and seller must respond to the other parties’ request, only that an agreement is consummated within this ten day period. Often during this time, buyers and sellers are getting bids for identified repairs.
Many buyers are faced with the question of whether to have a seller repair defects or to request a credit from the seller. If the buyer chooses to have the seller complete the repairs, he/she has the right to inspect and approve all repairs. All need to be completed by a professional and all paid receipts must be provided to the purchaser. Often, having the seller fix the inspection requests can be time consuming and problematic. By asking for a credit from the seller, the buyer can then select his/her own contractor, make upgrades, and move at his/her own pace!
Prior to sellers putting their home on the market, they usually fill out a ‘Seller’s Disclosure Statement’. This disclosure has the seller list the history and condition of the property. Sellers should be advised to be truthful and honest when filling out this statement. Defects identified in this document are less problematic than those identified during the inspection period. Identifying a defect on the Seller’s Disclosure does not prohibit the purchaser from requesting the defect be remedied once inspections are performed. Usually the orginial offer from the buyer is made taking the defects listed on the disclosure into consideration and repairs are not requested; however, the purchaser still has the right to request repairs if desired.
Sellers should be prepared for a second small negotiation during the inspection period. Almost all sales contracts have sellers fixing some requested repairs or offering a credit to the buyer to negotiate removal of this contingency. Often sellers try to sell their home “as is”, but rarely does this happen. After initial contract negotiations, the last thing a seller wants to hear is that they will have to give a little more in a week or so!
Requests on a building inspection when reviewed by a seller need to be categorized as reasonable or unreasonable. Sellers should take into account that by not negotiating with the buyer, they may be faced with the same request from a next purchaser later down the road.
Buyers and sellers would be well served to try and keep their focus on the big picture when involved with these inspection negotiations. An experienced and knowledgeable agent can help with this. Often during inspection negotiations, anxiety is elevated and nerves are frayed. Typically the amount of money being negotiated is a very small percentage of the purchase price and the contract should not fall through because of it.
If buyers and sellers are properly educated by their agents in achieving a reasonable resolution of the inspection contingency, a contract rarely fails!
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