One of the most scary parts of the real estate transaction for buyers and sellers is often the Home Inspection Process. The unknown can be worrisome but The Real Estate Pros are here to help you understand and navigate through this time with minimal stress! 

The inspection process can be different state to state (and around the world) but we can help you wrap your head around what to expect here in Indiana! 

Purpose of a Home Inspection

A Home inspection can provide the opportunity for buyers to identify any major issues with a home prior to closing on the purchase. 

REMEMBER: The home inspection is a “snapshot in time”. It evaluates the home that day and at that time. It is not a guarantee or warranty of condition at anytime in the future.

There is a section in the Indiana Association of Realtors Purchase Agreement dedicated to home inspections. It helps define the terms, definitions, types, time periods, etc… of the inspection process. 

Home Inspection Types

Most buyers reserve the right to have home inspections as part of their offer (the purchase agreement.) You choose a number of days in which you have to hold, receive and respond to these inspections. 

Inspections are at the buyer’s expense (unless otherwise agreed to or required by lenders) and should be conducted by licensed, independent inspectors or qualified, independent contractors.

There are different inspections available and as the buyer, you choose which ones you want to have. You should always check with your lender, too. Some loan types may require certain inspections as part of their process and it’s typically cheaper and better to get them at the same time.

Different types of inspections might include:

  • Whole House Inspection: Looks at structural/foundation, roof, mechanicals, plumbing, HVAC, electrical, etc…
  • Pest Inspection: Verifying whether wood destroying pests exist and if a treatment is needed or if the home has already been treated.
  • Radon Test: Verifying if the radon gas level of the home is within acceptable standards or not. 
  • Well Water Test: If the home is on a well, does the water safe for consumption. 
  • Septic Test: If the home is on a septic system, a dye test can ensure it is working the way it was intended.
  • Well/Septic Location Report: When a home has both a private well and septic system, this report ensures the well is located at least 100 feet from the septic tank’s drain field and at least 10 feet from a property line. 

There can be other inspections, but these are typical in our area.

According to the purchase agreement, the seller must make all areas of the property available and accessible for the buyer’s inspection as well as have the water, gas, electricity and all operable pilot lights on for the inspection.

All Party Timelines

Buyers must act within the agreed upon timelines as specified in the purchase agreement.

If a buyer does not formulate a response and deliver within the timelines or deliver a written request for an extension prior to the contract deadlines, they are accepting the property as is, with no repairs being made.

Likewise, a seller must respond to buyer inspection responses within the timeline given in the inspection response. If they do not, the buyer’s inspection response is deemed accepted and the transaction continues to closing.

Time is of the essence in real estate and only written agreements/responses are recognized.

What is a Defect?

Very few people want to buy a home that has a significant defect.

The inspection section of the purchase agreement protects both the buyer and seller by defining the process, defaults, each parties’ responsibilities and more. 

One important line in the purchase agreement is this:

Previously Disclosed Defect: Buyer agrees that any property defect(s) previously disclosed by seller, or routine maintenance and minor repair items mentioned in  any report, shall not be a basis for termination of this agreement.”

This means you cannot call out a defect that was disclosed prior to writing and accepting an offer. And, maintenance and/or small repairs are not considered defects. A seller has no obligation to fix/repair these and they have no bearing on completing the transaction as written.

Defining a “defect” is very important so that all parties understand. Under Indiana law, a defect means:

“… a condition that would have a significant adverse effect on the value of the property, that would significantly impair the health or safety of future occupants of the property, or that if not repaired, removed or replaced would significantly shorten or adversely affect the expected normal life of the premises.” Lines 218-221, IAR Purchase Agreement

What if a Defect(s) is Found?

If the buyer’s inspection reveals a defect of the property not previously disclosed by the seller, the buyer must:

  1. Provide the inspection report or relevant parts of the report to the seller
  2. Give the seller the opportunity to remedy the defect(s)

If the seller is unable or unwilling to remedy the defect(s) prior to closing (or an agreed upon time), the buyer may do one of two things:

  1. Terminate the purchase agreement with the seller
  2. Waive the defect and proceed with the transaction

Otherwise, the buyer and seller – through their agents – negotiate the terms of the inspection response until there is agreement between both parties. Then, the transaction continues to closing! 

Knowledge is Power!

Knowing the process and what is expected makes it easier to understand with less chance of confusion from either party. 

The Real Estate Pros have negotiated tons of Inspection Responses for both buyers and sellers. We know the terms and will walk you through every step of the way.

Rest easy and give us a call today! 317-572-5589


Caveat: We are Realtors, not attorneys. Nothing in this article should be construed as legal advice. For specific advice about real estate law, please contact an attorney.