If you are like most Louisiana residents, a home will be your largest purchase. You will most likely be paying off your mortgage loan for many years, so you want to make sure that the property you want to buy is worth it, which is why there are numerous due diligence tasks that you must complete prior to closing.
One of those tasks is the home inspection, which is designed to root out any problems that could make you think twice about your purchase. For this reason, you will want to make sure that your contract with the seller includes a contingency regarding the outcome of the home inspection.
The details of your home inspection contingency
When negotiating your purchase agreement you can outline how you and the seller will deal with any issues identified by the home inspector. Generally, you and the seller will have the chance to negotiate major repairs by either having the seller make the repairs and then conducting another inspection or reducing the price of the home to offset the cost of the repairs, which you, as the new owner, would make on your own after the closing.
Depending on the circumstances, this clause should also give the potential buyer the option of backing out of the deal without losing his or her escrow payment. For instance, if the home inspector finds black mold or a crumbling foundation, it may be more beneficial for you to walk away.
What kinds of repairs would fall under the home inspection contingency?
Obviously, small repairs or cosmetic issues will most likely not trigger the use of this contingency. Larger issues such as a leaking roof, electrical issues and the like would more than likely qualify. What kind of resolution you and the seller come to depends on your and the seller’s motivation.
If you really want the home, then you will most likely be more amenable to continue with the purchase and negotiate the cost of repairs. If the seller really wants the sale to go through, he or she may be more willing to accommodate you with either a price reduction or come to an arrangement for payment of the repairs. If it turns out the seller should have known about and disclosed a particular issue, he or she will most likely be required to pay for the repairs in full.
Protecting your interests with a home inspection contingency
The primary purpose of any contingency, including this one, is to protect your rights and interests. Therefore, it is crucial that you make sure of the details before signing a purchase contract. Moreover, if a dispute with the seller does arise, it would most likely be beneficial for you to have a legal advocate on your side to fight to protect your interests and rights.