One of the most important time periods in a real estate transaction is the inspection period, during which the buyer may conduct inspections of the home in order to identify any defects that might influence his decision about whether to proceed with the sale. If the inspections do uncover issues the buyer deems unacceptable, the buyer can negotiate with the seller for repairs or reimbursement. If he's unable to reach an agreement with the seller, he is within his rights to cancel the sale. The Georgia Association of Realtors purchase and sale agreement explains those rights. They fall under a "due-diligence" heading that gives buyers the right to "inspect, examine, test and survey" a property at any reasonable time.
Obtain a copy of your purchase and sale agreement.
Turn to Page 7 of the agreement, and find the Binding Agreement Date. This is the contract date that provides the basis for all the contract deadlines.
Turn to item 11 of the purchase and sale agreement, titled "Property Sold Subject to Due Diligence Period or 'As-Is' " on Page 3. If a check mark appears at Section A1 noting that "Contract is Option Contract," look at the line on which the number of days is entered within which the buyer may terminate the agreement for any reason.
Count the number of days from the binding agreement date. This is the inspection period. The ending date is the deadline by which the inspections must be complete. For example, if the binding agreement date is Jan. 1, 2012 and the contract gives the buyer 21 days for due diligence, the inspection period is 21 days and it ends on Jan. 22 -- 21 days from Jan. 1.
Turn to Page 6 of the purchase and sale agreement. Read Section 20, "Exhibits and Addenda," to see if addenda, or additions, have been made to the contract that might affect the due diligence date. Read the "Special Stipulations" section to see if any changes have been made there that might affect the due diligence date. Look at the very bottom of the page to see if there is a check in the box to note that "Special Stipulations" are attached to make sure there are none that might affect the due diligence date.
Adjust the inspection period, if necessary, according to addenda and stipulations that affect the due diligence date. If there is none, the inspection period is the period that begins on the binding agreement date and runs until the ending date.
Buyers should order inspections early. If they need to negotiate repairs, reimbursements or price reductions to compensate for inspection issues, the negotiations must be complete and the parties must reach an agreement before the due diligence period ends.
Consult an attorney if you have any questions about your contract.
Daria Kelly Uhlig began writing professionally for websites in 2008. She is a licensed real-estate agent who specializes in resort real estate rentals in Ocean City, Md. Her real estate, business and finance articles have appeared on a number of sites, including Motley Fool, The Nest and more. Uhlig holds an associate degree in communications from Centenary College.