Thursday, March 28, 2013

Understand the inspection process

The inspection phase of the home buying process is vitally important, often misunderstood and frequently just a tad bit frustrating. Here is a brief primer on this vital topic.
A pre-purchase inspection is crucial because it is your chance as a buyer to uncover hidden defects. While it is true that sellers are required by law to tell you of known problems, the disclosure process is handled pretty-poorly in many cases with sellers not being adequately informed of their legal obligations. In addition, problems can be present in a property without the seller knowing about them.
It is also important to understand what you are getting into when you hire an inspector. If you read the inspection contract used by most inspectors, you will find that it typically defines the scope of the inspection as follows: A pre-purchase home inspection is a visual inspection ofmajor components of a house that can be safely and readily observed to document significant deficiencies that areongoing at the time of the inspection.
A pre-purchase inspection of a home is very much like getting a physical from a doctor. Your family practice doc looks in your eyes and listens to your heart and is on the lookout for anything that is not functioning properly. A home inspector does the same with the major systems of a house – looking at the structure, roof, electrical system, furnace and so forth for telltale signs of underlying problems. If he finds any, he may recommend further evaluation by a specialist.
Some aspects of the home inspection process that are frequently misunderstood:
1.    There is no such thing as “passing” or “failing” an inspection. The inspector just gives you a factual report on the condition of the house.
2.    You can ask the seller to fix defects that are uncovered by the inspection but sellers are not obligated to do anything. A negotiation must occur about which items, if any, will be corrected by the seller and/or if a price concession or some other remedy is available.
3.    Inspections do not provide a warranty or a guarantee on the property. We’ve all heard stories of people who have a heart attack right after a physical where they got a clean bill of health. Likewise, things can be wrong with houses that are not caught by an inspection. However, this is extremely rare.
The frustrating part of the inspection process is that buyer and seller expectations are diametrically opposed and always will be. The seller almost-always wants to do nothing and the buyer almost-always wants everything fixed.
The good news is that there are strategies for dealing with these differing expectations. It begins with a lot more education about the inspection process itself.
Also, there are ways of preparing the initial contract on the property that make it more likely for sellers to agree to your inspection requests when you are a buyer and less likely for buyers to ask for unexpected items when you are selling.
We will discuss in more detail when we work together on your transactions.