SHORT SALE HOME INSPECTION:
When to do a home inspection for a short sale property?
In most Real Estate transactions there is a buyer’s agent representing a buyer and a seller’s agent representing the seller. In a traditional purchase, the home inspection is generally done within the first week or two after a contract has been executed by both the buyer and seller. This is known as a “home inspection contingency” and allows the buyer and their home inspector the opportunity to carefully look over the home for any potential structural or mechanical defects.
If the buyer does not like the results they generally can exercise their right not to move forward with the purchase of the property. The small investment for the inspection is easily recouped considering the thousands of dollars that was saved from not purchasing a property that might become very costly down the road.
Investing in Research is a wise investment!
In some cases, Buyers will order a home inspection up front before making an offer to purchase on a home that ranks high on the “wish” list. They do this for both peace of mind and also better position themselves to negotiate the best price.
Post agreement inspections can still be negotiated to a certain degree but normally not to the full extent.
If you are purchasing a short sale, things are a bit different.
Normally, Buyers do not want to spend money on home inspections when they do not know for sure whether their short sale offer is going to get approved or not. This is understandable. In many short sale offers, the buyer’s agent will ask in the offer to allow the buyer to do their home inspection after the short sale approval letter comes from the lender.
This allows the buyer to wait until after the lender’s approval to do a home inspection and gives the buyer the ability to walk away in the event that they are not comfortable with the findings. The downside of doing the inspection at this late date is that the inspection is often rushed and far too late in the transaction to negotiate the price, given that most short sales are “as is” transactions.
The reason the seller is doing a short sale to begin with is that they do not have enough money to continue paying the mortgage. Buyer’s need to understand going in that the home inspection is not going to be an opportunity for them to present a laundry list of repairs they want the seller to remedy. Generally it is done as a laundry list of items that the new buyers will need to address in the immediate or in the future.
Lastly, after the lender’s approval, the buyer is not going to be able to negotiate any costs of repairs. When the lender approves a short sale it is based on a definite dollar amount they will be realizing at the closing and they do not allow for further negotiations.
Risk Verses Reward:
This takes us back to the question of whether or not a home inspection should be performed before or after the offer. If a home inspection is done up front and defects are located, then it could be possible to negotiate a better price or negotiate a credit for the needed repairs prior to the offer being submitted to the lender.
For all these reasons it makes sense that the home inspection is done prior to short sale approval. Either way… AmeriHome Inspection Services are standing by to assist you with your inspection needs.
We schedule appointments from sun up to sun down seven days a week subject to availability. Weekend inspections book out in advance and are not always available.
Call today or simply schedule your inspection on this website using the “Schedule Now” tab, on the Home page and then follow the easy instructions.