The Safety Net Buyers Can't Afford to Do Without

Q: I am a first-time home buyer. I have found a house that is about 35 years old and I plan to submit a contract soon. I have been talking to my real estate agent about the need for a home inspection and she has not been very supportive. She has suggested that if I make the contract contingent upon obtaining a home inspection, the seller may balk. What do you suggest?

A: Why would you buy a 35-year-old house without having a professional inspect the property? Do you know anything about structural systems? Or roofs? Or basements?

Unless you are a professional contractor, you definitely need the services of a competent home inspector. Your contract should be contingent on you obtaining a satisfactory inspection. This means that you will have X number of days (the number to be spelled out in the sales contract) to have the property inspected. If you are dissatisfied for any reason, you have the right to terminate the contract and get your earnest money deposit refunded.

In fact, many buyers give the deposit check to the broker, but add language in the sales contract that the check will not be deposited until the inspection contingency has been removed.

There are two kinds of inspection contingencies.

· General inspection. If the buyer is dissatisfied with the inspection for any reason, he or she may declare the contract null and void, at his or her sole discretion.

· Specific inspection. After the inspection, the buyer provides the seller with a list of specific repairs to be made. The seller has a fixed number of days in which to respond.

For example, let's say you list eight items for consideration by the seller. The seller comes back in a timely manner and agrees to repair six of the problems. You then have a fixed number of days in which to either accept what the seller has proposed, continue negotiations for the remaining two items or terminate the contract.

Sellers and real estate agents prefer the specific inspection contingency. From the buyer's point of view, however, the general inspection clause is the one to use. In this case, the buyer still has the right to advise the seller that there are eight items to be corrected and if the seller agrees to those repairs, the buyer will remove the contingency. But the buyer may be completely turned off from the house based on the inspection, and under the general contingency would have the absolute right to terminate. That option is not available under the specific contingency language.

Under either type of contingency, time is of the essence. If the buyer does not act promptly and advise the seller of the problems (or that the contract is terminated), most standard contracts state that the contingency is "deemed to have been removed" and the contract remains in full force and effect.

How do you find a home inspector?

The best way is word of mouth. If your friends used an inspector and were satisfied with him, that would be the way to go.