You’re about to buy your first house, and you have all of your ducks in a row. You’ve prequalified for your mortgage, found a home that suits you and had your offer accepted by the seller. There’s just one problem: The home inspection revealed major issues with the house. Home inspection problems, such as leaks, a cracked foundation or major issues with the home’s electrical system, can throw a wrench in your home buying plans.
There is a way to work through the issues, though. It involves working with the seller and knowing when to throw in the towel.
Know your contract
When you put in an offer on a home and the seller accepts the offer, the next step is for both of you to sign a real estate purchase contract. In Atlanta and throughout the state of Georgia, the contract must contain specific information to make it complete. Many contracts contain contingency clauses, or conditions that must be met before the contract becomes effective.
As a buyer, it’s in your best interest to have a contingency clause concerning the home inspection. The phrasing of the clause is particularly important. If the contract states that the inspection is for your information only, you don’t have many options if home inspection problems arise. If the clause states that you and the seller will work together to fix the problems, that’s usually much better for you as the buyer.
Work with the seller
Depending on the scope of the problems, you might be able to work with the seller to come up with a solution that satisfies both of you. For example, if the home inspection reveals that the water heater is old or broken, the seller might agree to replace it or to leave a sufficient amount of money in escrow for you to repair it yourself after the purchase.
While the seller can take care of the repairs herself, it’s often better to ask for a credit or payment. That way you can guarantee that the repairs are done well and meet your expectations.
Walk away from the home
The contingency clause should give you the opportunity to walk away from the deal if you and the seller can’t come to an agreement about the problems and repairs. You should also be able to walk away if the cost of fixing all the issues with the home prove to be too expensive. For example, if the house has a major foundation problem or has had a leaking roof for years, the cost of repairs might be tens of thousands of dollars.
It may be hard emotionally to stop the sale, but as long as the contract is worded correctly, you should be able to walk away without penalty. Make sure the clause gives you the option of dropping the deal if the inspection reveals costly issues so that you don’t lose money or sleep over a house that’s not what it seemed.
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