Is it common to insist on contract before inspection?

Question

Hi there! I am just an average Joe trying to sell our house to investors (ski resort town three hours east of SF if anyone is interested) - I just wanted to check in and see: Is it common for an investor to insist on entering into a contract before they inspect (where they have 2 weeks to inspect and cancel if they don’t like what they see & if they do they will close within one month)?

Should I insist they inspect first so that we aren’t placed under contract in case they don’t want to buy? Or is this a commonplace scenario?

Thank you,

Ryan

Marc Winter · Answer

The question might be:  why would anyone risk putting hundreds of dollars into an inspection WITHOUT a contract?

What the seller might do is negotiate a shorter amount of time allowed for the inspection to be completed. That will limit the amount of time the property could be off the market IF the buyer doesn't like the inspection.

Lastly, get a satisfactory amount of earnest money deposit on that contract.

Jonathan Greene · Answer

The contract has an inspection clause. This is state-dependent. In NY for example, you agree in principal, but do inspections before the attorneys write the contract when it is a full go. In NJ, you sign a full contract subject to inspection and appraisal, etc., and then do inspections and negotiate on inspection repair requests as part of the process.

AJ Wong · Answer

Very common. Most buyers don't want to commit to an inspection expense prior to reaching terms. You could consider a sellers home inspection (paid for by you) prior to listing the property so that buyers make their offers based on known areas of attention. Use caution as an anything not functioning or highlighted for repair will need to be disclosed.

If it's a clean property that is expected to be competitive, it's a worthwhile seller investment.

Let me know if we can help support your sale in anyway we have a 1500+ investor list throughout CA & OR. Good luck!

Is it common to insist on contract before inspection?

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