Home Buying in Park Slope>Question Details

juicefetish, Other/Just Looking in New York

How does the townhouse inspection process typically work? Does it happen before/after the contract is signed?

Asked by juicefetish, New York Sun Jun 10, 2012

Help the community by answering this question:

Answers

12
Trevor Curran’s answer
Good morning juicefetish,

For HomeBuyers in the New York Metropolitan Region: The Five Boroughs, Nassau, Suffolk, Westchester, Dutchess, Putnam, Rockland and Orange Counties, there's a tried and true method for purchasing a home. Because we use Attorneys here in the Downstate New York area, HomeBuyers benefit from very specific protections built in to this method.

While a HomeBuyer might make the Offer to buy a home in writing, until a Contract of Sale is signed in the presence of your attorney, the transaction isn't binding. Follow the tried and true method and don't let anyone influence you to vary from it; it's for your protection.

In a New York home purchase, the timeline goes like this:

1. HomeBuyer and Seller negotiate the Offer. Offer is best presented in writing. After much hand-wringing and back and forth negotiation, both parties agree on a price and terms of the sale.

2. Offer accepted

3. Contract of sale is prepared by Seller's Attorney and forwarded to Purchaser's attorney for review

4. Purchaser hires a Licensed Home Inspector (As per NYS regulations, ALL Home Inspectors must be Licensed). The Home Inspection is conducted PRIOR to signing contracts. If inspection reveals a problem with Foundation, Roof, Plumbing, Heating or Electrical, Purchaser's Attorney discusses with Seller's attorney to obtain satisfactory remedy PRIOR to contract signing. The remedy can be either a Seller repair or Seller credit to Purchaser at closing.

Since Home Inspection is done before contract is signed, the Purchaser has the opportunity to negotiate or walk away with no obligation to the Seller.

5. Contract Signing. Once all issues and concerns and terms of the Contract of Sale have been satisfactorily worked out by Purchaser's and Seller's attorneys---including any Home Inspection issues---the Purchaser meets with Attorney to sign the Contract and present an "Earnest Money Deposit." This is often misconstrued as the Down Payment.

In fact, this is money presented by the Purchaser for the Seller's attorney to hold in an escrow account until closing. This is often referred to as the "Good Faith Deposit" because it's the Purchaser's way of telling a Seller "I'm serious about buying your home and obtaining the mortgage financing to complete this purchase! Here's my money as a show of Good Faith."

6. Mortgage Application. Purchaser applies for and receives approval for the mortgage loan

7. Title Report. Purchaser's attorney orders a title inspection of public records to verify the Deed can be transferred from Seller to Purchaser with no liens, violations, or other encumbrances. Purchaser's Lender's attorney reviews the title inspection, or title report, to verify there are no objections on the Lender's behalf that would affect the closing of the mortgage loan.

8. Closing! Purchaser completes Down Payment, Mortgage Lender ponies up the rest of the cash, and Seller hands over the Deed and the Keys to the House!

9. Purchaser buys steaks for first Barbecue in their own backyard of their own home.

10. 30 years of Fixed Rate bliss because you own a Piece of the Rock!

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
NMLS#3528
.
1 vote Thank Flag Link Wed Sep 19, 2012
Nervous we waived the inspection of a townhome we r buying
! Was I wrong?
0 votes Thank Flag Link Sat Jun 14, 2014
The Home Inspection is performed immediately after your offer has been accepted afterwhich your attorney can better execute the contract.

John Esposito
The House Detective
Home Inspection Agency
718-318-1263
http://www.thehousedetectiveny.com
0 votes Thank Flag Link Wed Sep 12, 2012
Good afternoon juicefetish,

Typically you do the Home Inspection before signing your contract of sale. Any issues raised in the Home Inspection process should be immediately discussed with your Attorney.

Typically your Home Inspection will alert you to problems in five key areas, and these key areas directly relate to the contract of sale:

1. Foundation: sound and solid
2. Roof free of leaks
3. Plumbing working and leak-free
4. Heating system sufficient and operating
5. Electrical system sufficient and up to code

If there is a serious problem with any of these five items, typically the Seller has a responsibility under the terms of the contract of sale to repair the problem at their expense, not the Purchaser's expense. Sometimes a Purchaser will receive a credit at closing to repair one of these items (assuming the home and the defective issue has not compromised the Lender's appraisal). When the Purchaser receives a credit at closing, the amount of the credit is based upon legitimate estimates for repair and negotiations between the Attorneys representing each party.

Other items you discover are in need of repair/upgrade (i.e. diswasher not operating properly; air conditioner on second floor inoperable, etc.) can be negotiated for a repair credit or replacement at the Seller's expense. Again, these negotiations are handled by the Attorneys.

It is extremely RARE that a purchase price is reduced due to repairs from a Home Inspection. Best to consult with your Attorney for more detailed information in this area.

If you don't already have a good real estate Attorney and you're shopping for homes, you need to reverse your process. First, get properly prequalified for mortgage financing by a Local Mortgage Banker. Second, line up your Attorney. Third, line up your Home Inspector. Fourth, line up a great local Realtor with personal experience in the area in which you'd like to buy.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Mon Jun 11, 2012
Dear juicefetish:

99% of the time here in Brooklyn, the inspection is done before you sign a legal contract of sale. If you plan on having an inspection, when you make an offer you should express in the offer that said offer amount is subject to an inspection. When the homeowner/seller accepts your offer, you would then do the inspection prior to the signing of a contract. Here in Brooklyn, you will be extremely hard pressed to find a seller willing to enter into a contract with you that is subject to inspection after the fact. That is simply not traditional here in Brooklyn.

If I can be of further assistance, please let me know. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Mon Jun 11, 2012
I concur with the agents below who state that an inspection is initiated after a price is agreed upon, making the contract contingent of a satisfactory report. In my world(BrownstoneDowntown Brooklyn) a contract is never usually signed until the purchaser receives a satisfactory report. If the report has some issues, the buyer has the option of then negotiating price prior to the signing of the contract. Depending on the market, a seller might be reluctant to negotiated after the price has been agreed upon.
I have had some buyers(usually seasoned buyers for distressed properties) who have inspections done prior to making an offer-the buyer can immediately proceed with an offer or move on to another property-and the seller does not have an agreed upon price to be negotiated down from.
0 votes Thank Flag Link Mon Jun 11, 2012
I concur with the agents below who state that an inspection is initiated after a price is agreed upon, making the contract contingent of a satisfactory report. In my world(BrownstoneDowntown Brooklyn) a contract is never usually signed until the purchaser receives a satisfactory report. If the report has some issues, the buyer has the option of then negotiating price prior to the signing of the contract. Depending on the market, a seller might be reluctant to negotiated after the price has been agreed upon.
I have had some buyers(usually seasoned buyers for distressed properties) who have inspections done prior to making an offer-the buyer can immediately proceed with an offer or move on to another property-and the seller does not have an agreed upon price to be negotiated down from.
0 votes Thank Flag Link Mon Jun 11, 2012
As an inspector I can tell you a majority of clients order an Inspection after the contract is signed. One of the contingencies on the contract will be that the purchaser will have the opportunity to inspect the property. Without a signed contract the seller has no legal obligation to allow you on the property and also to enter all areas for a proper inspection
Once you have the report in your hand you can approch the seller and renegoiate the selling price or for an adjustment on the closing date.The seller may wish to make the repairs themselves or hire an contractor.
The Inspection is also an out for many Homebuyers because they may decide that some repairs are better made by them to their taste instead of the seller.. Good Luck.. George
0 votes Thank Flag Link Mon Jun 11, 2012
Typically the inspection takes place after the binder is signed and a price is agreed upon. Inspections occur before contracts. If something comes up in the inspection that is a major concern you can use it as a further bargaining tool.
0 votes Thank Flag Link Mon Jun 11, 2012
Consult with your agent and or attorney for a more detailed explanation; once an offer is accepted, the home inspection should occur within a few days, or as early as possible--thereafter if no extensive issues arise, all is satisfactory, etc., contract should be signed right away. Keep in mind that without an executed contract, signed by all parties, and deposit money exchanged, the seller if free to entertain any other offer(s) that may arise.....
0 votes Thank Flag Link Sun Jun 10, 2012
Hi juicefetish
all inspections are done before signing the contract and a copy goes to your attorney so he
can discuss it with you, and you fully understand what you are purchasing. unless you are a
contractor or builder you generally already know what is wrong with the property and don't care.
madelinepadovano@fillmore.com
0 votes Thank Flag Link Sun Jun 10, 2012
A buyer will usually make their offer contingent upon a satisfactory home inspection within 7 to 10 days of the contract date. Therefore the inspection is done after the offer is accepted. With bank owned homes and short sales where you may not be able to renegotiate repairs after your initial offers, some buyers choose to have a brief inspection before making an offer to deduct for any problems in their initial offer. Having a good buyer broker can assist you through each step of the buying process.
0 votes Thank Flag Link Sun Jun 10, 2012
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer