If you have an inspection and put requirements in the purchase contract for an owner to fix problems that are technically the responsibility of the board, you might as well forget about buying right then and there. Most boards simply will not approve a transfer of shares to a new owner if there are repair contingencies in the contract for which they (the board) are responsible.

They in fact may be responsible for them, but they are often not inclined to approve a new owner if he or she is insisting on the board making repairs, even minor ones, as part of the purchase agreement (and most coop owners are powerless to get a board to quickly make any kind of repairs unless they are brought on by an emergency of some sort).

Additionally the board may believe, perhaps unjustly, that the potential new owner will be a nitpicker about maintenance that they would just as soon not have to deal with on a regular basis down the road.

The same issues can come up in the sale of condos, but because board approval is generally a formality, the board itself is unlikely to block a sale solely on the basis of making the purchase contingent on repairs to the unit. Here again, however, most sales have no inspections, but the reason to a large degree is more along the lines of:

"That’s the way we do things in Manhattan. If you don’t like it, don’t buy here."
What’s contributed to this attitude may be obvious to many of you. For a number of years now, neither coop or condo owners have had to worry about selling. It wasn’t necessary to accept contracts that had any kind of contingency -- inspection contingencies or mortgage approval clauses, to name two of the most common in other real estate markets. There was always another buyer around the corner ready to buy with no strings attached. So a culture has evolved where there is almost an expectation among sellers – apparently perpetuated in part just from breathing the rarified air here – that a buyer will know better than to even ask for such things.

Our purpose is not to champion this practice, but to simply make you aware of it.

This is often not the case in the outer boroughs by the way, where inspections are fairly common. But, in keeping with the many unique elements of the purchasing process in the city, the Manhattan community has developed its own way of doing things, and skipping the inspection has become the norm. Many real estate brokers, in fact, commonly advise against getting one.

Their reasoning involves two major points. Number one we discussed above. Many sellers and most boards won’t approve a purchase contract with repair contingencies. An inspection request is a "deal killer" at the outset.

Number two – in addition to red flags that might be raised by the buyer’s attorney during the "due diligence" phase – a seller must by law, if specifically asked by a buyer, reveal any known defects in his or her unit (including a statement regarding asbestos hazards in older buildings). Taken together these afford a measure of "protection" for buyers, helping them decide if they wish to proceed with the purchase

As we’ve intimated, a culture has evolved in the city where most sellers ignore purchase offers requiring inspections. They sell their unit "as is". Take it or leave it. We’re not saying this is the way it "should" be, or that this is the way it is in other cities. Just the way it’s been done here.

Buyers new to this market may find it hard to believe, but after you make three or four offers on different apartments and have each one turned down (often for a variety of reasons, a low offer being the most common of course, but also including the submission of various contract "contingencies" unacceptable to the seller, including inspection clauses), you ultimately end up writing one with no contingencies what-so-ever – or end up never finishing in "first place" on the apartment you really want.

Of course we understand the merits of having a property inspected. And with sales slowing, more homeowners may be amenable to granting them. But this is a touchy issue with strong feelings for and against – and for now, no matter how logical they are from a buyer’s perspective, you will generally be "bucking tradition" if you insist on one.

We think it best to weigh your broker’s input carefully before you make a final decision one way or the other.

If you’re dead set on an inspection, here’s what you need to know.

There are a variety of "certified" or licensed professionals you can hire to go through a unit from top to bottom, and determine any deficiencies that need correcting (typical price is $500 - $1000).

The inspection should take place before signing the contract – during the due diligence phase. The advantage is obvious, you’ll know of any defects at the outset – and you can choose, if you wish, to try and negotiate repairs, price adjustments or simply not proceed with the purchase.

We can’t resist restating, however, what we’ve tried to make obvious throughout this section: Much of the time in the Manhattan market, the only thing a seller will do is guarantee that whatever the apartment’s condition on the day you sign the contract, that’s the condition it will be in on the day of closing.

Some Additional Information

For those who are curious, here is a detailed list of what a professional inspector typically looks at, to the degree possible, in a multiunit building:

Building Exterior: Condition of bricks, façade, walls, paint, caulking, sidewalks, drainage

Basic Building Structure: condition of common area structural elements including foundation, basement, joists or floor slabs, rafters, walls, ceiling

Building Systems: evaluate boiler, elevators, mechanical and environmental systems

Roof: Evaluate its general condition, where it is in its life cycle, look for leaks, damage, etc.

Apartment Interior: Condition of floor, walls, ceiling, doors and windows. Check for evidence of water damage.

Bathroom: check operation of tub, toilet, shower, faucets, etc. Check tub enclosure, condition of tile and grout.

Kitchen: Evaluate cabinets and check operation and condition of all appliances

Plumbing: Check type and condition of pipes (lead, copper, plastic), drains, fixtures, and hot water supply.

Heating and Air Conditioning: functionally check and evaluate their condition.

Electrical: check condition and operation of all switches, fixtures, outlets, wiring, circuit breakers and main service panel.

Evaluate Insulation: check for energy rating and for mold.

Evaluate other built-in or hard-wired systems as applicable: security, intercom, entertainment, central vacuum, etc.

Note: only some inspectors are state licensed engineers. This doesn’t mean that unlicensed inspectors are to be avoided – many do a great job and have been through some type of certification process – but if you want someone with the expertise of degreed engineer, take note of the inspectors credentials. As with most things in life, you’ll pay accordingly.

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