BiggerPockets

I do not like the fact that I can only do a close inspection of a property I am buying after signing the purchase agreement. This seems to open a can of worms, if I find serious problems, and the seller wants to be difficult.

I'm looking at 3-4 unit buildings. I've been told that up to 17 days after the start of escrow it is easy to withdraw from the contract if I find serious problems in the building. Is this true?

You have to look at it from the buyer's perspective. Why would they want to submit their property to inspection without a contract for purchase in place? It would be a huge waste of time because of all the window shoppers you'd get. Jon is right though. Inspectors only point out certain things. There are many things they don't look hard enough at, like foundations, which are really the most important.

If memory serves correct, in CA the contingencies are active, meaning the buyer has to remove them in writing. This gives you leeway if you and the seller can't come to terms over repairs or credits related to those repairs within that time frame.

There is one way that the seller CAN use to get around the inspections: you have to get everything done in a timely manner. If you don't meet all deadlines for the inspection clause, then you are buying it either way.

Always write your offer to state "liquidated damages" (i.e., your EM) rather than "specific performance". That way, the very most you have at risk is the EM. If something that would cause you to suffer a huge loss comes up at a point where you cannot bail out, you will lose only your earnest money.

If you're buying a rental property (which it sounds like you are), landlords get real sick of constantly having to handle coordinating appointment with the tenants and the tenants getting jumpy about all the buyers coming through. You can tell a tenant a million times that a new buyer does not cancel their lease agreement and they still get jumpy about it. I don't let anyone but serious buyers inspect my properties. They are asking permission to come on my land and into my buildings. For that liability and tenant management exposure, you owe it to me to show me your serious.

Originally posted by Mark Hu

... You never know for sure what's really going down at the property until after the contract is signed and good money spent. ...

Let's see. We'll try the alternative approach. You first pay for an inspection, then find out you don't want to buy, without entering into a contract. Didn't that result in you spending good money, without buying? Sounds just like what you wrote in the piece I have quoted IMO.

If you need to hire an inspector, you will somehow be paying for that inspection. If you don't buy as a result, it's good money that was spent. In terms of money spent, make's little difference if it is before or after being under contract.