8 Rules to Help Guide Buyers
Through the Home Inspection Process
Because buying a home is probably the biggest investment you’ll ever make, you should take every precaution to ensure you know as much as possible about your new home before completing your purchase. A home inspection can save you thousands of dollars in future repairs. At the very least, if no major defects are found, the inspection report will give you piece of mind in knowing the exact state of your new house and what you might reasonably expect after taking possession. There are a few rules you should follow as you enter into the home inspection process
Before the Inspection
RULE #1 -- Buyers should choose their own inspector—preferably one that a co-worker, friend or neighbor recommends.
At all costs, buyers should avoid referrals from the listing agent. The listing agent represents the interest of the sellers---not the buyers. The listing agent simply cannot represent both sides during the sale of a home. Buyers and sellers are out for the best possible deal for themselves and at some point if negotiations for repairs come up, you will want the best possible representation for your side. That means it is in your best interest to choose your inspector wisely on the front end of the inspection process.
RULE #2 -- Your inspector should be a member of http://www.creia.org
By definition, a home inspection is a visual examination of the physical structure and major interior systems of a residential building. An inspection is not a substitute for an appraisal or a building code inspection.
During an inspection, the inspector will review the readily accessible, exposed portions of the home, including the attic, walls, ceilings, floors, windows, doors, basement and exterior of the home. The inspection will also look at the foundation, heating/air conditioning systems, interior plumbing and electrical systems and appliances for potential defects. Although small blemishes or cosmetic flaws may be apparent to the untrained eye, a thorough inspection should point out every minor defect.
In California, a standard purchase contract will outline time limits and what inspections are to be performed. A standard California purchase contract has a contingency clause making the sale final based on the results of professional home inspections you choose to perform. The contingency periods typically expires in17 days -- from acceptance of the final offer.
RULE #3 -- The standard home inspection does not provide a warranty or guaranty for the following:
Roof Soil or Geological Conditions
Earthquake Hazards
Invisible or Latent Defect Termite Damage
The Insides of the Walls
Cracking and Settling Covered by Wall Coverings
These are separate inspections that incur separate costs. Inspections and certifications should be performed by a specialist in those fields. California inspections are initiated AFTER the buyer and seller agree on price and length of escrow. Avoid the risk of losing your purchase deposit by making sure the home inspection is completed within the contingency period in your contract.
During the Inspection
RULE #4 – The buyers should be physically present during the home inspection.
These are separate inspections that incur separate costs. Inspections and certifications should be performed by a specialist in those fields. California inspections are initiated AFTER the buyer and seller agree on price and length of escrow. Avoid the risk of losing your purchase deposit by making sure the home inspection is completed within the contingency period in your contract.
RULE #5 -- Take time to review, in detail, every item listed on the report.
Ask questions of the inspector about the condition of each item listed on the report. This is important because items you intend to replace or remodel can be absorbed in your negotiations with the sellers, and you can’t position yourself as favorably as possible if you don’t do your homework and arm yourself with as much information as possible. Defects that affect the “livability” - such as a leaky roof, health and safety or building code violations - are what buyers should demand to be repaired or to be credited the amount money for repairs in closing costs.
RULE #6 -- Home buyers are well advised to require code violations be repaired or replaced by the close of escrow or final walk-thru.
The inspection report will point out the building code violations. For example, it’s a code violation if a gate leading to a pool or spa does not have a self closing and locking gate. Your agent should be prepared to be the “bad guy” and fight for your demands. It is important to note that if the agents belong to the same office, it is too easy for both agents to collaborate and under represent the buyer. This is because buyers are traditionally less sophisticated and not represented as well as the seller.
After the Inspection
RULE #7 – Get written estimates for repairs listed in the report.
All defects in the report requiring repairs must be made in writing. The request should clearly state what the nature of the defect(s) is(are) and the solution you require before you close escrow.
Adjust a final sales price by negotiating a “credit” for the projected costs of any repairs.
Rather than write up an entire new purchase offer, simply have an addendum that credits the buyer for the amount of the repair costs. The addendum should offer the sellers an option to make repairs themselves or to offer a “buyers credit” to cover the costs of repairs or replacements.
RULE #8 -- Do not use any previous home inspections as a basis for the home sale or negotiations.
Although this may seem convenient and reasonably accurate, the acceptance of a previous inspection relieves much of the liability for disclosure on the home sellers and their agent.
Copywrited Daniel Dobbs, Broker April 2007
