In the last newsletter, I discussed the Inspection Period from a Buyer’s perspective. This time, I would like to cover the Seller’s responsibilities during the Inspection Period. The Seller must cooperate and make the property available for a Buyer’s inspection. The Seller must disclose any known issues and/or material facts about the property. I always attend the Buyer’s inspection and request that the inspector perform a “wrap-up” or “summary” at the end of the inspection so I can make a note of any important findings. After the inspection, the Buyer will either accept the property “As Is” or if there are any significant problems that were not readily and visibly observable or disclosed prior to the Inspection, the Buyer might request a credit at closing or for the Seller to make repairs prior to closing. The actual dollar amount of the credit can be negotiated between the Buyer and Seller with the assistance of their Realtor(s). If the Seller does not agree to provide a credit or do repairs, then the Buyer is entitled to a refund of their full deposit as long as the Inspection Period of the AS IS contract has not expired. I recommend a Release and Cancellation form be executed for the protection of all parties. However, the Buyer may not choose to exercise their option to be released from the contract and will proceed with the transaction.
It is customary for the Buyer to provide the Seller with the Inspection Report when requesting a credit or repairs. I recently had a colleague who lives in another state discuss an alternate method when representing a Seller; they do not review the Inspection Report – rather, they obtain the desired dollar amount for a credit or the Buyer’s repair list. The reasoning is if they are not provided with an Inspection report and the current deal falls through, then the Seller or Seller’s Realtor is not obligated to disclose any issues found by the former Buyer’s inspector to the next Buyer.
This brief informational article focused more on Seller aspects of the Inspection Period, click here to read my previous installment … Buyer responsibilities during the Inspection Period of an “As Is” purchase contract.