Mel and Dani are your typical first-time homebuyers. They have scrapped and saved for years to accumulate their earnest money escrow deposit and mortgage down payment. To keep down costs, Dani convinced Mel a home inspection was not necessary because the lender was performing a 4 point inspection. As a result, their contractual due diligence period came and went. Two weeks after closing on their dream home, Mel discovered readily observable property defects that were missed in the four-point inspection. The property’s insurance denied coverage because the defects were a pre-existing condition. Consequently, Mel and Dani had to pay out-of-pocket to make substantive and costly repairs to their “dream home.” What makes matters worse for these buyers is that this situation was avoidable.
At Berlin Patten Ebling, the preceding narrative is our Never-ending Story. Buyers should not rely solely on a Seller’s Disclosure or a four-point inspection. Buyers should always retain the services of a Florida licensed home inspector. Why? A four-point inspection is used by insurance companies to determine structural underwriting risks, not cosmetic or appliance repairs. A Florida licensed home inspector report is generally more thorough and consists of items that an insurance company would not care about, but a new homeowner does. For instance, a home inspector can scrutinize any property events listed on the Seller’s Disclosure (termites, mold, water intrusions, etc.) and determine if the subsequent repairs were appropriately completed by the seller and/or their third party vendors. However, note the main objective of a home inspection report is to assist buyers with uncovering any material defects with the property. The written report itself should not be considered an all-inclusive evaluation of the premises for the purchase. A home inspector cannot be expected to identify each and every minor existing defect. And in certain circumstances, a home inspector cannot render an opinion and may only recommend another third party evaluate the identified property concern. This is because a licensed home inspector may only perform a limited visual examination of readily accessible home systems and components. For example, the home inspector will not dissemble the HVAC system and/or test its internal components to determine if the system is on the last legs. Rather, the home inspector will determine for the buyer if the HVAC system is properly cooling the home or if the air conditioning unit handler is operating well past its manufacturer’s life and that a licensed HVAC contractor should inspect the unit prior to closing.
Before proceeding to closing, it is important to hire an experienced and licensed Florida home inspector to conduct an inspection prior to the expiration of any contractual due diligence period. After the expiration of the due diligence period, the buyers options are limited, and uncomfortable economic considerations may need to be made. The buyers may be forced to close with readily observable material property defects or refuse to close, which would then place the earnest money escrow deposit in jeopardy. If at any point during the home buying process potential material defects are discovered, it is recommended you seek your local real estate attorney to protect your interests to ensure you do not end up like Dani and Mel!
Michael E. Schuchat, Esq., firstname.lastname@example.org
Berlin Patten Ebling, PLLC
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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