If there are problems with the transaction, most will involve the condition of the property. All real property has defects, and some will not be found right away. Can you imagine that some sellers may actually conceal defects?
If you wish to limit your personal and professional liability, heed these words of advice.
Never go through the home with the inspector!
A licensed representative of Buyer’s Best Choice, Inc. must be at all inspections as company policy.
The inspector is the expert, not the agent!
Choosing an inspector to recommend to your clients takes care.
- Verify that in fact the inspector has adequate errors and omissions insurance, is ` licensed, if applicable, and is a member of ASHI® or NACHI™.
- You want to find an inspector who will give an honest opinion is such a way that all major issues are addressed, but who won’t scare the buyer. You DO NOT want an inspector who will gloss over anything.
THIS IS THE ONLY TIME YOUR CLIENT HAS TO GO THROUGH THE HOUSE WITH AN EXPERT. IF IT IS A COUPLE, BOTH PEOPLE SHOULD BE THERE.
THIS IS NOT THE TIME TO MEASURE ROOMS, SHOW MOM AND DAD, BRING ALONG BEST FRIENDS, ETC.
- Besides the home inspection, your buyers might want a Radon Test, Sewer Scope, Well Test, Water Test, Septic Certification (These las 3 are for homes with well and septic systems)
If the home is older, suggest that the clients do a sewer scope to check for broker sewer lines or clogged pipes.
Talk to your clients about Radon. Here is a link to the government website. You should share it with your clients. A Citizen’s Guide to Radon
If they want to do a radon test, make sure they let the inspector know beforehand. The inspector can drop off the testing equipment before the inspection. That way you will have results of everything at the same time.
You must go to the inspection. Open the door, introduce everyone one, then stay out of the way and DO NOT SAY ANYTHING! You do not want to be seen as the home inspector. Do not point out issues, holes, etc. That is the inspector’s job! However, if you think there is an issue that needs to be addressed, talk to the inspector before the appointed time.
I always take a copy of the Seller’s Property Disclosure with me. I encourage the buyers to read through the Disclosure and mark any issues that may be of concern to them. They need to discuss these items with the home inspector.
I also take a Stress Bag for the Inspection. You can find the description in DropBox. Inspections can be really stressful for your clients.
Once you have the inspection report, read it before talking to the buyers. Note the items that you think are important.
Talk to the buyers about their most important points. If their issues are the same as yours, discuss which ones need to be addressed first, and put them in order.
If their issues are different, then you can explain why you feel you way you do about the items. Remember, they are the clients and sometimes they just want what they want.
No matter what the negotiated price, major items such as furnaces, roofs, plumbing, structural, and electrical must be addressed. These are the items that are safety issues. These are the issues that could come back in litigation.
If the buyer’s offer is at full price with no seller concessions, then you should ask for the majority of the items to be taken care of, either fixed by the seller, a licensed contractor, or ask for a monetary consideration so the buyer can fix the items. IN A SELLER’S MARKET DON’T GO OVERBOARD!
If the buyer’s offer is a full price with seller concessions, or if you have negotiated a “good deal” for the buyer, then choose the major items first, then perhaps the buyer would be willing to fix the smaller items.
Negotiating at the inspection phase should not have any affect on the negotiated sales price. The inspection is separate from the offer.
If the sellers are going to give the buyers a monetary credit for any repairs, note on the Inspection Notice that $________ shall be given to buyers as a credit toward their closing costs and prepaid items as evidenced by the Amend/Extend dated _____.
The Amend/Extend should say nothing more than “Sellers shall contribution $_____________ toward buyers’ closing costs and pre-paid items.
Questions about Home Inspectors
What standards do inspectors have?
Not only should home inspectors have experience and be knowledgeable about building techniques and materials, but they should also have some way to document that.
ASHI (American Society of Home Inspectors) requires its members to pass two comprehensive written tests and to perform at least 250 professional fee-paid inspections. After a report review and a minimum of six months as a candidate, they may be granted membership. They must also uphold ASHI-prescribed ethical standards, which helps prevent conflicts of interest and promotes fairness in dealing with consumers.
Are home inspectors licensed?
Some states require licensing of home inspectors. According to ASHI, they are Nevada, New Jersey, North Carolina, Oregon, South Carolina, Texas, and Wisconsin.
What actually do inspectors do?
A home inspector isn’t the municipal or county inspector looking for code violations. The inspector examines the components of a home that are accessible and visible.
Minor or cosmetic flaws should be apparent without the aid of an inspector.
In a typical pre-purchase home inspection, according to ASHI standards, the inspector will look at the heating system, central air-conditioning system, interior plumbing and electrical systems, roof, attic, visible insulation, walls, ceilings, floors, windows and doors, and foundation, basement, and visible structure.
Why can’t buyers and sellers do their own inspection?
Neither sellers nor buyers can stay objective about property in which they have a financial or emotional interest. They need an objective opinion from a trained third party. Inspectors understand a home’s systems and how they function together and why they might fail.
Good home inspectors can provide all parties with an objective assessment.
Can an inspector flunk your house?
No. Because a home inspector is not an appraiser or a code inspector, an inspector can’t fail a house. An inspector will describe the home’s physical condition and indicate what may need major repair or replacement.
Will an inspector kill the deal?
No. The inspector is an educator about the property. The inspector educates the sellers and the buyers about the conditions of a home, with an important aspect being to highlight the positive qualities.
For the sellers, the inspector can help demonstrate your good faith to protect their interests in terms of legal obligations to disclose the home’s condition.
The inspector’s comments or recommendations can help dispel buyers’ worries and offer useful maintenance tips.
When do inspectors get started, how much do they charge, and how long do they take?
Generally, home inspectors get started after the sales contract is signed, provided the contract includes a clause making the final sale contingent on the results of the home inspection. Most inspectors are available on a one- to 14-day notice.
Costs and time vary, depending on the location, size, age, and any special features of the home.
Do home inspectors view all kinds of properties, like condos, town homes, and new homes?
Yes. The home inspector knows how to treat these kinds of properties, which sometimes have unique requirements.
In multifamily dwellings, for example, each individual unit, no matter how small, is part of the bigger whole, the homeowners association. Inspectors know that big costs to the association could result in big assessments to the unit owners.
As for new homes, inspectors go beyond the visit by the typical building inspector, whose visit may take only 20 to 40 minutes to ensure the home warrants a certificate of occupancy. A home inspector’s scrutiny could take two to three hours.
How do I find an inspector?
Your best recommendation can come from your Realtor, or a friend. You can get a list of ASHI members in your area by calling the ASHI fax-on-demand number, 800/743-2744, or by visiting (DropBox Resources has names of inspectors.)
Agents, this could happen to you if you point out defects during the inspection!
Think of how you would answer these questions on cross examination:
Clerk of the Court:“Do you swear to tell the truth, the whole truth and nothing but the truth?”
REALTOR®: “Yes, I do.”
Attorney: “Do you care about your buyer?”
REALTOR®: “Yes, I do.”
Attorney: “If you saw something during the inspection that the buyer missed, would you point it out to them, or keep quiet?”
REALTOR®: “I would point it out, of course.”
Attorney: “I admire you for that. I knew you would. Now, what if you saw something that the inspector missed?. Would you point that out to your buyer, or keep it to yourself?”
REALTOR®: “I would point it out, of course!”
Attorney: “So, ladies and gentlemen of the jury, I think that you can see that the buyers, my clients, were justified in relying on the REALTOR®. Not only was he inspecting the property, but he was supervising the buyer and the inspector.”
Oliver E. Frascona, Esq. represented the REALTOR®, and settlement was fast. The issue is not that the REALTOR® is dishonest, or will not tell the truth. In fact, the reverse is true, and that very fact will pose real problems as the opposing attorney tries to hang you. Remember, in most states the inspector’s liability is limited by contract.
The REALTOR® is present in the litigation as the player with the deep pockets.