Most Purchase Agreements in the Twin Cities are contingent upon an inspection, usually with everything completed within 7-10 days. With this contingency, another round of negotiations can sometimes begin after the inspection.
After the inspection the buyer has the following options…
- Accept everything as is and move forward towards closing
- Ask the seller to make repairs prior to closing or contribute to the future cost of repairs by a price reduction or contribution to buyer's closing costs
- Cancel the purchase agreement and have earnest money refunded
If the buyer chooses option 2, the seller has the option to accept, counter or reject the buyer's demands and sometimes it can take awhile to come to a final agreement on terms after the inspection.
But if the buyer is financing the purchase it's not over yet…
- The property must appraise for the agreed-upon price, and especially with FHA financing the appraisal may also bring up some things that must be fixed before they will finance the property.
- You must also insure the property prior to closing, and the insurance company may ask for details about the electrical service, etc which could result in some updates being required before they will issue insurance for the property. It is also common for an insurance company representative to do a drive-by, which could also result in some requirements.
The roof in this photo is an example where the buyer accepted the roof after the inspection, planning to replace it herself after closing… but the mortgage company would not finance it and the insurance company would not insure it until the roof was replaced. Guess what… the seller provided a new roof prior to closing!