INSPECTIONS
AND APPRAISALS

An inspection is different from an appraisal, and as a buyer you are going to want, and have to pay, for both.   Inspections In the Colorado Real Estate Commission standard Contract to Buy and Sell Real Estate, the buyer is given the right to inspect the property and the inclusions, and to terminate the contract if the property or the inclusions are not satisfactory in buyer’s subjective opinion. Alternatively, the buyer can ask the seller to remedy the unsatisfactory conditions. It is common for buyers to hire a professional inspector. Inspectors are listed as Home and Building Inspectors in the Yellow Pages. Unfortunately, Colorado does not license home inspectors, so you want to be careful when you hire one to make sure that he/she is competent and will do the inspection that you require. A typical inspector will examine all of the mechanics of the property; the plumbing, electricity, heat, hot water heater, and appliances as well as the structure; the roof, the foundation, etc. Among the items that you may want to include in your inspection are tests for radon, lead-based paint, and mold. The Environmental Protection Agency publishes booklets on all three of these hazards. The buyer has the right, prior to the Inspection Objection Deadline to notify the seller of the buyer’s choice to terminate the contract or give the seller notice to correct. The parties will then negotiate whether the seller will do the necessary repairs. Generally if the repairs relate to health or safety issues the buyer should expect the seller to do the repairs. Of course, the seller may refuse to do all or some of the repairs that the buyer requests and only if the parties can agree on what will be done will the contract continue. The contract contains a deadline for the buyer to submit objections to the condition of the property, and provides for a deadline for the parties to resolve how those objections will be handled. If the parties can not reach an agreement by the deadline, the contract terminates.   Appraisals If there is a lender involved, the lender will likely require an appraisal of the property. The appraisal is a formal, written opinion of the market value of the property. Appraisers ARE licensed in Colorado, and generally the lender selects the appraiser and the buyer pays for the appraisal. In the Contract to Buy and Sell, the buyer has the right to terminate the contract if the appraised value of the property does not equal or exceed the purchase price. An appraisal currently costs around $350 for a residence, and you don’t want to incur that expense until you know that you have the house under contract and that there are no unresolved inspection issues   <<< Back