In a contract certain exit strategis are used, like the inspection clause. My question is if for some reason i cannot find a buyer within that 10 or 14 day inspection period. do i need a specifc document from a contractor to send to the seller informing him that i’m not satisfied with the inspection or do i need to type a general letter to seller or there attorney stating that the inspection was unsatisfactory and i’m not moving forward with the offer. Like how does that work?
I would always notify the seller in writing that you are not happy with the inspection…But you don’t need to have a letter from a contractor if you wrote your escape clause correctly.
Can you give me a brief description of how the inspection escape clause should be written in the contract?
For the last year or so, I have not been accepting offers with inspection clauses. I tell the buyers to make their offer after they do the inspection. I also don’t allow clauses like “I have to check with partner”.
To BLL: I’m a wholeseller, what escape clause or exit strategy would you suggest if i cannot find a buyer, for a property i’m assigning?
You would be one of the few I know who do this…
Banks, Homeowners, agents, in most cases will allow you to use an inspection clause.
It would be kind of a waste to pay for a buyer to pay for property inspection if they didn’t already have a price and terms down on paper.
“buyer has the right to inspect the property for up to 10 days after the completion of this agreement. If the inspections are not deemed acceptable to the buyer, the buyer may at his sole discretion cancel this agreement and recieve a full refund of…” You get the picture I think. I don’t have mine in front of me so, that was going off the top of my head.
These are my weasel clauses, but BLL is the expert on the legal stuff around here.
"This offer is subject to Buyer obtaining a real estate mortgage for no less than $_______ payable over 15 years with interest not to exceed __% at customary terms with a firm commitment thereto 30 days from date hereof. "
“Buyer must approve of the property’s title status and marketability before this transaction can be closed.”
“Buyer must approve of the status of the property’s existing loans before this transaction can be closed.”
“Buyer may assign Buyer’s rights, title, and interest in and to this purchase agreement to a third party.”
Those are good ones, Hooch. I would add an insurance contingency for any property you consider holding for the long term as opposed to a flip. I have seen people get whacked because they couldn’t get reasonably priced insurance.
Buyers are paying for the inspection regardless if they do it before or after I accept the offer. I just don’t want the inspection used to negotiate a lower price while tying up the property. When I reject the offer with the inspection contingency, I tell them I won’t accept another offer for 10 days while they get the inspection as I am sensitive to the fact nothing prevents my accepting another offer when they have paid for an inspection. They can conduct the inspection and then put in an offer if they choose or they can walk away.
You can make your offer contingent on finding a buyer. I wouldn’t accept an offer with such a clause. A financing or insurance clause would be better.
To ericmedem: Does this inspection have to be from a certified R.E. inspector or just a walk thru by the wholeseller and his prospective buyer?