If problems were found on the inspection...

« Back: Have the house inspected «

» Next: Negotiate new terms »

[an error occurred while processing this directive]What do you do if the inspection turned up significant physical problems with the house? That depends on the contract, and whether you paid an Option Fee.

If you put down an Option Fee when you signed the contract, you have three choices:

(1) You can back out now and forfeit the Option Fee.

(2) Or, you can negotiate with the owner to see which items the owner is willing to remedy. Or see if the owner is willing to drop the price of the house a bit. (We'll cover these kinds of negotiations on the next page.)

(3) Or, you could accept the house as-is if the problems found on the inspection were minor, or if you enjoy fixing things yourself.

If you didn't put down an Option Fee, and you wrote into the contract that the seller has to fix problems that were found:

The seller has to fix the problems found in the inspection that the contract requires him/her to fix, and then you'll have to buy the house. (You can have the house re-inspected if you wish to make sure that the inspector agrees that the owner remedied the problems properly. A re-inspection costs a fraction of the original inspection.)

If you didn't put down an Option Fee, and you didn't write into the contract that the seller has to fix anything:

Now you have to buy the house no matter what problems were found. (Your only out is if the contract says you can walk if lender-required repairs exceed 5% of the purchase price.) You could ask the seller to fix the problems, or to drop the price of the house, but they're under absolutely no obligation to do so, and if they so no, there's nothing you can do. Don't get yourself into this position. Either pay an Option Fee when you sign the contract, or write into the contract that the seller will make any and all individual repairs which exceed $500 or so.

Note that if there are significant problems with the house (e.g., foundation, plumbing) your bank might not be willing to go through with the loan unless someone (you or the seller) puts the repair money into escrow to ensure that the repairs will be performed.

Amount spent so far.   Red items apply towards the purchase. Amounts are typical, not exact.

$40

Credit Check

To the Lender

$150

Option Fee

Paid to the Seller. Might apply towards purchase, depending on contract. Allows you to walk away for any reason.

$1000

Earnest Money

Held in Escrow, probably by the Title company

$400

Inspection

To private inspection company to find physical problems with house

$100

Termite inspection

To private company; required by your lender

($700)

Termite treament

(If necessary)

$1690 - $2390

Total




« Back: Have the house inspected «

» Next: Negotiate new terms »

If you liked this site then you might like some of my other sites:

How to Find Cheap Airfare     How to Save Electricity     How to get listed & ranked well in Google

Entire site ©1999-2011 Michael Bluejay Inc. • All information is "use at your own risk"   Contact