As a full-time broker for over twenty years, I have attended nearly a thousand home inspections and have dealt with the attendant negotiations that follow. Trust me: They can occasionally get ugly.
Experience has shown me that more often than not the reason they occasionally get ugly is that either the buyer, the seller or, in some instances both, really don’t understand what the purpose of a home inspection is, or what’s reasonable to expect in terms of repair requests.
Once a property is under contract, the buyer should order their home inspection(s) to be done. If you are working with a good buyer broker, I would ask for them for recommendations for home inspectors. If you purchasing directly from the listing agent I would not consider asking for recommendations. The listing agent has already placed themselves in a questionable position and, in my opinion, has clearly indicated that they are more focused on retaining the entire commission as opposed to representing either the buyer or the seller — both of whom they originally swore to work for. I would be hesitant to trust anyone they recommended.
Not Every Home Inspector Is Equal
The bad thing is that many states have rather lax requirements for becoming a home inspector and, as with most things, experience counts as does a commitment to ongoing continuing education. I will only recommend ASHI (American Society of Home Inspectors) or InterNACHI (International Association of Certified Home Inspectors) to my clients. These professional organizations require their members to pass strict testing requirements as well as ongoing, certified, continuing educational courses. They have codes of ethics that their members agree to abide by and that also gives me more confidence than using an inspector who is not a member of one of these Associations. The report is the property of the Buyer. Typically buyers authorize their inspector to send a copy to their buyer Broker as well so that they can discuss it. If the Buyer is asking the Seller for consideration based on the report, then the report or the pages from the report related to the request should be given to the Sellers and their agent for review at the time the request is made.
What Do Home Inspectors Inspect?
Home inspectors are not hired to point out cosmetic defects; they are there to inspect the roof, basement and/or crawlspace, foundation, HVAC (heating and cooling systems), plumbing, electrical and structural components of the house. This is a non-invasive examination. They may not open up walls for example, and so it’s possible that some issues may not be discovered. Most inspectors will check that your stove, fireplace, dishwashing machine, jetted tub, etc. are all working as intended at the time of the inspection. They will generally not check your washer, dryer, swimming pool, water softener, irrigation system or well and septic. Good inspectors will not comment on what repairs may cost nor will they offer to make the repairs; that is not their job and if they do make an offer you should question their motives.
A good inspection on a 2000 square foot home will typically take between 2-3 hours (sometimes longer) and, when finished, you should receive a detailed report which should include pictures of any issues, as well as a brief written comment on the nature of the problem. It’s common for these reports to be e-mailed out within 24-48 hours of the actual inspection.
If you are buying a property with well and septic you should have a separate inspection of these systems by a qualified professional. You should also have a pest/termite inspection done and, if the heating and cooling systems are eight years or older, I routinely recommend having a qualified HVAC contractor do a separate inspection of these items. Yes, it’s going to cost a little extra money but these are two very expensive components of the home you’re buying and a home inspector is not qualified to take them apart and do an in-depth inspection of the coils, heat exchangers, etc. Remember the average lifespan of an HVAC system is between 8-12 years.
Once all your inspections are done then it is time to discuss the findings with your agent. Remember, unless you are buying a new home the inspection summary is not a punch list. Negotiations start getting ugly quickly when a buyer (and/or their agent) chooses to turn over the summary to the seller requesting everything on the list be fixed.
I think it’s important to consider the price paid. Generally speaking buyers haven’t offered full asking price which is what the seller wanted when he listed it. The buyer should have no expectation that after negotiating the price down, the seller is then going to fix or repair every little item mentioned on the report.
Stay Up To Date With Building Codes & Practices
It’s very common to see No GFCI in the bathroom or space between staircase spindles is greater than 4 on center or other similar issues that fall under the category of "No longer meets code." It’s important to bear in mind that depending on the age of the home these items may not have been required by code and that as long as the home met all applicable codes at the time it was built, then it’s unreasonable to expect a seller to retroactively bring the home up to current code.
Building codes are changed every single year and if you are the type of buyer who wants a house that is current on every code, then you should purchase a brand new home. When you’re buying a used home you have to accept that there may be many things that don’t meet today’s code, and this doesn’t mean that there’s anything wrong with the home. Comments that the roof, HVAC or water heater are “nearing the end of their anticipated life expectancy” are for the buyer’s information. While undoubtedly true, unless the roof is actively leaking or the heating and air conditioning are not functioning as intended, then it’s unreasonable for a buyer to request compensation for these items. The buyer and/or their agent should have noticed this prior to making an offer and should have factored it into their offered price.
Sellers often get extremely distressed even when reasonable requests are made. My advice to sellers has always been, “The Buyer can go away, but the problems will be here for the next buyer to uncover. While you do not have to say anything, I am obligated to disclose these issues now that they have become known. So let’s work towards a satisfactory solution that both you and the buyer can live with.” In today’s market this is particularly true, as buyers have many options and sellers have very few. If the requests are for items that are no longer working as they were intended to, and the contract did not state that the sale was “as-is,” the repairs or compensation should be assumed by the seller. One way to avoid any unpleasant surprises is for Sellers to have their home pre-inspected, make the repairs and then have their listing agent use a copy of the report and the repair receipts as part of their marketing.
When it comes to repairs, my advice is the same to both sides: “If possible let’s talk about money.” Sellers should not want to do repairs as the language on the contract is vague, “ALL REPAIRS MUST BE DONE IN A WORKMAN LIKE MANNER.” Making repairs in essence places the seller in a position where the buyer can simply reject the work done as unsatisfactory. Buyers should hesitate to have sellers do repairs, as most buyers would prefer the work be done well and that any warranty that may accompany the work be in their name. Sellers tend to want to do the work as inexpensively as possible. This is another point where things can get ugly. My preference is to get a few quotes, average them together and then come up with a median price that should be sufficient to cover the cost of the repair. This can, in many instances, be given as a closing cost credit.
As you can tell, inspections are vitally important as are reasonable expectations on both sides. Having a well experienced realtor who can explain what’s reasonable and what may not be, who can bring in tradesmen/contractors to give fair estimates, and most importantly who can help mediate any disputes can often make all the difference between having the sale close or seeing it blow up.
If you're getting ready to sell, contact Larry and the team at My NC Homes. They can help you with every step of the selling process, from pricing to showing and closing. Contact them online at your convenience or give them a call at 919-659-5173.Posted by Larry Tollen on