I know what you are thinking… “The PIC WHAT?”???
Pronouced “pick.ra”, this form is the Property Inspection Contingency Removal Addendum. What this means in a nutshell is that this form removes the home inspection contingency in the purchase agreement…. i.e. one step closer to closing! So you can see just how important this form is!
I only wish all PICRA’s were created equally. Because I have closed hundreds of real estate transactions over the years, I can tell you from first hand knowledge every PICRA is different. As your agent, we will point out the most important factors in this document and guide you towards your next steps.
Here are few things to remember when moving through this stage of the process:
You have a limited timeframe, 5 days to be exact, to give the buyer a response to this request. This includes weekends and holidays. Which means you need to do all of your investigating work (getting contractors to review and give advice on repair items) AND accept the buyers request, or get the buyer a written counter offer of what items you will/will not complete within that 5 days. Don’t forget, here are some contractors if you need them.
Keep in mind the ONLY items the buyer is asking you to address are the ones on the PICRA. They are not asking for the full inspection list, although they will include the full inspection for us to review and reference. Don't get distracted with anything else on the inspection... focus only on what is being asked for.
If the buyer asks for a licensed contractor to complete the work, they must have a license in the state of Virginia that is verifiable through The Department of Professional and Occupational Regulation. Make sure to ask your contractor before they come out if they are in fact licensed. If the buyer doesn’t specify then a handyman can complete the work. If the request is made for a licensed contractor and we believe it is something a handyman is capable of, then we may counter that request. Items we don’t believe a handyman should complete include but are not limited to: electrical issues, plumbing problems beyond a minor leak, roof repairs, foundation issues, and HVAC problems
We DO require YOU to speak to the contractors directly in order to get opinions and estimates. We in no way guarantee the contractors we recommend, we simply use them because our clients have used them in the past and have been happy with their services. We are always happy to install a lockbox on the property that is accessible by the contractors to make it easier for you to schedule these estimates.
5. Once you say yes to an item on this list, that means YES, you WILL make the correction they are asking for. That doesn’t mean a week down the road you can say “actually this other contractor said it doesn’t need to be done”. This is part of a legally binding agreement. Your response to this form needs to be firm and not wavering. So make sure you do all your due diligence in the 5 days allotted for it.
6. All agreed upon repairs on the PICRA must have a receipt showing work was complete and that the cost is either paid in full at the time of completion OR the amount owed will be taken out of the proceeds of the sale at closing.
7. All repair items agreed to MUST be completed no later than a week before closing. The buyers have the right to come back and check the work after it’s been done and need a week to schedule and complete their follow up inspection.
8. Please keep in mind, what this buyer asks for, is most likely, what MOST buyers will ask for. It is not a personal attack. Just look at this as one step closer to your move and accomplishing your goal!
Once this step in the process is complete you should take a deep sigh of relief. While we still have the termite and moisture inspection, appraisal, and loan approval to get through, this is the part where most deals fall apart. So let’s stay focused, think rationally, and keep this deal moving forward! Let’s make it happen!
