Point-of-Sale Certificate of Inspection

[Ryan Raider]

Hey guys!  We're looking to invest in the Cleveland area in the next few months, and we're tying to learn as much as we can about the area.  I'm trying to make sure I understand the POS inspection process.  I'll use Cleveland Heights, for example.  They require 125% escrow for Class A repairs.  Is this what the timeline would look like:

Make offer on home

Offer gets accepted

Seller requests POS inspection from city

Seller provides buyer with POS Inspection Certificate

Any Class A items not repaired before closing will have an escrow account created for 125% of the typical repair value determined by the city.  Non-Class A items are not a part of the escrow account, but must be repaired within 90 days of closing.

If this is how the process works, I have two questions.  First, does the Inspection Certificate have a dollar amount listed for what would be required to be deposited in the escrow account if nothing is fixed before closing?  Second, I see in the POS Inspection Application states "The owner is responsible for correcting all violations found at the time of inspection within ninety (90) days, irrespective of whether or not the property sales, unless extended for good cause."  Have you guys found this to be a bargaining chip to use in negotiations, as if they seller isn't willing to negotiate and you back out, they're responsible for paying for everything if they don't get a new buyer pretty quickly?  Thank you in advance for your help!

[Brian Garlington]

POS in Cleveland can be a pain. It can be great for the but a pain for the seller. Looking at things from a long term perspective I personally chose not to buy any property out there that have a POS requirement because ultimately I may have to deal with the intricacies of that if I decide to sell.