Inspection Objection Deadline

During: Contract to Close: Inspection and Due Diligence: Inspection Objection Deadline

The Inspection Objection Deadline is part of the Inspection and Due Diligence process and a deadline in our Contract to Buy and Sell Real Estate.

The are some significant concerns to be aware of relating to the Inspection Objection Deadline. Let’s look at these in detail.

Contract to Buy and Sell Real Estate

This deadline relates to § 10.2 of the Contract to Buy and Sell Real Estate in Colorado.

Section 10.2

10.2. Inspection Objection. Unless otherwise provided in this Contract, Buyer acknowledges that Seller is conveying the Property to Buyer in an “as is” condition, “where is” and “with all faults”. Colorado law requires that Seller disclose to Buyer any latent defects actually known by Seller. Disclosure of latent defects must be in writing. Buyer, acting in good faith, has the right to have inspections (by one or more third parties, personally or both) of the Property and Inclusions (Inspection), at Buyer’s expense. If (1) the physical condition of the Property, including, but not limited to, the roof, walls, structural integrity of the Property, the electrical, plumbing, HVAC and other mechanical systems of the Property, (2) the physical condition of the Inclusions, (3) service to the Property (including utilities and communication services), systems and components of the Property (e.g. heating and plumbing), (4) any proposed or existing transportation project, road, street or highway, or (5) any other activity, odor or noise (whether on or off the Property) and its effect or expected effect on the Property or its occupants is unsatisfactory, in Buyer’s sole subjective discretion, Buyer may, on or before Inspection Objection Deadline (§ 3):

10.2.1. Notice to Terminate. Notify Seller in writing that this Contract is terminated; or

10.2.2. Inspection Objection. Deliver to Seller a written description of any unsatisfactory physical condition that Buyer requires Seller to correct.

What We Often Use

What do I typically (or often) use for this deadline in our Contract to Buy and Sell Real Estate?

That gives us 10 days to schedule an inspector, for you to meet the inspector out at the property, get the inspection report back, have a discussion about what (if anything) we’re objecting to and give me time to draft up a copy of the formal Inspection Objection form, get it over to you to sign and get it back to the Seller’s agent before the deadline.

In some cases you might need to hire an attorney to draft up specific clauses to address something that is unusual. Yet another reason to get your inspection done early because often attorneys are not the fastest folks in the world to draft legal language for you.

What Are We Doing

So, what are we typically doing during this period of time? Here’s the short list:

• Providing you with a list of home inspectors – For clients working with us in Northern Colorado, we have an templated email that we send out describing the several home inspectors that our clients have used and good experiences with along with a little commentary on my opinion of their strengths and weaknesses. The Buyer picks the home inspector, but we provide them with a list of ones that we’d use and that we recommend.
• Discussing what, if anything, you’d like to object to – If during your inspection period you find things that you’re not happy with, we can discuss whether those might be good things to object to.
• If you’d like to object to something based on inspection: preparing Inspection Objection for you – If we decide there is at least one thing that you’d like to object to, I’d prepare an Inspection Objection. For very complicated objections, you might need to contact an attorney to have the Inspection Objection drafted, but for most normal objections, I can probably write it.
• If you’d like to terminate based on inspection: preparing Notice to Terminate and Earnest Money Release – If rather than objecting you decide, after the inspection period, you’d rather just terminate the contract and not continue, I can prepare a Notice to Terminate and Earnest Money Release that you would need to sign and we’d need to have submitted to the Seller’s agent on or before the Inspection Objection Deadline.
• If you accept the property “as is”: prepare an Inspection Resolution – If after inspecting the property, you don’t find anything worth objecting to, we can complete an Inspection Resolution stating that you’re willing to accept the property in current, “as is” condition.

What Are You Doing

Here’s typically what you’re doing between when you first go under contract and the Inspection Objection Deadline:

Immediately After Going Under Contract

Selecting a home inspector – You will usually select a home inspector from a short list of Home Inspectors your real estate agent has recommended to you (unless you have someone you already know you want to use). For my local clients in Northern Colorado, I usually send you an email with our list of recommended Home Inspectors just after you get a contract accepted along with some comments about the Home Inspectors.
Paying home inspector – Some Home Inspectors will require you to pay for the Home Inspection at the time you order it and before they’re willing to go out and complete the Home Inspection. Buyers are responsible for paying for the Home Inspection.
Coordinating a time to meet the inspector at the property for the inspection – You and the Home Inspection will coordinate a time for having the home inspected. Often, the Home Inspector will then call the real estate office representing the Seller to schedule the home inspection. I do not typically attend home inspections, so you do not need to worry about scheduling this with me.
Decide if you’re going to test for Radon – Radon is a naturally occurring radioactive gas that has been linked as a possible cause of cancer. In most cases, if the property does not already have a radon mitigation system installed (and in some cases where they already do have one installed), we would recommend that our clients have the property tested for radon. If the test comes back in high, we might object and ask that a radon system be installed to reduce the radon levels to below the federal recommended action limit.
Decide if you’re going to test for Mold – Mold exists in most houses. Excessive mold and/or harmful mold can be a health hazard. Often your home inspector will point out possible mold situations on your normal home inspection. Most home inspectors are not mold specialists and so if they identify a possible mold situation, you may want to hire a mold specialist to evaluate the possible mold situation and get a professional opinion of suggested actions and costs.
Decide if you’re going to test for Meth – Meth contamination is uncommon, but can an expensive problem to mitigate. Most of my clients are forgoing meth tests, but in some cases you may want to test for meth to prevent expensive mitigation costs should you discover the property you’re buying is contaminated with meth.
Decide if you’re going to test for Lead-Based Paint – Lead-Based Paint was used primarily prior to 1979. So, if you’re buying a property built prior to 1979 and you have concerns about Lead-Based Paint you may want to consider having your property tested for Lead-Based Paint and get recommendations from qualified contractor(s) to see if what you should do to have the Lead-Based Paint mitigated.
Decide if you’re going to test for Asbestos – Some problems may have been built using asbestos. Asbestos, when undisturbed poses little health risks, but if disturbed can results in cancer causing particulate to become airborne. This particulate when inhaled can cause a special type of cancer. For this reason, some buyers if they believe asbestos is present in their home, have an expert evaluate it and determine what should be done.
Decide if you’re going to have the sewer scoped – The older a home is the more likely you are to have blockages or obstructions in your sewer line. You may want to have the sewer line to house scoped during your inspection period if you believe the property may have possible issues with the sewer line.
Decide if you’re going to test for terminates – In some parts of the country, terminate inspections are automatically encouraged. While we have terminates in Colorado, it is rare to have someone test for terminates while purchasing a home unless your home inspector sees evidence of terminate damage.

At Inspection(s)

Meeting home inspector at the property for inspection – You should plan to meet your Home Inspector at the property and have them show you what is going on with your home during the course of the inspection. In some ways, a Home Inspector can be thought of as giving you a tutorial on how the mechanical systems of your home operate and what aspects of your home should be monitored and/or fixed over time.

At the inspection, verify that Carbon Monoxide Detectors are installed
At the inspection, check appliances that are inclusions to the contract and write down serial numbers/take photos of appliances and their serial numbers
Verify info and thoroughly inspect information from CLUE report with home inspector
Verify info and thoroughly inspect information from Seller’s Property Disclosure

Additional Inspectors/Contractors Needed? – If you find something on the inspection that you want to get additional information/bids on, coordinate getting additional inspector(s)/contractor(s) out to property for follow up inspections.

After Meeting Inspector(s)/Contractor(s)

Receiving a copy of the home inspection report from home inspector – Usually a day or two after you complete your home inspection with your Home Inspector, they will usually email you a copy of the home inspection report.
Discussing what, if anything, you’d like to object to with real estate agent – After your home inspection (and sometimes after you receive your home inspection report), have a discussion of the things that came up during your inspection and whether you require them to be addressed before you’d be willing to buy the property or if you’re OK with them and willing to move forward with the property in “as is” condition.
Let real estate agent know what you’d like to object to – Let your real estate agent know what specifically you are objecting to so your real estate agent can prepare an Inspection Objection.
If you’d like to object to something based on inspection: review Inspection Objection to make sure it covers what you’d like to object to (and your proposed solution if applicable) – Once your real estate agent has prepared an Inspection Objection for you based on what you told them, read it over and make sure it appropriate describes what it is that you’re objecting to and, if you’ve suggested solutions, make sure the solutions that were suggested are clear and acceptable to you.
If you’d like to object: sign Inspection Objection – If the wording on the Inspection Objection is acceptable to you, usually you’d sign it. If you’re working with me in our local market that means you’d usually sign it via DocuSign.
If you accept the property “as is”: sign Inspection Resolution – Many times you have the home inspected and are OK with purchasing the property in its current, “as is” condition. In those cases, your real estate agent will prepare a Inspection Resolution (or equivalent in your market) saying you’re OK with the inspection, you’re not objecting and you accept the property in current, “as is” condition.
If you’d like to terminate: sign Notice to Terminate and Earnest Money Release – If there are issues with the property that you would be unwilling to deal with (even if they could be fixed), you can terminate the contract using a Notice to Terminate form and if the terms of your contract were written such that you’d get your Earnest Money back then you’d also sign an Earnest Money Release form.

Inspection Resolution Deadline

Often, after completing the Inspection Objection Deadline, we move on to the Inspection Resolution Deadline.

IMPORTANT NOTE: This checklist is based on what I personally use with clients in Northern Colorado and is based on the Colorado Real Estate Commission approved Contract to Buy and Sell Real Estate. Please rely on your local real estate agent for how it works in your local real estate market. This process will definitely vary in different States.