Investigations, wading through information, and escrow in general can be stressful and overwhelming. It's important to know your options, and how you can utilize information to benefit you while in escrow!
A buyer's position is really one of investigation, especially in the beginning of escrow. It's always recommended to do very thorough due diligence - regardless of the information already on file. For example- do your own home inspection. Different inspectors can find different things and there are varying degrees of thoroughness.
However, did you know, that whatever you find out will become a disclosure for the property if you don't move forward? For example, if you find out the roof needs to be replaced and it's in the home inspection- that will have to be disclosed to any new buyer. Even more importantly, if you get a bid for the work, that bid will need to be disclosed. This can be a crucial negotiating point since that information stays with the property, and many times, sellers realize it's in their best interest to see if they can work out an equitable solution with their current escrow.
The investigation period of escrow, which is typically 17 days (or negotiable in the contract), is meant to protect buyers and make sure there aren't any surprises.
It's important to know that reports and inspections follow the property. Typically there are two negotiation periods: one for the initial contract, and the other is after the buyer completes their investigations and may come asking for work or a credit.
It can be a smart play to get a home inspection and a pest inspection ahead of time, and provide it as a disclosure before an offer is accepted. This can help mitigate surprise or unknown costs, especially on a property that needs work. Sellers can spend anywhere from $500 - $1,000 on these, but it could save them thousands, because typically the minimal cost of a home inspection far outweighs any surprise repairs. Whatever inspections are available before an offer is accepted, the buyer will take into account with their purchase price- which many times is easier to swallow while they are excited rather than finding out while feeling the pressure of escrow.
Either way, it's important to know how and why investigations play such a large roll in escrow and to make sure that you have a knowledgeable advocate on your side.