As a buyer, one of the smartest things you can do is get a home inspection. It’s arguably more important than getting an appraisal, because a proper inspection will prevent you from buying a money pit – at least not intentionally.
A good home inspection will identify both major and minor problems in the physical condition of the home. For example, the inspector can identify issues such as structural problems, (termite damage), mechanical problems (heating and air conditioning) or construction defects.
The home inspection report will identify the problem areas, explaining what needs to be either repaired or replaced, and it will give you an estimate of the expected lifetime remaining on the major systems in the home.
A home inspector will begin with a review of the home as a whole and then break it into sections, checking each area carefully looking for signs of wear and tear which is above the expected, normal wear and tear.
As a buyer, it may be very tempting to require the seller to do all of the repairs on the home before you buy it, however there are no hard and fast rules about who should pay for repairs in a home sale.
One rule of thumb suggests that anything which will require you to hire a professional, have the seller pay for the costs, either as a reduction in the sales price or before the sale takes place. It’s up to you as a buyer, but if there’s a long list of items which you need and/or want to do which can be done easily enough by yourself, don’t bother asking the seller to do the repairs. Wait until you’ve bought the home and do the repairs yourself.
Showing the sellers a huge list of things you want fixed may cause them to balk at the request and the sale could fall through, leaving you with the tedious task of continuing your home search, on top of the cost for the inspection you just paid for.
Obtaining a home inspection from a qualified home inspector is not a guarantee that nothing will go wrong. In fact, one thing that catches many first time home buyers by surprise is just how much more it does cost to be a homeowner – after all, you don’t have a landlord or “super” to call when your sink springs a leak – you are the “super!”
We’d all like to buy the perfect home. Unfortunately, it doesn’t exist. Even new homes have defects. That’s why it’s important to have any home you buy inspected by qualified professionals-even if it’s brand new.
You’ll undoubtedly discover defects during your inspections. In fact, you should hope that any significant defects are uncovered before you remove your inspection contingency from the purchase contract. It’s far worse to be surprised after closing by unanticipated repair expenses.
Armed with a complete assessment of the current condition of the property, you can make an informed decision about whether to purchase the property in its present condition. Or, you may want to renegotiate the terms of your contract with the seller. If defects are incurable, you may want to withdraw from the contract altogether.
Your purchase contract should set guidelines for how inspection defects are to be handled. For example, the seller may have had a “termite” inspection completed before marketing the property. If so, the contract might specify which party-buyer or seller-will pay for the required corrective work.
Not all inspection contingencies are the same. Some specify that the buyers have the unilateral right to approve or disapprove inspections. In this case, if the buyers disapprove the inspections, the contract may be cancelable at the buyer’s option.
House Hunting Tip: Even if your contract allows you to withdraw due to inspections, carefully consider before electing this option. You will already have spent considerable time, effort and money finding and inspecting the property. If the defects are correctable, it’s usually worthwhile to try negotiating an agreement with the sellers rather than starting the process over again.
Some inspection contingencies provide for buyers to give the sellers the opportunity to correct defects, rather than just walk away from the deal. In this case, the terms of the contract often become subject to further negotiation.
Before asking a seller for inspection-related concessions, make a list of the significant defects you discovered during your inspections. Then find out how much it will cost to repair these defects. When you make your request, put it in writing and include a copy of your cost accounting list along with the reports and estimates on which you’re basing your request.
You may find the seller is not willing to negotiating over items that were disclosed to you before you made an offer to purchase the property. It still may be worthwhile to point out the cost of the previously disclosed items in addition to the newly discovered defects which alter the amount you can reasonably pay for the property.
Sellers are wise to consider any reasonable proposal from a well-qualified buyer. If the inspection-related defects are significant, they are likely to be a concern to other buyers. Depending on the law in your state regarding seller disclosures, you may have to provide copies of the buyer’s reports to future buyers who are interested in the property.
There are several ways in which sellers can participate in buyers’ repair requests. They can have the work done by closing, if time permits. Often contractors will accept payment at closing.
Or they can credit money to buyers as long as the credit is called a credit for buyers’ nonrecurring closing costs. Lenders usually limit the amount of such a credit to 3 percent of the purchase price or equal to the actual amount of the non-recurring closing costs, whichever is less.
The Closing: Some lenders will allow money from the seller to be held in an escrow or trust account so work can be completed after closing.
An issue of Consumer Reports® has a relevant investigation of defects in homes. Importantly, the article gives excellent advice regarding how home buyers can take steps to avoid trouble.
The Consumer Reports® article states “Be proactive. Consumers should never buy a house without first hiring a real-estate attorney and a home-inspection engineer.”
It is important for home buyers to understand that the credentials of home inspectors vary widely, some are licensed engineers, some are non-engineers, some claim to be professional home inspectors, some claim to be certified, some claim membership in a home inspector group. Some certifications can be obtained by almost anybody, a high school diploma is not a requirement and certifications can even be obtained by joining a trade group.
The Consumer Reports® article states “Hire a qualified home inspector. Preferably, the inspector should be an engineer or architect.”
If you have questions about why you should hire a qualified home inspector, contact us. We’ll provide you with complete details.
Inadequate insulation means that 10 to 50 percent of energy is lost through walls, ceilings and floors. Proper insulation helps lower energy bills by resisting heat loss. Where the interior of walls and ceilings is easily accessible, adding additional insulation can be a relatively inexpensive way to get a big return on energy savings.
The first place to look for missing insulation is in the attic. Attics, in general, are fairly accessible, but in many homes, even newer homes, insulation is often times inadequate. As part of a general home inspection, the inspector will examine the type of insulation present and its approximate thickness or “R-value.”
The inspector will also examine (if the attic is accessible) the attic interior, including: roofing, framing, sheathing, insulation, ventilation and chimneys. Any visible signs of moisture intrusion will be noted. The attic is a key element in the home’s ventilation system. Moist air from inside the home must be properly vented to the outside in order to protect roofing materials and prevent the growth of mold and mildew.
The inspector will also look for areas of safety concerns to ensure proper rating and installation of canned or recessed lighting in order to prevent overheating and possible fires.
In most cases, home inspectors will allow you to accompany him or her during an inspection. We, in fact, encourage this practice.
Having a home or building inspection performed is, quite commonly, one of the crucial steps in purchasing a property. Buyers and developers want to make sure they are not going to end up buying a property that may have structural problems or which needs costly repairs or updates. This is especially true if they are looking for development opportunities that will allow them to make a fairly quick profit.
If you are planning on demolishing an existing structure and performing a complete rebuild, you do not need to worry as much about structural issues. The same is true of parcels of land which are currently undeveloped. That does not mean there will not be some sort of surveying or inspection carried out in these cases, it is just that the condition of the building itself is not as much of an issue.
There are many companies that offer home or building inspection services. Some are quite competent and you can trust them to give you an unbiased and clear view of what exactly may be wrong with a property that seems to be in good condition. Other companies and individuals may not be as trustworthy. Horror stories abound of individuals who trusted their home inspector and found out too late they should have avoided a particular property.
Ask Questions Before Hiring an Inspector
It is important that you speak with an inspector prior to hiring them. If you are able to meet with them before the home inspection in order to feel them out this may help you choose one who is more honest about what is going on behind the walls of a home or other building. If you are meeting them for the first time at the property for the inspection itself it is too late for you to choose another provider without the real estate deal potentially falling through.
Find out how long they have been working in the home or building inspection industry. Find out how long their inspections usually take and whether they know how to perform specialized tests such as radon testing. You need to find out whether they can identify known toxins and carcinogens in the building in question such as the presence of asbestos tile.
Find out what they did before they became a home inspector. Did they have experience working in the construction or contracting industries? If so, why did they change trades? You may be able to weed out individuals who have a lack of industry knowledge before they come to inspect your home.
Make Sure They Have Experience With Your Type of Building
It is important for you to ensure that the inspector you are using has experience looking at the kind of building you are thinking of buying. A commercial building, for example, will likely have different issues than a home or other type of residential building would have.
What to Expect From the Inspection
You should expect your home or building inspector will take a substantial amount of time going over a property. A large property should take more time to inspect than a smaller one. Make sure they look at the roof, the foundation and areas such as insulation. You want to make sure they note any structural issues or defects in the building.
A good inspector will furnish you with a report covering all of the issues they noticed. If you are new to the world of property development, getting estimates for having work done can also be helpful. You want to make sure you can also get a copy of the report for the individuals who are financing your purchase as well.