Have you ever wondered, after making a major purchase, whether you’d made the best decision? One of the best ways to minimize any “buyer’s remorse” after a real estate transaction comes well before you sign the final papers: hiring a home inspector.
Nearly every buyer gets a home inspection done during the “due diligence” period between the initial offer and the closing. Nowadays many sellers are also hiring home inspectors, to arm them with the most complete information about their home’s condition.
A home inspection is a thorough, detailed evaluation of a home’s visible and accessible components and systems, including the structure, foundation and roof, wiring, plumbing, heating and air conditioning. The purpose is to give the client, whether buyer or seller, a better understanding of its condition.
Home inspectors are professionals, often with backgrounds as contractors or building-code inspectors. They are licensed by the state, and must meet a stringent set of standards. Every inspection covers a checklist of issues that must be addressed in the final report to the client.
It’s important to understand what a home inspection isn’t.
It’s NOT an appraisal. The inspector will offer no opinion about a property’s value.
It’s NOT an estimate of what repairs might cost. That will require bids from qualified contractors.
It’s NOT a legal guarantee against a possible lawsuit alleging misrepresentation.
What it IS, though, is a snapshot of a particular house at a specific point in time.
From a buyer’s point of view, it’s obvious why an inspection is a good idea. When you’re putting up more money than you’ll likely ever spend on anything else, you want to know exactly what you’re paying for. And, of course, when thinking about the place you plan to make your home, you don’t want unpleasant surprises.
Here’s why a seller should also have an inspection done, ideally before the home is listed for sale.
· The inspector’s report can be a marketing tool. If everything is in great condition, your agent can say so in advertising your property.
· If any significant issues turn up, you can address them ahead of time, before a prospective buyer ever knows about them.
· Minor issues can be disclosed in advance. We don’t want to scare the buyer!
· An inspection helps keep things moving forward smoothly toward the close, avoiding delays while negotiations or last-minute repairs drag on.
· Inspections put the seller in a better negotiating position, by making sure there are no surprises.
Once a house is under contract, a buyer’s inspection may discover something that wasn’t already disclosed, or fixed. That very likely is because the seller didn’t know about it. If that happens, the buyer can take advantage of the “due diligence” period to walk away from the deal.
The cost of inspection is based on the house’s size and age. (Older houses may have more complex issues, or have harder-to-reach spaces.) The fee will be a few hundred dollars, in most cases less than $600. The inspector will present a written report to the client. Clients, of course, should share those reports with their real estate agents. It’s normally possible to schedule an inspection within a week or less. Expect it to take two or three hours.
One detail the homeowner needs to take care of in advance of an inspection: Make sure any clutter is removed from access points to crawl spaces and utilities, such as electrical panels, plumbing connections and the like. The inspector won’t be moving stuff around to get to where he needs to go; that’s the homeowner’s responsibility.
The buyer may have to coordinate the schedule with the seller to get access to the house. It’s a very good idea for the buyer to be present during the inspection. This lets the client walk through the house with the inspector and see the issues first hand. This will give much better context about how serious – or how minor – each issue is than just relying on a written report.
Often the inspector will go back and re-inspect after repairs are made. Sometimes this is included in the initial inspection fee, but it can be an extra charge. An alternative to a re-inspection is for the seller to document repairs by providing the buyer with receipts from contractors.
Every home inspection is going to find something. That doesn’t mean it’s a terrible home; even brand-new houses usually have some issues an inspector will flag. It’s typical to do some triage: separate what’s critical, and must be addressed immediately, from matters that might be less important, or that can wait.
For example: A missing hand rail on a front porch might be something a buyer could easily put off until later. Unless the buyer plans to have his elderly mother move into the house, which means the rail must be replaced immediately!
That’s one reason I like to work with, and recommend, a number of inspectors who are good about telling the client what’s more important, and what’s less. They are responsive and not necessarily alarmists. The best inspectors make sure the buyer understands everything they have found.
Regardless of which party has the inspection done, the seller will have some decisions to make.
Should the seller make the repairs, and raise or maintain the asking price? Or disclose a problem and negotiate a reduced price? Either strategy can make sense, though it’s often more profitable to make major repairs than to leave them to the buyer. For example: Listing a house with a brand-new roof, or heat pump, or modernized bathroom may justify more money on the sale price than the actual cost of those improvements. Many buyers are happy to pay more to avoid the hassles of getting repairs made themselves after closing the sale.
Homeowners should consider a pre-listing inspection a valuable investment, which will simplify negotiations, increase the odds of closing the sale quickly, and almost always help increase the selling price.
Have a question about buying, selling or any other real estate matter? Let me know and I’ll address it in a future article.