You submit your offer for a home, and you offer the asking price. You're not looking to negotiate. The price seems fair and you just want the deal to get done.
One potential hold-up, though, is the inspection. In drafting your purchase offer, you note that the purchase is contingent on an inspection. If the home doesn't pass, you're out. This is one of the clauses you can use to protect yourself, and it's crucial not only to know how to add this to the legal documents, but what things to watch out for during that inspection. Some examples include:
1. Worn out roofing materials
Most roofs are made with asphalt shingles. They're usually rated for at least 15 years of life, and perhaps as long as 40 years. However, that's just the life expectancy. That changes with things like storm damage and a variety of other factors. No matter how new the roof is, check it out to see how long it will last and what it's really worth.
2. Properties that slope toward the building
Ideally, you want the grade of the property to slope toward the street. This happens in most cases, but, every now and then, you find a property sloping toward the house. This can cause significant water problems, perhaps flooding the home. Water damage happens quickly and is very expensive to address.
3. Unauthorized modifications and updates
This is especially important to look for in older homes. If the house was built in 1927 and it has drywall and modern outlets, you know someone did a fair amount of work. Did they have permits? When was it done? Is it actually up to code? Don't assume that it is just because it looks good. Even homeowners with good intentions can make mistakes, which can be quite dangerous when dealing with electrical lines, heating and cooling systems and more.
4. Outdated materials
Naturally, asbestos is one of the main things to look for and can be very dangerous. You may also want to have the home tested for lead paint. Older homes may still contain materials that have been illegal to use for years. A 1920s home may have a certain charm, but it can also come with dangers.
Even materials that aren't dangerous could be outdated and need replacing. For instance, during World War II, iron was being used for tanks, airplanes and other weapons of war. Piping companies needed more options. Out of necessity, a company called Orangeberg made papier mache sewer piping, starting in 1942. If the home has these pipes, it will need repairs that cost $2,000 to $5,000.
All of these issues represent extra costs. This can give you leverage, as a buyer. However, they also mean it's important to understand all of the legal aspects of creating your offer and/or a purchase agreement. You don't want to accidentally get stuck with a home that you soon know wasn't a good buy, and you need the proper clauses to get you out of the deal.