BUYER’S DUE DILIGENCE - INSPECTIONS AND REPAIRS
After sellers have “ratified” (signed) a contract to sell their home, the buyers will have some time to do their “due diligence” before the closing. Most request a home inspection to be done as part of their due diligence, to make sure the home does not
have any problems. A home inspector will spend anywhere from one to four hours going through the home with a fine tooth comb, noting any defects and items that need attention or repair. The buyer’s REALTOR®
will normally produce a “Repair Addendum” with all their requests for repairs for sellers to sign. Keep in mind that, unless
sellers are offering the home “as-is”, buyers normally expect a home that is free of leaks, free of termite, mold and fungi infestation and/or damage, structurally sound, and safe.
Everything else which may go beyond “normal” seller obligations, including cosmetic and minor deferred maintenance items, is negotiable. This means that there will be a second “round” of negotiations when it comes to repairs.
Buyers will prepare the "Repair Addendum" alongside their REALTOR ®
include all of the repairs they would like the Sellers to perform.
We provide a variety of services throughout the real estate transaction to help our buyer clients
make informed decisions. One of the key aspects of the buyers' due diligence is performing inspections such as the home inspection (which
checks structural integrity, mechanical systems, appliances, plumbing, electrical, etc.) and the pest/termite inspection (which checks for termites, fungus, wood-eating insects, etc. and in South Carolina produces the CL-100 Report).
Some of our value-added services include:
- Recommending experienced home inspectors, termite inspectors, structural engineers, mold inspectors and other specialty inspectors, as may be required.
- Scheduling and attending inspections
- Helping interpret the findings of the inspections, write a list of requested repairs to pass on to the sellers
- Negotiating repairs or price reductions/concessions en lieu of repairs
- Protecting our buyer clients' earnest money and best interests in case of a dispute
Inspections are normally thorough and can identify major and minor issues. It is important to remember that inspectors are limited to visual observation and that they cannot do any destructive testing nor they are able to move furniture around. Although
inspections minimize the risk of buying a "lemon", it does not eliminate it entirely.
In the end, almost every issue can be corrected, and it becomes a matter of how much it would cost to do so. We provide current market information and experienced advice, so our buyers can determine whether the total cost of purchase plus the cost of
repairs make sense, or whether it makes more sense to walk away from the transaction and find a new home that is in better condition.
When sellers receive the “Repair Addendum” from the buyers, they will:
- Sit down with their REALTOR® and determine the validity of the buyers’ requests;
- Estimate how much these repairs would cost to do;
- Sellers will assess with their REALTOR® the risks of just saying "NO" to buyers who are making demands they consider to be unreasonable (most contracts are signed “subject to inspections” so if you don’t arrive to an agreement for repairs that is satisfactory to both parties, the buyers
can walk away from the contract and get their earnest money back)
- Sellers have the option to either do the repairs, or offer to pay compensation to the buyers INSTEAD OF doing some, or all of the repairs; the buyers may or may not agree with your proposal.
- Once both parties reach a satisfactory agreement regarding the repairs to be done by you prior to closing, hire licensed and reputable professionals who will guarantee
their work, and give copies of their reports and invoices to the buyers at closing. Arrange to do the repairs as far ahead of time as you can, to avoid last minute complications which may jeopardize the transaction.
Whether it's on the buyers side or sellers side, our team has ample experience negotiating repairs terms and conditions. Our expertise and team atmosphere will make the stressful Due Diligence period an easy and even enjoyable aspect of the home buying