Steps to buying a house- Home inspection contingency strategies

click to begin

Youtube

So you're wondering about the steps to buying a house and
What exactly is a home inspection contingency?
Well, that's what we're talking about today and we are starting right now
Hey everyone, welcome back to my channel
My name is Harry Moore and I'm a realtor in the Washington DC metro area
I post new videos every week all about
things real estate in the DMV. The home inspection is probably one of the most difficult and
emotionally charged times during the whole home buying process.
Today we're going to talk about the home inspection and
how that process is addressed in the standard contract forms used by real estate agents and their buyers in the DC
metro area
Most people know some horror story about a home repair nightmare that came up either because
it was missed during the home inspection or because the buyer didn't have a home inspection
Or maybe they've seen the movie the money pit with Tom Hanks and Shelley Long and wonder if that could happen to them.
Let's dig in and talk about home inspection options for you to consider when buying a house in the DMV.
There are two ways that most home inspection contingencies are written in the DC metro area.
First let me be clear,
It's not that the actual physical
Inspection is any different its what the options are after the inspection is over and the buyer has gotten the report.
The first option is what I'll call the standard inspection.
This inspection allows for a back and forth between the parties depending on the results of the home inspection.
It's generally considered to be less desirable by sellers and more desirable by buyers
because it leaves the door open to a secondary negotiation after the contract has been signed by all parties
Houses are complicated.
There are lots of different systems that have to come together and work in harmony and no matter how well the seller has
maintained the house
There will be something wrong and a good home inspector will probably find it.
Depending on the number of issues and how serious they are
it's human nature for most buyers to ask for some kind of repairs and
Obviously most sellers would rather avoid that whole discussion if they could. One way to make this scenario
slightly more attractive to a seller in a competitive situation is to tell them that you won't ask for repairs
under a certain value, no nickel-and-diming.
Well, so let me try and explain that you put language in the contract that says you won't ask the seller for any repairs if
the total for all the repairs would be less than say five thousand dollars just to pick a number.
That means that there if there are a bunch of small items, but the major systems are in good condition
Then you probably won't ask the seller for any repairs, but it does give you a backstop if there's some major unanticipated
Issue that comes up during the home inspection. The second type of contingency is what I call the thumbs-up thumbs-down
contingency there's no real built-in mechanism for negotiation in this contingency
After the physical inspection is completed you'd have the home inspection
report you receive it and then you either
decide that you will move forward and take the house or that you're walking away.
This scenario can be very attractive to settlers as the buyers saying right up front from the get-go
that they will not ask for any repairs
period.
No matter which type of inspection you opt for in a competitive offer situation
you want to try and keep the timeframe for the inspection contingency as short as you possibly can,
generally, not more than five to seven days now
Let's take a couple of minutes to talk about an offer with no home inspection contingency in the contract.
There are a couple of ways to do this the first most obvious one would be
writing an offer and not doing any sort of home inspection. This is more than most regular buyers can stomach and rightly so.
Buying a house is a big investment.
It's the largest single purchase that most people make in their lives.
It's a lot of money to spend with no due diligence as to the condition of the property, and not something that I normally
encourage, but in some situations it might be appropriate.
Let's say the buyers planning to do extensive renovations where very little of the original house would even be left
then a home inspection might not be needed, or
maybe the buyer is in the building trades so they might feel comfortable doing their own
"Inspection" of the property when they first go to see it.
I had that happen on a listing a couple of months ago.
It was a house that was built in the 20s and it had a lot of original electrical wiring
Not the panel box
but the switches and a lot of the wires behind the walls and a lot of beautiful old light fixtures and
one of the people who came through the open house was an electrician. While his wife was
upstairs looking at the beautiful living room in the fireplace and the hardwood floors and all that nice stuff
He was down in that unfinished basement given the underbelly of that house a good once-over. The second way to write an offer
without a home inspection contingency is to do what's called a pre offer inspection.
This is where the buyer has a home inspection performed
before they actually write their offer.
Usually it's an abbreviated inspection which only focuses on the major systems.
Then they would decide based on the results of that inspection
whether they're comfortable with the condition of the house or not. If so,
they move forward if
not then they don't write the offer.
The downside is that they may have to spend money for an inspection on a house that they're not going to buy. Back in
2004 to 2006 when the market was really hot
pre-offer inspections were really the only option for most buyers who were unwilling to buy a house without an inspection
It was a really difficult time
Some of my buyers laid out the money for two three four or more
Home inspections before they actually were able to secure a house
But it did give them the peace of mind of having done their due diligence before they made their purchase
So there's one situation when a lot of people think that it's okay not to have a home inspection and that's when purchasing new
construction they think that the Builder and the
County or city code inspections are sufficient, but in my experience with new construction
That is not the way it plays out. The buyers still best served by having a professional home inspection done on their behalf
Sometimes more than once
Depending on how far along the house is when they actually write their offer
So that's an overview of different ways to deal with the home inspection question
Do you know anyone who bought a home without having a home inspection?
How did it turn out for them leave a comment in the remarks and let me know?
I'm Harry Moore with Keller Williams capital properties and I want to say thank you for taking the time to watch this video.
If you liked what you saw, please mash that like button
Happy thumbs are most appreciated
Also, if you want to see more videos about real estate in the DMV
Then subscribe and ring that bell so you'll be updated whenever new videos come out
Make it a great day, and I'll see you again soon

Steps to buying a house Part 4 The hunt begins Steps to buying a house -5 tips for mulitiple offers Real Estate Market 2019 Steps to buying a house 640 BUCHANAN STREET NORTHWEST, WASHINGTON, DC Presented by Harry Moore. 72 Hour Livestream | All donations go towards making a movie (See description) 8813 Bradford Road Silver Spring 20901 How To Buy Fire Damaged Properties Lady Gaga, Bradley Cooper - Shallow (From A Star Is Born/Live From The Oscars) J. Cole - MIDDLE CHILD

Steps to buying a house- Home inspection contingency strategies

Latest Posts