As the Seller, once you have an acceptable offer and have agreed to terms with a ready, willing and able Buyer, you are halfway – but not all the way – there. There are still obstacles to overcome. One, of course, is the appraisal. Another is the Buyer’s loan approval. Still another – and the one that you perhaps have the most control over – is the inspection. In the standard Georgia contracts, Buyers may (and usually do) choose to ask for a due diligence period; and typically the Seller will agree to that. The due diligence period is the time in which the Buyer does all their inspections – structural, electrical, plumbing, systems, etc. Usually the Buyer will call in one inspector for a general inspection and if that inspector finds anything that needs further investigation, the Buyer will call in additional experts. Typically, however, there is one inspector, one inspection, which results in a 20 to 30 page inspection report. Don’t let the length of it scare you. There is a lot of “fluff” in most inspection reports that give the Buyer information about maintenance of the home and other things. The actual inspection items that need to be fixed can be distilled down to one “list”. Some Buyers will ask the Seller to fix everything – others may decide that nothing is severe enough to ask the Seller to fix. Usually, we see something in-between.
During this “due diligence period” the Buyer can terminate the contract with no penalty for any reason or no reason at all. Therefore, the Buyer has the upper hand (unless, of course, there were multiple bids and/or it is a “hot” property). That’s why the Georgia due diligence provision is also called the “free look” provision. So if you are happy with the contract in hand, as a Seller it behooves you to accommodate the Buyer if and where you can, and to make any repairs that are requested that you deem “reasonable.”
As the Seller, under the standard Georgia contract your obligation is to make the property available for inspection on the date and time scheduled. All utilities must be operational. The inspection will take between two and five hours, and it is customary for the Seller to leave during that period of time. Your agent can guide you on this. As long as the inspector is a licensed home inspector and we are familiar with him/her and/or the company, you can rest assured that it is safe to leave the inspector in your home. If there is any doubt, the buyer’s agent or your agent can stay for the full inspection.
However, it is also customary for the listing agent NOT to be present. The reason is that the buyer and inspector want freedom to discuss any and all problems they may find without interruption or argument.
If the Buyer does decide to ask for repairs, they must provide you, the Seller, with a copy of the inspection report and an “Amendment to Address Concerns” setting forth the precise repairs that they are requesting be made. You can counteroffer the Buyer’s initial demands and negotiate something less than the original items asked for. In addition, the parties may and often do agree on a monetary concession by the Seller in lieu of repairs. That may be preferable to you as a Seller because it eliminates any dispute over the quality of the repairs performed, and saves you from the possibility that the repairs may end up costing more than is originally calculated.
A good agent can guide you through all of this. I typically will let my Sellers know what general amount they should “budget” for inspection repairs at the time we get the initial offer, so that they can better calculate their net proceeds from a given contract. By necessity, this budget will be based on the items the Seller knows might need repair, and may include a cushion for the unforeseen. With a little advance planning and good counsel, you can sail through the inspection and head on to closing.
(*Photo, courtesy of Cornerstone Inspection Group)