What to do AFTER your offer has been accepted?

Question

This is a very basic question. I have never purchased a home before so I am not sure of the standard procedures or proper protocols. On a flip property for example, once you have an offer accepted do you then coordinate with a contractor or inspector to come walk the property? I'm not sure what the process is. Do you have an inspector come out and make a list of any and all issues? What do they charge for this? Do you then have a contractor come afterwards to give you a bid on the rehab costs? Do you have them both come at the same time? Do you just have a contractor come and not an inspector? I'm a bit confused on this aspect of the deal. Can someone please give me a simple run down of the standard process? Thank you in advance for helping clarify!

Rolanda Eldridge · Answer

Brian G...When I started, I paid for 2 home inspections (fear) and as a beginner that might be the way to go.  Your comfort level increases with each deal.  I do my own visual inspection.  The contractor gives est on cosmetic repairs.(paint,roof,wood repair, floors, etc)  HVAC, Electrical, Plumbing, I pull in after the fact.(I estimate because of my experience)....Depending on the property, the contractor may only do certain portions of job...last project..tile guy, painter, granite counter, carpet..all different...My way, but so many ways to do it.  I also started out with under $50,000 so enough room to make mistakes...GL

Account Closed · Answer

Find a house that you are really interested and hire an inspector BEFORE you enter into contract. Offer to pay him a few hundred more than his standard fee for some extra time and hand holding and go on the inspection with him. Ask a lot of questions. Ask about things that aren't defective just to learn how they work and why it's done that way. Then read books on construction. To be successful in this business you have to immerse yourself into it. Make it your goal to know as much or more than the inspector. Eventually you will find out that some inspectors spew bs when they are inspecting for the retail buyer.

Rolanda Eldridge · Answer

Brian G...Hopefully, you put a contingency for inspection/financing in contract.(7-10 days).After offer accepted, I get a contractor out for repair estimates.( I don't pay for home inspections)--Only because of my experience with rehabs.  I always do a high estimate value(start 10,000-40,000) You can get 3 repair estimates, but I would set them up a different times..Once you identify issues, negotiate with seller, based on the report.  EX..Offer 150,000...repairs came back with major HVAC issue...Ask seller to replace or adjust price... if seller agrees, finalize contract or not; walk away...GL

Brian Garrett · Answer

Yeah it sounds like at the beginning while I'm new to this and just starting it may be best to bite the bullet pay for an inspection first. This way I have that information already in mind to help determine if the deal works when GC's come out to give their bids on the actual rehab costs.

Brian Garrett · Answer

So as investors we have to pay for inspections first on every house we are considering?

For flips I was hoping I could get away with just having a few GC's come out and give bids.

Teddy Smith · Answer

You get an inspector to come out (around $150). He/she will list everything they find. If the issue really freaks you out, hire a specialist to come in. Example: Inspector says the HVAC is near end of life, hire an HVAC specialist to come in and diagnose. Same with rood, mechanical, etc.

Rule of thumb: The inspector is a generalist. If it worries you, hire a specialist.

If the house meets your expectations, that's when you negotiate repairs (before due diligence is over). If everything is still ok after that, due diligence ends and you prepare to close.

Brian Garrett · Answer

@Rolanda Eldridge Thank you for this information. I thought when a contractor comes out they are coming to give you a price on the rehab (kitchen, bathrooms, flooring, painting, etc) and not actually "inspecting" the home for plumbing, electrical, foundation, etc. So I was under the impression that you needed to have an inspection done first and then you give that information to the contractor along with the rehab stuff you wanted to do in order to get your official quote.

What to do AFTER your offer has been accepted?

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