You have a house contract, now what?

By Lara Dolan, The Craft Dolan Team at Ansley Real Estate

After weeks, months, or even years of searching online sites then touring homes with your Realtor, you’ve finally found THE house, made an offer and secured a binding contract. Celebration and excitement are warranted, but this is just one step in the home-buying process. In Georgia, most Purchase & Sale Agreements have a due diligence period during which the buyers may be released from the contract for any reason or no reason the true intent being to provide the buyer with an opportunity to inspect the home and property. This due diligence period is typically 5-14 days; understandably buyers want as much time as possible, and sellers want a short timeframe to limit how long the property is off market in case the deal doesn’t materialize.

Most sellers provide a Seller’s Disclosure which the buyer should review prior to making an offer. The seller is obligated to disclose known problems, repairs and defects. Most buyers will hire an inspector who will spend several hours at the property investigating the structure, roof, HVAC, electrical, plumbing and other features and systems. An inspector must be licensed, knowledgeable and able to point out issues without creating unnecessary alarm.

I recently met a couple who purchased a home during the competitive 2021 market. Their urgency to find a property and get an offer accepted resulted in a sloppy inspection and undiscovered defects that have since cost them more than $50,000. In this case, if a structural engineer had been called, they would have noted visible defects. The buyer may still have purchased the home but likely would have negotiated consideration from the seller or at a minimum, finalized the purchase with a better understanding of the issues.

One of our preferred inspectors is Mark Caffiers with D.S. Murphy Inspections. Mark is the perfect example of experience matters. Mark relayed a recent story of an inspection at a home with an old clawfoot tub. “Sometimes intuition helps,” he said. “These old tubs can be notorious for issues with the drain trap below the floor. So, I filled the tub, let it drain and initially there was no leak. Two hours later I took another look and found a bit of water in the screened-in porch…right below that tub.”

We work with experienced inspectors, but they recognize they are generalists. In many homes it is prudent to have specialists thoroughly evaluate structures and systems. In tight due diligence timeframes, it is good practice to set these appointments in conjunction with the main inspection rather than wait until the inspector’s report comes out recommending further evaluation. For example, the buyer may want the HVAC, roof, septic, pool, and potentially structural, electrical and plumbing specialists to review the home particularly if the home is older or if there are visible items that raise an eyebrow.

Depending on the size of the home, the general inspection should cost $450-800, and most inspectors offer a radon test option. Additional specialists mean more cost, but $1000-$1500 on inspections is money well spent if it provides the right insight into what is most buyers’ largest financial invest- ment and asset.

We maintain a list of experts who are eager to assist our clients with all types and levels of inspections and because of our longstanding relationships, our referral partners are typically available on short notice.

For sellers, inspections can be nerve-wracking, and it can be easy to take an inspector’s findings personally. “A good inspection report will be well written and just the facts, inspectors should not be hypothesizing on what might happen, but should state current conditions,” says Caffiers.

A good inspection protects everyone in the transaction and gives both parties the opportunity to negotiate repairs and sometimes financial compensation. On both sides of the deal, experienced Realtors can assist in this negotiation; helping the buyer determine what is most important and the seller determine which items to agree to address and which not to.

The goal of due diligence? Ensuring both parties understand and have confidence in the property central to the transaction so that signing at the closing table is a happy, amiable experience for everyone.