This is the second installment in our 7 part series attempting to familiarize first time homebuyers with the real estate purchase process. Even if you are not a first time homebuyer, and have purchased or sold a home before, you may find this series an informative refresher.
In the last article, we spoke in very general terms about what professionals you will work with when purchasing a home. This included a real estate agent, an attorney, a lender, and an inspector. This article will look more particularly at the importance of a thorough inspection.
The importance of conducting a thorough inspection before contact terms are negotiated cannot be overstated. Most real estate in New York is sold “as is”. This means that, unless a specific exception exists in the contract, the state of the property, and structures on the property, as they exist at the time the contract is signed is the state in which you will purchase and accept possession. It is extremely difficult to negotiate for any credits or repairs after the contract is signed. For this reason, make sure you review your inspector’s credentials, and social media or client reviews carefully. If at all possible, accompany your inspector while the inspection is being conducted. You may see something he or she does not. Although not common, my office has, on several occasions, advised clients to consult their inspector a second time before signing the contract, based on something they witnessed which was not within the inspection report. This can help to ensure that no unexpected repairs or issues will confound the sale.
The Report
After an inspection is conducted, a report will be generated. It is important that you share this report with your attorney and real estate agent. You should not, however, unless legally required or required as a pre-condition to financing, share this report with your lender. The report is confidential between you and your inspector, and the agents and representatives necessary to complete the sale. You need not share this report with the owner, either. You should make sure you and your agent understand who can and who cannot view the report.
Your inspector will populate the report with specific deficiencies the inspector identifies during the inspection. The report should also explain why the condition was a concern, the standard against which the deficiency is compared, and what should be done to remedy the condition. You and your real estate agent will then use this information to negotiate the price, credits and potentially repairs that must be done to remedy items of concern in the report. In determining your priorities in negotiating to address items in your report, you should ask yourself these four questions:
Can the condition be remedied?
What would the cost of the remedy be if I, as the future owner, were financially responsible for it?
Am I willing to accept the discomfort, stress and/or potential liability posed by the condition as a temporary or permanent (if there is no acceptable remedial measure or the remedy is cost-prohibitive) condition on the property, if I should own it?
Will the condition potentially be an impediment to completing the sale?
Keep in mind that when making repairs to a structure, additional items of concern can sometimes be discovered. If the repair would be cost-prohibitive, based upon your budget, try to bargain with the seller for them to remedy the condition. If the Seller is to remedy the condition before the closing as part of the contract, it would be prudent to insist that a licensed contractor be hired for the work. Consider getting your own estimates for how much the work would cost.
In conclusion, having a thorough home inspection from a reputable home inspector you trust is an important way to avoid difficulties later on. Therefore, review your inspector's credentials, and try to attend the inspection with your inspector, to make sure the review is thorough and that you are satisfied that all potential issues have been identified.
Our office would love to be part of this fantastic step, and to help guide you through one of the most important steps you can take to secure a bright future for you and your family. If you would like to discuss a potential home purchase, don’t hesitate to call us. You can reach us by phone by navigating to our contacts page, or by calling us a (914) 214 9032 or (718) 614 8739.
Here are some helpful links which can provide additional information on where to find, and how to choose, the right home inspector.
The International Association of Certified Home Inspectors - Information about home inspections and links for locating home inspectors. 0
The American Society of Home Inspectors - Information about home inspections and links for locating home inspectors.
The American Society of Home Inspectors (NY Metro Chapter) - Information for NYC residents about home inspections and links for locating home inspectors in NYC.
Inspect America - information on how to find a home inspector, credentials, affiliations, and the inspection process.