What Happens During the Inspection Period of a Real Estate Transaction?

If you offer to buy a home or commercial property and the selling party accepts your offer, the next step is for you and the seller to negotiate and sign a sales agreement. Generally speaking, once it is signed, the sales agreement will immediately create a binding obligation for the seller, but not the buyer.

Instead, the sales agreement will provide for what is known as an inspection period, during which you will be permitted to withdraw your offer without penalty. The inspection period is usually 15 days from the date you sign the agreement, but the parties can negotiate a shorter or longer period. Longer inspection periods benefit the buyer while sellers might try to shorten the timeframe to limit the likelihood that a purported problem will scuttle the deal.

As the term “inspection period” suggests, the point of this grace period is to give the buyer an opportunity to inspect the structure and other parts of the property for any hidden and undisclosed defects that can affect the safety and/or value of the parcel. Of course, you can also use the period to reconsider the merits of the purchase.

The inspection should look not only for structural defects themselves, but for infestations of dangerous pests, such as termites, mold and fungi. You may find an inspector who can do all of those jobs or separate inspectors for different aspects of it. In any case, you, rather than the seller, are responsible for hiring any inspector and seeing that they have the right qualifications and strong reputations.

If you haven’t already lined up the inspector or inspectors you want to use before you sign the sales agreement, you should do so as soon as possible and have them schedule the inspections promptly, so that you can receive the reports in enough time to act on any potential issues. Review the report or reports as soon as you receive them, so that you can determine if you need to withdraw from the deal or can persuade the seller to fix the defects as a condition of going forward with the sale. Another option is negotiating a setoff in the sale price to account for the work needed to cure the problem.

Norma Echarte & Associates in Miami offers the legal counsel you need to protect you during the inspection process and other elements of a real estate transaction. Please call us at 305-501-2844 or contact us online to schedule a meeting.