In Section 4 I talked about the three milestone dates that you’ll need to know during an escrow today I’d like to do a little deeper dive into the Investigation contingency.
During the 17-day investigation period, it’s really important that you investigated stand and know the condition of the property to unerty prior to purchasing it. Be prepared because there are a lot of things to read that are really important in helping you understand the condition of the home. Included in those reports are disclosures from the Seller. The Seller needs to legally tell you everything that they know about the condition of the home. If the home has a Homeowner’s Association (HOA), you’ll get all the HOA documents, as well as any city and county reports (if applicable to the area). We also have a Natural Hazards Disclosure (NHD Report) that will tell you if the home is in a high seismic area or in a flood zone.
And I highly recommend a third-party inspection company to come in, look at the home, and tell you exactly what the condition is. I tell my clients that at the very least we should do a home, a pest, and a roof inspection. Of course, if there is a pool at the property, that should be inspected as well. Buyers are traditionally responsible for paying for these inspections. I tell my clients that they should budget extra money for these inspections and it’s usually (in my area) about $1,000 for all.
If you can be there at the time of inspection(s), then you really should. Now that you have a clear picture of the condition of the property, you can sit down with your REALTOR and determine what repairs (if any) you’re going to ask of the Seller. You and the Seller can negotiate who’s going to pay for what and your REALTOR will draw up a Request for Repair. All of this needs to be determined and decided (who’s going to pay for what) before you remove the investigation contingency. It’s really important to remember that. Certainly, the worst-case scenario would be if the negotiation breaks down and you can’t come to an agreement with the Seller, the Buyer does have the right to vacate the contract.
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