After your purchase agreement is accepted you will usually have a window of time to perform inspections. This is your chance to investigate the condition of the property. The most common inspections obtained are the home, roof, and termite reports.

Home Inspection

The home inspection is a general overview of the house, outlining the materials used, the useful remaining life of the structures, and any notable safety or health issues. Pictures are included. As a future homeowner, you will want to look over these items to see which items will need immediate action after possession. Earmarking the document for this purpose will keep you updated on maintenance. Generally, smaller issues can sometimes grow into larger issues over time.

Roof Inspection

While the home inspection mentions the roof, a separate roof inspection is always preferred since it is likely to be more detailed and generated from a roofing contractor (versus a more general contractor or inspector). The roof will mention the immediate deficiencies and the remaining useful life of the roof. An additional charge could get you a 2 year warranty on the roof if you elect the company for the repairs.

It’s best to make roof repairs over the summer while roofing contractors are not busy. I have tried to setup roof repairs during the rainy season for my clients and it is not fun since roofers are booked months in advance.

Termite Inspection

The termite inspection does not only look out for termites– it looks out for damage to any wood members in the house, whether it be from termites, or fungus damage. The findings should be read together with your real estate professional. A bid for work can be found at the end of the document. The lender generally does not have access to this document unless it is explicitly stated in the purchase agreement, however some government related financing agencies may require that work from the termite inspection be completed before loan funds can be given to the escrow company. This is called Section 1 Termite Clearance.

Dealbreakers

Sometimes after review of the report, there might be substantial work in one area of the house that the buyer cannot afford or prefers not to repair. In this instance the buyer has the right to back out if the inspection contingency exists. An alternative to backing out would be to return to the seller to renegotiate the price. Renegotiation will change the original terms of the contract so expect the seller to defend the original terms of the contract, and proceed accordingly. I really cannot specify what constitutes a dealbreaker. People who want turnkey houses may be very picky over those who have decided in advance that they are willing to make repairs.

When to Repair

Buyers, as future homeowners, are at a significant advantage when they can repair after close of escrow versus repairing before escrow closes as a condition of loan funding. Making repairs after close of escrow allows homeowners to shop around the work and the bid and potentially secure same quality contractors at a lower cost. The homeowner may even be able to some repairs themselves. On the contrary, when buyers must repair before close of escrow, their options may be limited only to those contractors who can make the repairs in a timely manner. The repairs may need be done exclusively by a licensed contractor which may limit the buyer’s ability to make the repairs themselves since doing so may pose a risk to their loan funding.