I can understand if the public/consumer might think that those two terms are the same. But I am constantly amazed by how many agents use the term home inspection as if it were a feasibility study, and tell their buyers to make an offer on a home and that they will have 15 days during the home inspection to think about it.
Let’s just address the two terms:
Feasibility study– is a term mostly used in commercial real estate contracts. It allows the buyer to study/ research the commercial purchase on different levels. It could be an office building, a retail store or a restaurant. The feasibility study is conducted not on the building itself, as much as other market factors that might affect the success of the business, such as traffic pattern, county regulations as to use of hazardous material, noise level (if it affects the business’s success). If the buyer after conducting their feasibility study feels that the building is not suitable for the business, they can pull out of the contract with no penalty attached and their deposit is returned.
Home inspection – as its name indicates, it’s an inspection of the property itself. Since the sellers of a home are responsible to have the property in working order till the day of closing (with the exception of AS IS properties), it makes sense that a buyer with an accepted contract, would conduct his/her inspections (using a professional home inspector) to confirm that all components of the home are in working order. If they find issues with the home, the first option is for the seller to repair or replace. ONLY if the seller refuses to do the repairs needed, would the buyer be able to walk away from the contract without penalty and be refunded their deposit in full.
Experiencing cold feet, changing one’s mind, or not liking the neighbors next door is not an acceptable reason to cancel the contract. If the buyer wants to walk away, it will be at the cost of losing their deposit. Of course the buyer can make it difficult for the seller by asking for every single repair needed, but it is still the Seller’s first option to repair or to take a chance at losing the buyer.
Agents who tell their buyers they can walk away during the home inspection period, do not know their contract terms and are giving bad advice.
Thinking of buying a home in Naples? Have an experienced and knowledgeable agent on your side.