Residential Real Estate 101: The Purchase & Sale Agreement

What is a Home Inspection Contingency Clause?

A Residential Real Estate Purchase and Sale Agreement typically includes several Contingency Clauses. A Contingency is a condition that must be met for the purchase deal to move forward. The contingencies list may include a title search, a buyer’s financing approval, an appraisal, and a home inspection report. A home inspection provision gives the Buyer the right to complete a home inspection to identify potential issues that might require repairs. It must be done within a specific time frame (the Due Diligence Period) and any objections to the home’s condition must be addressed before the objection deadline.

Is a Home Inspection mandatory?

No! Georgia Real Estate Law does not mandate a home inspection. However, a Buyer takes a risk by not scheduling an inspection before moving to a final purchase. Home inspections may uncover an expensive home repair. Buyers should pay for an inspection during their due diligence period to avoid any repair surprises after moving into their new home. If a Buyer waives the right to a home inspection, they accept the property “as is.”

Sellers Disclosure Statement vs Home Inspection Report

A Seller’s Disclosure Statement is a questionnaire completed by the Seller in the pre-listing phase of marketing a home for sale. The homeowner must list any known defects or malfunctions that impact a home’s value.  In contrast, a certified Home Inspection Report is conducted by an objective, third party trained in home inspections and is more thorough than a Sellers Disclosure. A Seller’s Disclosure is informative but does not replace a professional Certified Home Inspection.

Who should a Buyer call to conduct a home inspection?

Some home Buyer clients ask me how to find an inspector. One client thought they might have a good source. “My cousin Bill is a Certified Public Accountant. He’s great at do-it-yourself home projects. In just three weekends, Bill turned his garage into a home gym. He installed a shower and saved money by doing the plumbing work himself. Should I call him to do a home inspection?” My response is NO! I always advise my buyers to hire a Certified Licensed Home Inspector.

What items are included in a Home Inspection Report?

Pardon me your cracked foundation is showing!

Is it hot in here?

A Licensed Certified Home Inspection usually takes two to three hours depending on the square footage of a home. An inspector will examine the general structural condition of a property and all its components; roof, foundation, plumbing, electric, HVAC systems, and evidence of any pest infestations. Inspection results are given to a buyer in a detailed report that includes photos, recommended repairs, and any negative findings that require further inspections. For example: if a foundation crack is discovered the report would recommend contacting a foundation specialist to assess the situation and estimate the repair cost. If the HVAC unit is not cooling properly a home inspection report would advise that an HVAC technician inspect the system for repairs and a cost estimate.

What are a Buyer’s options if a home inspection reveals a needed repair?

• Ask the Seller to reduce the purchase price
• Ask the Seller to pay all or a portion of closing costs
• Request the Seller make the repair
• Move forward with the original offer and assume the cost of the repair after closing
• Withdraw the contract offer

Sellers are not obligated to accept or negotiate a Buyer’s request to address a Home Inspection negative finding. However, Sellers are obligated to disclose the defect to future Buyers if an offer is rescinded and the Seller’s home is relisted for sale.

Pam Peterson
Associate Broker Seabolt Brokers | Christie’s International Real Estate
M: 912.401.2264
O: 912.233.6609
Email: ppeterson@seaboltrealestate.com