when does inspection happen

It really has to do with your lawyer and how he/she likes to handle the process. Generally, the attys I work with prefer that a full inspection take place pre-contract, so that we're not in a situation where we're in contract but there's a sizable chunk on negotiating still left.

If you do choose to do an inspection post-contract, then the contract will need to have clauses in it laying out what kinds of inspections are allowed (for example, does the buyer have the responsibility to get you access to the building's boiler room?), and what the remedies are when something is found, and under what circumstances you can break the contract.

Be aware that in the current environment, asking for a full inspection is a somewhat aggressive move, so you'll have to make sure you have good buyer-seller communication through the brokers.

I did have one deal where I was buyer rep, we did a full inspection, found a leak, and instead of negotiating through that problem, the sellers -- not my clients -- freaked out and dropped out of the process, pulling the apartment from the market. My clients ended up buying something else.

ali r.
DG Neary Realty

Ali's advice generally favors the seller.
Why as a buyer would you pay for a full inspection before being in contract? To inform the seller on what he needs to fix or needs to hide, then have them sell it to someone else?
As a buyer I would not have those conditions unless seller holds inspection fee in escrow should a large repair needed is found and seller not want to negotiate off it.
Or from the onset pay for half the inspection fee.

Otherwise,as per Ali's post-contract inspection, those things she mentions are to be negotiated and put into the contract.

Why would anyone pay for an inspection pre-contract? Just so that the seller can sell it someone else in the interim? Makes nos sense unless you are the seller.

apt boy - I don't understand. I do my due diligence on the building's financials and have my lawyer read the minutes before signing, how is this any different?

In the case I cited, doing the inspection pre-contract was actually the advice of BUYER'S attorney.

I actually don't believe in apartment inspections at all.

But let me make up another case where pre-contract inspection might favor buyer: remember that thread where the dude had a concrete balcony, and wanted to put down wood decking, even though he suspected that to do so would violate code?

Let's say you're a first-timer buyer, and you see that apartment, and you go into contract with the right of full physical inspection. Your inspector comes through, looks at the apartment, and says, "hey, the unit's fine, except that wood decking on the balcony is a code violation."

Well, now you as buyer are in the position where the seller shrugs his shoulders, says, "I didn't know that it was a code violation, but of course I'll cure it" and strips the balcony back down to the concrete.

You as buyer may think that the concrete looks horrible, and might not want to buy the place anymore, but contractually ... seller has fixed defects found upon inspection, and you are obligated to proceed with purchase.

Otherwise, you'll lose your deposit.

Isn't it worth a couple hundred bucks to avoid being in that position?

But again, printer, this is a hypothetical. Do whatever your attorney advises.

ali r.
DG Neary Realty

Ali r - Why don't you beleive in apartment inspections at all?

I remember Ali once posted about that question, 875gator.
She thinks that a good buyer's broker should be able to walk-through with the buyer and check/point things out.

Not all buyer's brokers are as good as Ali.

printer - if you don't understand the difference, and the proper way to proceed in contract negotiations, you are in no position of buying real estate

Buyer is already in a weak position waiting for contracts to be completed and signed, etc. Why on earth would a buyer want to be in an even weaker position by spending money on an aspect of the transaction before terms for the transaction are firmly outlined and minimally binding?

I understand why a broker would want it, better chance of transaction closing once at contract.

Ali,using your example, first of all, I think any buyer would be able to visualize ahead of time how the balcony will look in original concrete as 99% of balconies are? And would choose to not bring it up as a code violation if they like the wood.

How about inspector finds a small plumbing leak behind wall that is not immediate, could be 2/3 years before damage actually shows, it's like a 6K repair.
Pre contract inspection buyer brings it up. Seller says it's fine now, dont want to give a credit. Sayonara. Sells to someone else. Buyer out $500 bucks. Seller out $0.

Or post contract inspection buyer with a sample negotiation; " seller must remedy or credit any major repairs regarding leaks,appliances up to $XXXXX at time of closing. Let's say the amount negotiated was 5K.
Inspector found electrical problems as well needs 2K. So 8k in repairs of which seller is obligated to 5K regardless. If market conditions are poor, buyer can negotiate with seller for the 3K balance.
If market conditions turn strong..... buyer may have to accept 5K only or cancel contract. Still better than the shmuck who payed $500 to inpsect someone elses house.

875, when someone inspects an apartment unit, they can tell you if the floor is sagging or the window seals are weak (which is useful if you can't see those things for yourself) but they still don't find the things that would be truly expensive for a building to fix .. like wear of the building's roof, or trouble with the building's heating system.

So I don't like apartment inspections because I think that there are just too many things that are outside the scope of the inspection.

I will eat my hat if anybody in Two Fifth Avenue ever brought in an inspector who said, "you know, honey, that's a nice unit, but I've got to warn you, this building is going to need $20 million of facade work in the next couple of years."

ali r.
DG Neary Realty

Truth, I understand where you're going .. but given that my problem with apartment inspections is that they're not thorough enough ... how does the inspector find this "not immediate" "behind wall" leak?

electrical, I grant you, you'll have a better chance of catching.

ali

i would do inspections after the lawyer reviewed the board minutes, financials and prospectus. you can schedule an inspection in 2 weeks after the lawyers start talking. this way, it will the last thing prior to signing a contract.

a few weeks ago, i did an inspection of a house while the attorneys were going back and forth. my wife saw the house in the evening and didn't notice what came to be a church down the block across the street. it was almost the same size as other houses. during the inspection i noticed the church and on sunday drove by when the services were starting. emailed my attorney when i parked on the corner to take the contract and throw it in the garbage.

by doing the inspection before, you are there with a person who works for you and looks at everything. you are also looking at the same time. you may find that the great kitchen is not as great as you start opening the cabinets. the bathroom tile is not as nice during close inspection. the day time doorman is a complete ass. the super wants you to give him $100 for the inspector to see the roof and boiler, though you already scheduled this appointment.

Generally it makes no sense to do an inspection of a co-op unit as any building issues (along with known issues in individual units) will be noted in the documents you will view during the due diligence process.