First I need to tell you what sparked my keen interest in this topic. I've recently started working with a new buyer. As usual they supplied me with a pre-approval letter. But this one had something different on it that I had never seen before. "Property MUST be inspected prior to closing by a licensed inspector approved by this bank." Hummm....curious. Colorado is a buyer beware state, and as Realtor's we highly encourage any and all buyers and sellers to have a home inspection by a licensed inspector. However, this is the first time in my Real Estate career that I've seen a bank require it.
Now with that being said, lets look at the Inspection Resolution.
Below are the thoughts from my connection Sean Young on LinkedIn:
One of the most discussed topics from Realtors this year is on the new inspection resolution and how will lenders view it.
The Inspection Resolution form is now a part of the contract unless it is waived on the Inspection Objection form. Either the Resolution or the waiver on the Inspection Objection form must be received prior to ordering the appraisal for any contract written 1/1/13 or later.
The Resolution or waiver on the Objection form must be received prior to ordering the appraisal – no exceptions. The Resolution is now a part of the contract and we only have a fully executed contract once we are in receipt of the form.
Below are some questions and answers I have been asked in the last week.
* Is the Inspection Resolution ALWAYS required?:
NO – It is required unless the borrower withdraws the Inspection Objection by executing Item #2 on the Inspection Objection form.
* Does the Inspection Resolution need to go to the appraiser?:
YES – Unless the borrower withdraws the Inspection Objection by executing Item #2 on the Inspection Objection form.
* When does the Inspection Resolution form need to be provided to the appraiser?:
At the initial appraisal order, NO exceptions.
* If the appraiser has the Inspection Resolution form, must (s)he condition for repair/final inspection based on the completion of all of the items listed?:
NO – however the appraiser may have their own interpretation of the contract and their responsibilities. Also, the appraiser may still require additional items at their discretion.
* Allowable Scenarios:
* Borrower withdraws Inspection Objection by executing Item #2 on the Inspection Objection form, copy received, can proceed with appraisal order.
* Borrower withdraws Inspection Objection by executing Item #2 on the Inspection Objection form; copy received along with Amend/Extend stating seller agrees to contribute a monetary amount towards borrower’s closing costs/prepaid. Can proceed with appraisal order. The A/E may not read “in lieu of repair of inspection items” or verbiage to that affect.
* Fully executed Inspection Resolution form is received, can proceed with appraisal order.
Below are some questions and answers I have been asked in the last week.
* Is the Inspection Resolution ALWAYS required?:
NO – It is required unless the borrower withdraws the Inspection Objection by executing Item #2 on the Inspection Objection form.
* Does the Inspection Resolution need to go to the appraiser?:
YES – Unless the borrower withdraws the Inspection Objection by executing Item #2 on the Inspection Objection form.
* When does the Inspection Resolution form need to be provided to the appraiser?:
At the initial appraisal order, NO exceptions.
* If the appraiser has the Inspection Resolution form, must (s)he condition for repair/final inspection based on the completion of all of the items listed?:
NO – however the appraiser may have their own interpretation of the contract and their responsibilities. Also, the appraiser may still require additional items at their discretion.
* Allowable Scenarios:
* Borrower withdraws Inspection Objection by executing Item #2 on the Inspection Objection form, copy received, can proceed with appraisal order.
* Borrower withdraws Inspection Objection by executing Item #2 on the Inspection Objection form; copy received along with Amend/Extend stating seller agrees to contribute a monetary amount towards borrower’s closing costs/prepaid. Can proceed with appraisal order. The A/E may not read “in lieu of repair of inspection items” or verbiage to that affect.
* Fully executed Inspection Resolution form is received, can proceed with appraisal order.
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