As I mentioned in the first part of this series, there are a number of documents for both sellers and buyers to review in the home sales process. In this we’ll take a look at an actual inspection addendum we use in our Dubuque market. You can view the document by clicking this sample Addendum
The home addendum covers items that the home inspection revealed which were not disclosed by the owners. If you haven’t already, read the first entry in this series in which I go into more detail about what the addendum is.
If you look at this document you will see some of the verbiage we referred to in the first part of this series. Halfway down the first page, the document begins to recite the various inspections a buyer may ask for. The option for the buyer is to either have a particular inspection or decline that opportunity – the choice is theirs.
You will note that each type of inspection has some kind of time line connected with it. For instance, the home inspection – on or before a certain date or within a certain number of days after a certain event occurs – like acceptance of the buyers offer or arranging financing etc.
The time line for the pest inspection however is on or before a certain date or no later than a certain number of days prior to closing. You want to be careful when choosing these particular dates.
If you move down to the lead-based paint inspection you will see that it would need to be completed by 9 P.M. on the 10th calendar day after acceptance of the purchase contract by the seller.
The septic inspection, since it is required by state law (in Iowa) for certain properties, has its own timelines depending on circumstances.
Take a look at page 3, number 7 RIGHT TO CURE/REPAIR. If the “no exceptions” (a) box is checked and the inspection points out a defect that the seller is willing to correct, then the buyer cannot terminate the contract because of that defect. However, if the (b) box is checked and there are any conditions noted there – like “structural damage or termite” then the buyer would have the right to terminate the contract, even if the seller is willing to remedy the problem.
Especially take a look at number 8 of page 3. This is extremely important. It deals with a sellers or buyers failure to respond within the required time periods. Be sure to read it over.
This inspection addendum is one of many you might find in use across the country. Inspection agreements, whichever one is used in your market, should be designed to accomplish the same thing – to protect all parties to a transaction.
Remember this though – INSPECTION AGREEMENTS/ADDENDUM ARE NOT WORTH THE PAPER THEY ARE WRITTEN ON UNLESS THEY ARE UNDERSTOOD BY BOTH PARTIES AND UNLESS THE TERMS OF THE AGREEMENT ARE FOLLOWED TO THE LETTER.
In the third entry of this series we will talk a bit about how a buyer might respond to a seller if an inspection(s) point out defects in a property.