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So you're closing date is just a few days away. You're all packed up and ready to move. Your lender has issued a clear to close and you're all set to go. What could possibly go wrong? Then you get a call from your agent and they tell you that the seller has not completed the municipal inspection. But you say, "wait a minute...I've already completed my home inspection!" A municipal inspection is something totally different. 

Though not the case in all municipalities, some require that a point of sale inspection be completed prior to the change of ownership. This is to ensure that the dwelling is up to code and is safe for occupancy. It is not uncommon for sellers to be unaware that their city, town, or village requires this type of inspection to be done prior to sale. In fact some municipalities have passed laws to prevent the legal transfer of ownership if this inspection is not completed.

To avoid this hurdle in the process of purchasing your home, make sure you thoroughly discuss with your real estate agent prior to placing an offer on a home just what the requirements of the municipality are. Most often, it is on the seller to pay for and order this inspection. However, some corporate, institutional or government sellers of foreclosed homes may not pay for this to be done. Even so, it must be completed if the municipality requires it, so it is important to make sure that one of the parties to the transaction take care of this as soon as possible. It is usually best for listing agents to encourage their clients to order the inspection at the time that the property is listed. However, keep in mind that many of these inspections expire as early as 30 days while some could be as long as six months before they expire. In any case, the inspection must be valid in order for it to be considered by the village upon sale of the home.

In the scenario mentioned at the outset, what happens if the village inspection has not been ordered? This must be done right away to not further delay the close of the transaction. Sometimes, it could take up to a week or longer for an inspector to complete the village inspection. Therefore it is vital that this be given prompt attention. What if the inspection fails? While a failed inspection will not necessarily prevent the sale of a home, the responsibility of the repairs of the failed items on the inspection must be negotiated between the buyer and seller. If the buyer is going to assume the repairs, most municipalities will require the buyer complete a notarized 'As Is' affidavit stating that they will complete the repairs within a specified period of time after taking ownership. Another point to consider is that the lender may require their repairs be completed prior to sale if they affect the property's value or could negatively affect the appraisal.

In conclusion, be sure to find out if the municipality that you are purchasing your home in has this requirement for a point-of-sale inspection. If you are selling your home, make sure that you get this done as soon as possible and disclose any failed items to all potential buyers. It can be a real headache when this comes up right before closing.