May 14, 2019 | by Reuven ShechterHOME BUYING
HOME INSPECTIONS & NEGOTIATIONS
At A GlanceIf you’re buying a home, it’s always best to get the home inspected before you close the deal. While the inspection will probably reveal more than a few defects, it doesn’t mean its an immediate deal-breaker. Here’s how inspections work and next steps on how to move forward after you have one.
In almost every situation, it is advised that anyone buying a home first request a whole home inspection prior to closing. It’s important to understand what is — and isn’t — included in a home inspection and your options for moving forward if — or more likely, when — defects are found.
Why get a home inspection?Learn why you should get an inspection and use a Clever Partner Agent.
How Home Inspections WorkWhen you decide to have the home you’re buying inspected, you get to choose which company you use. If you don’t have a reliable one in mind, your real estate agent likely has a company they use frequently and would recommend. As the buyer, you pay for the inspection and are able to (and encouraged to) attend the inspection in person.
The standard inspection evaluates the condition of the homes heating and air systems, interior plumbing and electrical, roof, walls, ceilings, floors, windows, doors, foundation, and structure. Plus, you may want to (or be required to) get additional inspections for things like pests, or radon. The report provided to you after the inspection should include detailed descriptions and photos of any defects.
Fixes You Can Make YourselfIt is rare that a home inspector finds absolutely nothing wrong with the house. In fact, if this is the case, you may question the thoroughness of the inspector. Finding some problems doesn’t automatically mean you shouldn’t buy the house, only that you may need to be address the defects down the road.
If you’re planning on remodeling a bathroom or kitchen shortly after purchasing the home anyway, don’t ask the seller to make any repairs in those locations unless they’re major electrical or plumbing defects.
Here are some fixes typically handled by the seller after move-in:
While you can request that the seller make repairs following an inspection, it’s important to pick your battles and the seller can always say no. These asks should mainly be reserved for major structural or mechanical defects. Rely heavily on the expertise of your real estate agent when deciding which repairs to ask a seller to make.
Common defects that a seller may fix include significant plumbing problems, a leaking roof, elevated radon levels, unsafe electrical defects, mold issues, and drainage or water problems. You may also ask the seller to hire an exterminator to handle a wildlife or termite infestation. Since these are usually issues you would want resolved before moving into the home, it would be typical for a seller to foot the bill to have these issues fixed prior to closing, instead of knocking money off the selling price.
When To Negotiate for MoneyIn certain instances, you may ask for cash-back credit at closing, meaning the seller provides money you can use to complete the project yourself. The seller may also offer to lower the purchase price. These options are similar in that you’re essentially paying the same amount for the home, but they may have different implications for your mortgage.
You may ask for cash-back or a lower selling price if you think the seller’s hired contractor might perform shoddy repairs, or you or the seller wants to expedite closing. If a problem is major, but doesn’t necessarily need fixed immediately, this may also be a time to ask for a discount of the asking price.
When To WalkMost any defect found in a home can be fixed — but it may come at a steep price. If you find a major problem like a foundation issue and the seller refuses to make the repair, it may be time to walk away from the deal. Additionally, just because the issues gets repaired doesn’t mean it won’t rear its ugly head again, and you’ll have to fix it at your own expense.
Problems Not Found During An InspectionWhile an inspector will do his or her best to thoroughly inspect the property for defects they are trained to spot, they pay not catch everything. Plus, they aren’t experts on everything. For example, they may check to see that an air conditioning unit is functional, but without a thorough examination by an HVAC specialist, there’s no way to guess whether or not it will likely still be working when you move in.
Leaks and some structural problems can also be easy to miss on an inspection. While an inspector is trained to look for telltale signs of a leak, if their inspection took place after a dry season, there may be very few signs.
Employ the ExpertsIf you’re looking to buy a home, connect with an experienced, local agent for guidance and support throughout the process. They know what homes are worth and can ensure you get the home for the best price possible, with the needed repairs. They also know the ins and outs of the inspection process and can help you determine when to make repairs yourself, how much you can ask of the seller, and when to walk away.
Clever Partner Agents are also able to offer on-demand showings — sometimes in less than an hour — so you know you won’t miss out on a good flip deal. Plus, you’re eligible for a $1,000 buyer’s rebate on any home you purchase for more than $150,000.
6 Home Inspection Tips for Buyers That Sellers Can Learn From, Too
by Valerie Kalfrin
Posted on March 28, 2019
home inspection sets both buyers and sellers on edge. It may feel like the buyer has the upper hand, but everyone involved is eager for this part of the sale to go well and understand its value in the process.
In fact, 90% of homeowners believe that home inspections aren’t a luxury but a necessity, according to a poll from the American Society of Home Inspectors (ASHI).
Realizing that each side ultimately wants the same thing—and that you can work together toward closing a deal—should set all parties more at ease. Start with these 6 home inspection tips for buyers that offer hidden lessons for sellers, too.
Source: (Kristine Isabedra/ Death to the Stock Photo)Tip #1: Make the inspection official by writing it in as a contract contingency.It’s not enough to tell the seller of a house verbally that you plan to get the house inspected before closing. You’ll need to work with your agent to make sure it’s written into the contract as a contingency clause, which “defines a condition or action that must be met for a real estate contract to become binding,” according to Investopedia.
The inspection contingency clause in particular allows a buyer to stipulate that they have a certain amount of time (typically 10-14 days) to inspect the property after both parties sign the purchase offer. This gives the buyer the chance to back out of the deal and get their earnest money back if they can’t come to an agreement on repair negotiations.
In the event that you’re buying the house from a friend or relative—or trying to compete in a hot market with fierce buyer competition—you might be tempted to waive the inspection.
Bad idea—says Frank Lesh, who also has inspected houses since 1989 and is the executive director ASHI. “Unfortunately, that could be a serious mistake,” he said.
Even if a seller isn’t deliberately hiding something, some maintenance issues aren’t apparent to an untrained eye.
Jesus Cardenas, a top-selling agent in Pembroke Pines, Florida, echoes that inspections are always part of the contract in the West Broward County area, where he works. “All properties are sold as is with the right to inspect within the first 10 days,” he said.
What that means for sellers:95% of purchased homes go through an inspection before closing so there’s very little chance that you’ll wiggle out of this step. The only exception may be in a white-hot market where buyers are clamoring to compete, giving you all the power to sell “as is” for market value (but it’s rare).
Because the inspection is written in as a contingency, you should know your options when it comes to repair negotiations: agree to fix the issue, offer a credit to the buyer at closing, or refuse to take action with the risk that the buyer could walk away with their earnest money.
The upside of a home inspection is that it puts everything out in the open. Both sides know what a property’s problems are and can negotiate with all facts on the table. For more tips on what’s the right call in varying negotiation scenarios, check out HomeLight’s guide: “Fix it or Fight It?” which is all about how to handle repair requests before closing.
Many agents will suggest a pre-listing home inspection to either tackle maintenance issues early or give buyers a heads-up about certain issues, creating transparency. Cardenas, for instance, incorporates an inspection into his pre-listing routine because his area has a lot of 1990s homes with Spanish-tile roofs near the end of their life expectancy.
One such inspection found that a client’s roof had perhaps one or two years’ life left. Cardenas knew a roofing company that his client hired to perform about $6,000 worth of repairs, plus provide certification of another year on the life of the roof. “The seller was a nervous wreck, but you know what? The inspection went through completely fine,” he said. “We sold the place to the first buyer.”
He’d rather know of any problems upfront than have the buyer’s inspector unearth a surprise maintenance issue.
Tip #2: Temper your expectations for a perfect inspection.Although a home inspection report is detailed, it doesn’t cover every nook, creak, and cranny.
“One expectation that first-time buyers have is that the inspector is going to find everything wrong with the house—and that’s not the case. We’re there as a guest of the owner, so we’re limited in our ability to inspect things,” Lesh said.
“We can’t tear behind the wall to see if there’s a leak behind the bathroom faucet or the bathtub. We can’t take things apart to see why the dishwasher is making a funny sound. Other than removing the electrical panel, we don’t move furniture or appliances.”
So if there’s a sectional sofa in front of the living room windows, for example, the inspector may not be able to reach all the windows to test if one sticks.
What that means for sellers:The inspection report assesses a home’s condition. It’s not a report card on how good a homeowner you’ve been or a “pass or fail” test. You may be used to your home and its quirks, but a buyer isn’t, so try not to take anything in the report personally—and remember, minor things will always crop up.
“Listen, you’re buying a 30-year-old home … even a ten-year-old home or brand-new construction, you’re going to have issues. Every house has an issue,” Cardenas said.
Trust your agent to help weed through what’s minor and what’s a potential deal-breaker.
Source: (Monkey Business Images/ Shutterstock)Tip #3: Be prepared to attend the inspection and ask lots of questions.When buyers pay for the home inspection, it’s fairly standard for them to watch the inspector at work. “The first thing I always do is I ask what their concerns are. Maybe they had an issue with a previous house, so they’re sensitive to that,” Lesh said.
Although he also explains that he needs elbow room—he might go into and out of the house several times, crouch down to examine something, and make sudden stops—he’s glad to answer any questions the buyer has.
“You’ll still get a report, but it’s easier to understand a problem when I can explain it to you, and you see what the issue is,” Lesh said.
What that means for sellers:Although buyers need this opportunity, a seller already knows the home—and more often than not can get in the way.
Lesh and Cardenas both have had experiences with buyers clashing with sellers who became defensive or emotional during the inspection.
Let your agent supervise the inspection and tell you what the inspector found. (If you’ve had a pre-listing inspection or a maintenance inspection done recently, you’ll already know what’s in store.)
Tip #4: Know when to ask for a repair, take a credit, or leave it be.The home inspection can trigger some delicate negotiations over a property’s flaws. For each, a buyer can request that the seller hire a contractor to fix it, obtain a credit (a reduction in the purchase price) toward fixing it themselves, or let it be. Sellers can opt for either or simply reject both and negotiate from there, although that puts the transaction at risk of the buyer walking away.
Sellers should repair major structural issues or safety problems, such as a dated roof or any requirements for a government-backed mortgage like an FHA loan, or offer credit if they don’t have the funds. Cosmetic imperfections, such as chipped paint or peeling wallpaper, can be left to the buyers to handle once they purchase the property.
“Most of the time, a seller will say, ‘No, I’m not going to give you a credit because the door doesn’t close properly,” Cardenas said.
What that means for sellers:If your electrical system, appliances, or water heater are older, talk to your agent about offering a service contract to sweeten the deal. Cardenas said these cost about $300 a year and reassure sellers that any repairs that might arise after closing will be covered. “That takes away a lot of problems,” he said.
Tip #5: Request documentation to prove completed repairs.While not essential, this can help verify any amenities the seller’s advertising, such as a new roof. “If the receipts are out, I’ll look at them,” Lesh said. “I think it’s a good thing for a seller to do if they actually did have work done.”
What that means for sellers:You might already have your receipts handy for a home appraiser, so it doesn’t hurt to let a home inspector view them, too, as well as your agent. “If the buyer asked for the documents about the repairs, and it was recently [done], then it’s better to give them to me,” Cardenas said.
Source: (Fevziie/ Shutterstock)Tip #6: Now’s your chance to get specialty inspections, too.Although home inspectors are trained and certified to assess several parts of a home, they also can specialize in what are called “ancillary inspections,” or more detailed reviews focusing on individual components.
If they don’t have the right expertise themselves, general inspectors might refer the buyer to specialty inspectors who can more accurately assess components such as the home’s foundation or signs of termites. These types of specialty inspections are an additional fee.
Depending on where you live, radon inspections are a common one for home buyers to get, Lesh said. This colorless, odorless gas is the second leading cause of lung cancer in the United States, according to the Environmental Protection Agency. Radon comes from the natural breakdown of uranium in rock, soil, and water, so any home can have a radon problem, the EPA says. However, people tend to think of radon testing more readily in homes that use well water or that have basements.
Other specialty inspections include termite or pest inspections, swimming pool inspections, and well or sewer scans, where they insert a special camera into the sewer line underground to make sure the pipe is functional.
If your home is older than 10-15 years, an electrical inspection can point out any repairs needed to bring the property up to code, such as replacing the electrical panel and any outdated wiring and receptacles.
What that means for sellers:Be prepared for your home to be scrutinized and have patience throughout the various inspections—but do keep tabs on the deadlines of the contract and when the buyer is supposed to have each appointment scheduled by.
Article Image Source: (Milly Eaton/ Pexels)
Process by Gary Smith
Are you preparing to purchase a home? You’ll want to have it seen by a professional. New homes too!
Here are 7 truths about the home inspection process that will leave you with sound advice – trust me – my reputation is built on offering sound advise.
Inspectors are only as good as the last man (or woman) in. AKA – “The home inspector should have caught that”.
Sometimes it won’t matter how much experience the inspector has or how many credentials hang on the office wall. The moment you hire someone to work on your home you’ll be told that the issue you’ve hired them to repair is/was preexisting and that the home inspector should-a, would-a, could-a.
Truth: Most repairmen don’t respect home inspector opinions.
What you see is not always what you get. Most sellers want you to know that they’re proud of their home. Pride of homeownership is one of the keys to living the American dream. However, by the time an inspector sees the property the cracks have been caulked, the roof has been patched and the cooling system will freeze you out of the house! After you’ve purchased your home, be prepared. At some point along the way, you’ll find cracks, your roof could begin leaking and the A/C system will need servicing. That’s one of the realities of homeownership and home inspectors can’t prevent it.
Truth: An inspection does not mean you may forego home maintenance.
They have a license to steal. You’ve heard it before – “Gosh, they’ve got a license to steal”! You’ll most likely have that feeling after you’ve been “sold” a line of smoke and mirror tactics that have “little-to-nothing” to do with investigating and/or rendering an opinion about the conditions of your property. A prime example is a home inspection service who offers a 90 Day Warranty. This product is usually prefaced by claims that you’ll be 100%, 110% or even 200% satisfied with the inspection service. Read the details. Most 90 day warranties begin the day of the inspection, often have hidden deductibles and, as coverage begins, you don’t own the home yet. In some cases it can take 30 to 60 days before you take possession. Do the math.
Truth: Don’t be duped by flash and dash – if it’s too good to be true, it most likely is.
There is no a crystal ball. If you speak with an inspector who tells you, without hesitancy, that the roof won’t leak, the walls won’t crack, the drain won’t clog, etc. etc., you should be concerned. Home inspectors can’t predict outcomes and you’ll reinforce the opinion they have a license to steal (see above).
Truth: Inspectors can’t predict the future.
You came recommended. Who says? Inspector recommendations are a hot topic within the real estate industry and have been written and talked about for years.
#1) It’s not wise to hire your inspector based on price.
#2) Be very careful hiring the inspector as a real estate agent’s recommendation.
Most agents have been legally advised to offer you three or more inspector names/companies. They don’t offer three or more pest control companies, they don’t offer three or more alarm companies, or attorneys or/and a host of other professionals.
An inspector is hired to evaluate the home’s conditions and his findings can seriously alter the outcome of a purchase. Most home purchase contracts include certain contractual contingencies. An example would be that you must financially qualify for the home. Another common condition, called the home inspection contingency, states that you are satisfied with the physical condition of the home at the time of the contract. The buyer will be required to address this contingency before the contract is legally binding.
Truth: This is a huge purchase – don’t cut corners, interview the inspector and hire a trusted professional.
Out of sight, out of mind. There is no possible way (unless the inspector has a habit of jumping into phone booths and flying with a cape) that your inspector will have x-ray vision. If the seller (or the home he/she lives in) has limited the physical access to rooms, the attic, the crawl space or/and other areas of the home it will be impossible to render an opinion. Look for comments in the report that reflect limited or no access. If you don’t see these notes – well, what else has been left out of the report?
Truth: It’s wise to ask plenty of questions about the house.
You did read the entire report, right? Once the inspector is finished, it would not be wise to just flip to the summary and “hit the high spots”. Read the entire report. All of it. Often there’s value in the body of the report. Look for notes on maintenance, care and safety information.
You paid for a comprehensive report – if you don’t get one, well…you should have gotten one.
Truth: It’s wise to ask plenty of questions about the report.
The Take Away :: Look for an experienced home inspector who has plenty of testimonials and a reputation of offering sound advice. Interview the inspector – check with past clients and don’t hire based on inappropriate ethics, discounted services and gimmicks. When the smoke clears – you could regret your choice…and that’s the truth!
Buy NowUnderstanding the home inspection process can help buyers during an exciting yet potentially nerve-wracking time in their lives.
Home inspections are a vital part of the home buying process. Such inspections can protect buyers as they’re on the cusp of making what will likely be the most significant investment of their lives. Understanding the home inspection process can help buyers during an exciting yet potentially nerve-wracking time in their lives.
The American Society of Home Inspectors defines a home inspection as an objective visual examination of the physical structure and systems of a house. Inspectors will conduct visual examinations from the roof to the foundation of the home. Additional structures on the property, such as sheds or detached outdoor living areas, are not typically included in the examination.
The ASHI notes that inspectors will examine the condition of various parts of the home. The heating system, central air conditioning unit, interior plumbing and electrical systems, roof (though inspectors will not climb onto the roof), attic and insulation will be examined. Inspectors also will examine walls, ceilings, floors, windows, doors, the foundation of the home, basement (or crawl space), and structural components.
Homes cannot fail home inspections, which are just assessments of a home’s existing condition. Municipal inspections are separate inspections conducted by government agencies to verify that a property is in compliance with local codes. Home inspectors will provide detailed reports describing the condition of a home and indicate if any repairs are in order.
A home inspection is a vital component that can help buyers make the most informed decision possible. Forgoing an inspection can leave buyers vulnerable to potentially costly repairs and issues with a home that might have been detected with a proper home inspection. In addition, some lenders insist that buyers have home inspections conducted before they will allow them to borrow money.
Home inspections can protect home buyers as they prepare to make the most significant financial investment of their lives. More information about inspections can be found at www.homeinspector.org.