By: Cathy Strini
Having your purchase offer accepted is one of the more exciting moments in the home-buying process, especially if it has come after an exhausting search! However, it is important to remember that this is not the end of the whole process, but rather the beginning of the escrow period .. which generally lasts another 30-45 days.
Escrow is defined as a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of a particular condition or event. Basically the escrow period ensures that no monetary funds, or the property itself, changes hands before all the instructions detailed in the contract are met. When all the conditions are met, the escrow is “closed” and the deal is complete. (Celebration time!)
One condition that must be satisfied before closing escrow is the home inspection contingency. *Note: when drafting your purchase offer, you may choose to waive this provision, forfeiting your right to conduct inspections.* This contingency states that if a home inspection reveals significant defects, the buyer may back out of the offer within a certain timeframe without being penalized. A less dramatic (and more common) outcome is that some defects will be found and the repairs will be negotiated and delegated to either the buyer or seller. This is one part of the process where your real estate agent is particularly essential! As “professional negotiators” it is our duty to get you the best deal and also to ensure that you know as much as possible about your home’s condition before you move in.
The inspection process generally starts with an inspector physically examining the property from the roof to the foundation. This process could take around 2-3 hours, during which time the inspector will assess the condition of various systems including plumbing, heating and cooling to identify any trouble spots. He or she will then detail their findings in a written report within 24 to 48 hours of completing the physical inspection.
From there, the buyer can review the report with a general contractor to determine which repairs are recommended or are time-sensitive. This may also be the time to conduct more in-depth inspections (see page two of the attached Buyer’s Inspection Advisory for a full list of available inspections). As a buyer, the choice (and usually the cost) of the inspector is up to you. Inspection prices vary, based both on company and type of inspection, but some (such as termite) may be free and then offer a quote following the report. As always, do your research to ensure that you not only get a fair price, but also a qualified and thorough inspector! You may refer to your realtor for their suggestions of which companies to use, but ultimately the decision is yours to make and are encouraged to do your research to make sure you higher a company you are confident in.
We know this list can be over-whelming! Every buyer has their own agenda and priorities, so every experience is different. However, we have found that clients usually like to conduct sewer-line inspections, especially when the home has been vacant for any amount of time or if there are mature trees on the lot. Inactivity may result in defective pipes, or tree roots may wrap around them and need to be removed.
Roof inspections are also common, especially with tiled roofs. Roof damage or missing/broken tiles could allow water to enter the home, leading to costly repairs both inside and outside the home. Buyers also commonly choose to do chimney inspections, as unstable foundations or seismic activity may make using your fireplace a hazard!
The inspection period can be stressful – it is never fun to find defects in your home. However, identifying these issues and negotiating who is responsible for fixing them prior to closing escrow could save you a lot of money (and headaches later down the line!)