Your sales contract will have wording that allows you to back out of your contract and still receive your deposit back or allow you to adjust your offer. A home inspection is optional but highly suggested. A professional home inspector will crawl through your potential purchase from the basement through the roof making notes from a list of literally hundreds of physical and mechanical features of the home. Features that you want to know about.
The inspector will make an examination of the foundation and if there are any indications of a problem it will be noted. If there is a foundation issue, a structural engineer will be contacted to see if indeed the foundation has some serious problems. If the foundation is in need of repair, mortgage companies won’t place a loan on the home until the foundation is completely repaired and inspected once again. Without an inspection, you might not have noticed a slight crack alongside a door jamb but to professional, that defect would be noticed right away.
The inspector will check out the heating and cooling systems, the plumbing, electrical and make note if anything is currently out of building code. The inspector flips light switches, turns on faucets and cycles the dishwashing machine. Once the inspection is completed, it will be returned to you for your review. You can expect to receive your inspection within one to three days after ordering one.
Once received, you and your agent will review the items listed. The inspector will mark the items reviewed and check whether or not the item is in good order, needs attention or needs replacement. If all is well, you may move forward. If all is not so well, it’s time to review your initial offer.
The sales contract said $335,000 but the inspection noted that the hot water heater doesn’t provide hot water. The staircase railing needs to be fixed and the showers in the main bedroom constantly leak. There are also three thermal windows that need to be replaced. Working with your agent, you decide there’s about $4,000 of work that needs to be done. The sales contract noted the home was to be sold “as is” but it also says you can make another offer after an inspection. You do so and reduce your offer by $4,000 to $331,000.
The seller then reviews your offer and can accept the new offer, reject it or counter. Negotiating a sales contract can go back and forth several times but don’t feel rushed but instead take your time and let cooler heads prevail.
You have finally decided on a sales price of $331,000. It’s time to move to the next phase.