BUYER’S DUE DILIGENCE - INSPECTIONS AND REPAIRS
After you conclude negotiations and “ratify” (sign) a contract to buy a home, you will usually have 30-45 days to do your Buyer's “due diligence” before the closing. Most buyers will request both a home and a termite inspection to be done, to make sure the home does not have any major problems.
Your home inspector and your termite inspector may spend anywhere from one to four hours going over the home with a fine tooth comb, noting any defects and items that need attention or repair.
As a Buyer, you will need to produce a Repair Addendum with all your requests for repairs (within 48 hours of the scheduled deadline) for the Sellers to consider.
Keep in mind that, unless the home is being offered “as-is” (like is the case with most short sales and foreclosures), Buyers can normally expect a home that is free of roof and window leaks, free of termites and termite damage, free of mold/fungi infestation and/or damage, structurally sound, and safe (electrical/plumbing).
Everything else which may go beyond “normal” Seller obligations, including cosmetic and minor deferred maintenance items, is negotiable. This means that there will be a second “round” of negotiations when it comes to repairs.
Your REALTOR® will help you figure out which repairs are important and how to write the “Repair Addendum”.
Sit down with your REALTOR® to determine the validity and importance of the issues identified in the inspection and termite/moisture reports. Are they safety/health related? Which issues are critical to you?
Assess the risk/likelihood of the Seller just saying "NO" to some/all of your demands. Are you willing to walk away from the transaction and lose the money you invested in the inspections? (You will normally get your Earnest Money back, as most contracts are written subject to satisfactory inspection results).
The Seller has the option to either do the repairs, pay compensation INSTEAD OF doing some or all of the repairs; or refuse to perform any repairs. You may or may not agree with the Seller's proposal.
If both parties reach a satisfactory agreement regarding the repairs to be done by the Sellers prior to closing, hire your inspector to re-inspect the property after the repairs are made, to make sure they were done correctly by licensed and reputable professionals who guarantee their work, and request copies of their reports and invoices at closing.
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