Understanding the Notice of Inspection Process
If you haven’t purchased a home before, you will get a crash course in real estate vocabulary. One term you’ll likely hear that you probably aren’t familiar with is “Notice of Inspection.” This is a very important document that you must fully understand because it can save you a large amount of money. Let’s take a look at what a Notice of Inspection is, why it is so vital, and what role it plays in the home buying and selling process.
What Is a Notice of Inspection?
When you have a home inspection done, it’s very likely that the inspector will provide you with a list of items that need to be treated, repaired, or replaced. Unless the home is a new build, there will be at least a few minor things on the inspection report that are not in perfect condition. If these items are truly minor issues that you do not mind either fixing yourself or accepting as they are, you simply ignore them, complete the transaction, and enjoy your new home. For example, the inspection report may note that there are light bulbs burnt out or that there is a small hole in a window screen in the master bedroom.
However, if there are major items that need to be addressed, especially if those items include things such as insect infestations or damage that affects your safety, you will want those items repaired or replaced before you buy the home. These are the items you list on your Notice of Inspection document. At this point – everything on your list is negotiable… in some cases, the seller may address these items and make changes to your satisfaction before you move to closing, or the seller may completely reject any corrections, or even re-negotiate the purchase price in lieu of corrections.
When Do You Submit a Notice of Inspection?
When you put in an offer on a property and the seller accepts it, you start a number of different clocks. One of these clocks has to do with the inspection period. Typically, you have a ten-day period until the Inspection Objection Deadline to complete any inspections you want. This deadline is usually three days after everyone has signed the contract. For example, if you put in a bid on June First and the seller accepted and signed the contract on June Second, the third day would be June Fifth, three days after the last signature was added to the contract. Your Inspection Objection Deadline would then run from the Fifth to the Fifteenth.
Once the inspection is done and you have the report, you can put together your Notice of Inspection and submit it. In general, you want to do this as soon as you can so negotiations for a mutually acceptable resolution may begin.
Be certain you are clear on the amount of time you have to complete your inspection. While ten days is somewhat typical, that time period is not set in stone and can be modified to any length in the contract.
What Does a Notice of Inspection Include?
You can basically include anything from the inspection that you want the seller to repair or replace in a Notice of Inspection. In some cases, your lender may require some repairs before they will approve your mortgage; for instance, on an FHA loan, the FHA inspector will require any peeling paint to be scraped and repainted (as an example). Any damage or issues with the structure of the building, anything that presents a safety issue, or any part of the home that is not up to code will most likely have to be addressed before the lender will sign off on the loan.
Additionally, there may be things you may want the seller to repair or replace that are not required by the lender. These include things such as a cracked window, torn or stained carpet, leaky gutters, a closet door that doesn’t latch properly, and other minor or cosmetic items. You can include as many or as few of these items on your Notice of Inspection as you wish.
The seller does not have to agree to complete any of these items that the lender does not require. If they decline to make some of these repairs, you must decide if you’re willing to complete the purchase of the property or if you want to back out of the contract. In some cases, the seller may instead offer to purchase a home warranty for you, may offer to drop the selling price if you agree to do the repairs yourself, or may simply decline to make the repairs.
Your real estate agent is an invaluable resource during this process. They have completed hundreds of Notice of Inspection documents in the past, and they will be able to help you determine what is a necessary repair and what isn’t.
Those in the LGBTQ community may want to seek out the services of a full-time professional gay or lesbian real estate agent. In addition to helping you navigate the buying process, they understand any unique needs you may have as an LGBTQ individual or couple, and may make you feel more at ease. Feel free to reach out to any of the agents at www.GayRealEstate.com, where we have been helping the LGBTQ community with home buying and selling since 1991.