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inspection cost, typically $250 to $300 But at least you ll be able to gracefully get out of the deal if the inspector finds something Many purchase agreements today come with this as an automatic part of the boilerplate, but some do not Be sure that yours is written in such a way that not only do you have the right to bring in a professional inspector but you also have the right to approve or disapprove of the report Just having the right to have an inspection isn t good enough The deal must hinge on your having the right to say yea or nay to what the inspector finds Sometimes sellers will insist that you can disapprove of the report only if the inspector finds a significant defect in the property This weakens your position Also, be sure the clause gives you the right to be shown all previous inspection reports on the property And be sure you have a good agent write in (or check over) the contingency, and have your attorney look it over as well Does the home inspection contingency give me enough time It takes time to find a home inspector, to line up the inspection, and to get the report You want to be sure your contingency clause allows you enough time Typically this is 14 days, at minimum There should also be an automatic extension allowed if the inspection reveals a significant defect and you need to call in specialists For example, the professional home inspector might find a big crack in the foundation Now you want to call in a structural engineer to check it out This can take additional time Keep in mind that the contingency will not usually specify who is to conduct the inspection That s up to you Your agent can usually suggest someone, but you ll want to be sure that the person is both a member of local trade groups as well as either the American Society of Home Inspectors (ASHI) or the National Association of Home Inspectors (NAHI) or a similar organization (See Internet Resources at the end of this book) Be aware that most states do not as of this time license home inspectors Do I have active or passive approval The method by which you are to give your approval of the home inspection report and other contingencies is often specified in the purchase agreement If you have
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82 passive approval, it means that if you don t disapprove the report, usually in writing, by the specified time limit, it is assumed that you approve it In that case the contingency is automatically removed, and the deal moves forward If you have active approval, you must approve the report within the specified time, again usually in writing; otherwise, it is assumed you disapprove, and the deal can be dissolved Be sure you know what your time limits are and how you are to respond You can lose a deal by failing to act appropriately If you re not certain, be sure to check with your agent and/or attorney for advice Note that either disapproving or failing to approve is not necessarily fatal to the deal Rather, it can open the whole process of negotiation again, in which case you can demand that the seller correct a problem or give you a price reduction to compensate for it Is there a termite and/or pest inspection contingency Most purchase agreements call for a termite report and clearance, which usually includes a pest inspection Again this is often part of the boilerplate The reason for the inspection is that usually no lender will give you financing until you can get a certificate showing that your home is free of termites However, even if the lender doesn t insist on this, you should Typically the seller will pay for the report and will pay to have the termites removed and also pay to have any existing termite damage repaired However, usually you will be asked to pay for any preventive work to correct future infestation Normally, you have a choice as to whether you want to have this preventive work done If you don t have it done, you don t have to pay, and it isn t done Since preventive work is many times problematic (there may be no proof that it will do any good), most buyers refuse to have it done If the seller refuses to or can t produce a termite clearance, the deal collapses, and usually you re out of it Do I have approval of repair work Many times the purchase agreement will specify that if there is repair work to be done either because of the home inspection report, the termite inspection report, or other inspections, the sellers have the option of determining
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