5. What to Expect When You Receive an Offer
Serving Hampton Roads
Last Stages
This is so exciting! You are officially under contract with a buyer and moving towards closing on your home. We just have a couple more stages to navigate together. The buyer will be scheduling a home inspection, moisture termite inspection, and appraisal, typically in that order. For each appointment, we will do our best to work around your schedule so you can vacate the home for the buyer and their inspectors. Either I as your agent or the buyer’s agent will be present at each inspection to ensure security.
Home Inspection
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What Is Inspected?
Roof & Attic
Exterior & Siding
Foundation, Basement & Crawl Space
HVAC Units and Ductwork
Plumbing System
Electrical System
Insulation
Doors & Windows
Light Fixtures
Any Negotiated Appliances
Attached Garages
Garage Doors
Grading & Drainage
All Stairs
Any Negotiated Outbuildings
What Are They Inspecting For?
Safety Standards Met
Systems Function as Intended
Repairs Needed Now
Maintenance Items Upcoming
Home Inspection | What is the Timeline?
A home inspection is usually ordered as soon as the contract is accepted, and takes place within an agreed upon number of days, usually 5-10 days. The buyer can decide to either accept the home as it is, negotiate repairs, or cancel the contract. Negotiating the repairs requested after the inspection can take up to 5 days.
Home Inspection | What Repairs Can Be Asked For?
A buyer can request you to repair or change anything on the home inspection or even items not covered by it. However, you are not held responsible to agree to and pay for those items unless they are required by another inspection, which we will discuss. Typically, buyers are advised to focus on repairs that are needed for the home to be safe and function well, and leave any cosmetic or optional repairs for their own homeownership.
Home Inspection | Who Can Do the Repairs?
For all repairs made during the home sale process, a licensed contractor is required. They will provide invoices which will go to the settlement company, which enables you to pay out of closing using your equity rather than coming up with the money before closing. They also insure their work in case anything happens later on, so there should be no issue that arises for you or the buyer. Review my list of recommended vendors if needed, or feel free to research and choose your own contractor.
Home Inspection | Who Pays for the Inspection?
Typically each buyer pays for their own home inspection and chooses their own inspector.
Moisture Termite Inspection
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What is Inspected?
Foundation, Basement, & Crawl Space
Attic
Inside Floors and Trim
What Are They Inspecting For?
Moisture Presence or Damage
Pest Presence or Damage
Fungal Presence or Damage
Moisture-Termite Inspection | What is the Timeline?
A moisture termite inspection is typically ordered soon after a contract is accepted, and delivered within an agreed upon amount of days, usually 10-14 days.
Moisture-Termite Inspection | What Repairs Can Be Asked For?
The moisture termite company is the one requiring repairs this time, not the buyer. A clear moisture termite letter is required in order for a loan to be obtained on the property. So all repairs will need to be done in order to close. Typically there is a cap stated in the contract to the cost a seller is required to contribute to these repairs. If the amount of repairs is higher than that cap, the cost of the repairs can be negotiated between the seller and buyer at this stage.
Moisture-Termite Inspection | Who Can Do the Repairs?
A licensed moisture termite company must do the repairs. However, you can have multiple companies quote the work if the contract states that you select the company.
Moisture-Termite Inspection | Who Pays for the Inspection?
Being the one to choose the moisture termite inspector and being the one to pay for the inspection are both terms that are negotiated in the contract.
Appraisal
What Is Inspected?
An appraiser visually inspects the interior and exterior by conducting a walkthrough. They also discuss the home with the listing agent as needed. The goal of an appraisal is to ensure that the home’s condition and value matches or exceeds the value for the loan the buyer is taking out on the property.
What Are They Inspecting For?
The appraiser will be checking that Safety Standards are met and that systems function as needed. The appraiser also determines which repairs are needed right now, if any.
- Safety Standards Met
- Systems Function as Intended
- Repairs Needed Now
Appraisal | What is the Timeline?
An appraisal is typically ordered after the repairs from the home inspection have been negotiated. It can take a week or more to complete, and a few more days to receive the report. If the appraisal comes in at or over the contract price, you are in the clear, and closing can begin!
Appraisal | What Repairs Can Be Asked For?
Much like the moisture termite inspection, an appraisal is not required by the buyer, but the mortgage company. Any repairs that are required by the appraisal will need to be completed in order to close on the home. The cap mentioned for the moisture termite work applies to this as well.
Appraisal | Who Can Do the Repairs?
The appraisal also requires that any required work be done by a licensed contractor and have invoices for the work. This protects everyone involved.
Appraisal | Who Pays for the Inspection?
The buyer typically pays for their appraisal as part of their closing costs. If you have agreed to cover any part of their closing costs amount, it could be going towards their appraisal but it is counted as a buyer cost.
WHAT HAPPENS IF... the Appraisal Comes In Under the Contract Price?
Don't Worry! If the appraisal comes in below the sale price, you have a few options:
- Renegotiate the sale price with the buyer, coming down to meet the appraisal value.
- Renegotiate with the buyer and have them bring additional cash to close to cover the difference.
- Split the difference between you and the buyer.
- Cancel the contract and re-list and hope for a better appraisal another time.
- Contest the appraisal in certain situations, but it is very difficult. An experienced agent demonstrates certain strategies to reveal the value of the home prior to the appraisal.
