Real Estate Closings are not always smooth due to home inspection
If you are a first time home buyer, you need to prepare yourself the process leading up to real estate closings. When you first enter into a real estate purchase contract, everyone is happy. The buyers are excited, the buyers realtor is happy, the sellers are happy and so are the sellers realtor. However, things can get hairy during the steps leading to real estate closings where in some cases, the real estate transactions gets cancelled due to the conditions of the house. A home inspection is strongly recommended.
Many folks have a home inspection done when they purchase a home. I strongly recommend a home inspection and for the $300 or so home inspectors charge, it is worth the money and a great insurance policy. I have witnessed home inspectors uncover major electrical, plumbing, and HVAC issues that the buyer or appraiser would have never uncovered by themselves. Other items that a home inspector can uncover is foundation flaws, mold issues, structural issues, and other high cost deferred maintenance issues.
Home Inspection With Bad Report
Just because a home inspector reveals flaws with the subject residential property does not mean that the real estate deal is dead. Many home sellers are open minded and will either fix the problem the home inspector reveals or will issue a credit to the home buyer. There are cases where the home seller will not cooperate and not fix the subject problem nor issue a credit. If this is the case, the home buyer must decide whether or not to pursue with the purchase of the home or cancel the real estate transaction. Some home sellers have their home listed on an as is condition. Examples of sellers who will not negotiate on home repairs include foreclosures or short sales or mortgage lenders who have REO properties.
Home Inspection Versus Appraisal
Home inspections are normally done prior to appraisals. You might also want to consider pest inspection for termites and well and septic inspections. Termite damaged properties are big bucks to repair and big headaches and sometimes it might not be worth purchasing a termite damaged property. Well and septic flaws are major high ticket repairs and time consuming. A new well can run north of $10,000 plus and the excavation to dig the well can damage the surrounding landscape.
When to cancel a real estate purchase contract
If your home inspector finds structural problems, mechanical problems, foundation problems, or termite problems on the subject property, maybe it is the time to cancel the real estate purchase contract. If the issue at stake is not minor like cosmetic issues such as worn tiles, cabinets, paint, or other quick fix issues, I would seriously consider getting a substantial credit or cancelling the real estate purchase contract and getting another home to purchase.