Here in Texas, sales contracts have language inserted that allows buyers to have a property inspected by a licensed property inspector after the contract has been signed by both the buyer and seller. Within a specified time frame, buyers are allowed to hire and review a completed property inspection report. If something pops up that must be addressed, the buyer then has additional options regarding the contract.
Sellers are required to provide a Seller’s Property Disclosure Statement to all prospective buyers. This statement is an itemized list of known issues, both in the past and present that might need some attention. For example, the property was treated for termites three years ago. Or the dishwasher doesn’t rinse properly or the HVAC system doesn’t cool as well as needed. Whatever the seller knows about or should have known must be in writing and available for review.
However, a seller won’t always know every potential issue. That’s where an inspection comes to play. Depending upon the size and scope of the property, an inspector crawls from basement to attic over the course of two to three hours searching for problems. If none are found, the sale moves forward. If there are issues, they need to be addressed.
Say an inspection report is returned and mentions the back deck foundation needs repairs as does the backyard fence. The hot water heater is not only out of code but doesn’t heat properly. The buyers determine the back deck, fence and hot water heater replacement will cost $4,500. A new offer is made to the seller to fix the repairs or reduce the sales price in the amount of $4,500. The seller is under no obligation to do either and can refuse. However, if refused, the seller’s disclosure statement will need to be updated reflecting the new information and quite possibly the list price adjusted.
If the seller does agree to make the repairs, FHA lenders will require the repairs be completed before a closing can take place. If the repairs are of little or no consequence, such as a light switch not working or a leaking outdoor faucet, it’s likely those problems won’t be a major issue.