If you’ve bought a home, or are buying a home, you may have seen the “Standard Agreement For The Sale Of Real Estate” being used by the Pennsylvania Association of Realtors.
Including the “Notices” sections of the form, it exceeds 20 pages of small print. Some of the most important provisions of that form are found in the “Inspections” and “Inspection Contingencies” paragraphs.
This article will provide some general information regarding inspections and contingencies.
The Buyer generally has the option to elect certain inspections he or she wishes to have on the property. For example, by electing the “Home/Property Inspection” paragraph, the Buyer indicates that he or she will conduct a home inspection, which has the effect of making the Agreement of Sale contingent upon the Buyer’s satisfaction with that inspection.
The Buyer will hire, at his or her expense, a licensed home inspector to conduct an inspection of the Property. The home inspector will inspect the property and produce a report, which will direct the Buyer’s attention to any defects or repairs needed.
With the report in hand, the Buyer’s options under the Agreement of Sale are the following:
1. He or she can accept the property with the reported defects; or
2. Terminate the Agreement; or
3. Propose that the Seller make certain repairs based on the report.
The Buyer’s chosen course of action determines his or her obligations under the Agreement. There are strict deadlines for the Buyer to give notice to the Seller, and the Buyer’s failure to comply with those deadlines could lead to the Buyer accepting the property with defects and releasing the Seller from taking corrective actions.
It goes without saying, that as a Buyer or Seller of property, one must fully understand his or her obligations under the Agreement of Sale with regard to inspections and inspection contingencies.
Before you sign an Agreement of Sale, whether as a Seller or Buyer, you should consult an attorney to be sure that you fully understand what you’re signing and what your legal requirements or remedies are under the contract.