The inspection contingency or condition allows the buyer a certain period of time after the purchase contract is accepted to enlist the services of a professional property inspector. The inspector will go over the property from top to bottom, evaluating the condition of the structure, plumbing, wiring, roof, and appliances to give the buyer a realistic idea of condition of the property and identify material defects that may affect the market value or the safety of the property. Other inspections such as the presence of asbestos, lead paint, radon, mould and other toxic chemicals may be included in the inspection contingency.
For rural properties, inspections and tests may also be performed to verify if water from private wells is safe to drink, the condition of a septic system, or the flow rate of a well. In some areas, water rights to the property may have to be verified to avoid any violations should the new owner decide to drill a new well. As for the septic system, a contingency clause may ask for approval from the local municipality to build a new septic system.
It is normal for all properties to require completions, repair or maintenance. If extra ordinary deficiencies or defects are discovered during the inspection, the buyer can ask the seller to make repairs or they can back out of the deal. The contingency clauses may specify which party will shoulder the repairs and to what extent. Usually the inspection condition will state that if the repairs will exceed a specific dollar amount or a percentage of the contracted sale price of the property the buyer can back out of the deal. A professional home inspection report specifies the date of the inspection and the status of the property concerned.
The inspector's report is the only documented proof of the actual condition of the property that is being sold. It is a valuable tool that helps you negotiate the sales contract and gives you information about future maintenance projects. The cost of an inspection is well worth the peace of mind it provides.
How do you find the right inspector? Look for a professional inspector, not simply a renovation contractor or a friend who can tell copper from galvanized pipes. You can obtain a list from your real estate agent. Ask for recommendations from friends who have recently purchased properties. Most inspectors have some background in building trades or engineering, and have had additional training related specifically to property inspections. Call several companies, and ask about their background and training, as well as their rates and if they are bonded.