Beware when buying 'as is'
The $20,000 mistake
By Barry Stone, Wednesday, March 17, 2010.DEAR BARRY: Before we purchased our home, the sellers hired their own home inspector. We were given a copy of the report and bought the house "as is" because no major problems were disclosed. Two months later, we had a sewage backup. We snaked it out, but two weeks later it happened again, and then again, and then again … Our plumber says the main sewer line has major root damage. A new line is needed, and the repair bid is $5,000. That's problem No. 1.
Problem No. 2 is the large deck and retaining wall in the backyard. The structure is totally rotted, and replacement is estimated at $15,000. Shouldn't these problems have been disclosed by the sellers and their home inspector? --Michael
DEAR MICHAEL: Some disclosures should have come from the sellers, and some from the home inspector. So let's sort through the details.
A home inspector cannot know about internal problems in a sewer line. All an inspector can do is report defects that are apparent at the time of the inspection. If a sewage backup occurs every few weeks or months but is not occurring at the time of the home inspection, the inspector has no way of knowing it.
Liability in this case points toward the seller. If sewage backups happen repeatedly, the seller was probably aware of it and should have disclosed it. Unfortunately, prior knowledge by the seller is not easily proven. Sometimes you can learn details of past problems by asking the neighbors. Sometimes the neighbors can recall which plumbing company visited the property. It's all a matter of detective work, which may or may not lead to proof.
Then we have the deck problem. Rotted wood in decks and retaining walls is usually reported by a pest control operator, commonly known as a termite inspector. But wood rot can also be found by home inspectors who take the time to investigate. If the underside of the deck is accessible for inspection, that definitely helps, but a badly rotted deck usually has apparent damage on exposed wood members.
A major mistake in your transaction was trusting the seller's inspection report, without hiring a home inspector of your own. Regardless of the qualifications of the seller's inspector, it is always best to have someone conduct an inspection specifically on your behalf, assuming that you hire a highly experienced inspector. This should have been recommended by your agent.
At this point, the sewer problem needs to be diagnosed and corrected, once and for all, rather than paying for repeated snaking of the line. Begin by finding a plumbing company that does video inspections of sewer lines. Then the problem can be determined with certainty. If a new line to the street is needed, inquire about installing a synthetic lining in the existing line, rather than excavating the yard and installing a new pipe.
As for the deck and retaining wall, the home inspector should return to the property for a second look and explain why the damage was not disclosed in the inspection report.
To write to Barry Stone, please visit him on the Web at www.housedetective.com.
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Submitted by Hank Bailey on March 17, 2010 - 11:03am.
A few problems with some of the conversation here.
"We were given a copy of the report and bought the house "as is."
"Liability in this case points toward the seller. If sewage backups happen repeatedly, the seller was probably aware of it and should have disclosed it. Unfortunately, prior knowledge by the seller is not easily proven. Sometimes you can learn details of past problems by asking the neighbors."
Okay, while the seller provided a home inspection, there is no mention of a seller's disclosure. If this individual truly bought the home "as-is," you are right that she should have gotten her own home inspection done, and she should have also asked for a seller's disclosure as well. The issue I have with your advice that the issue or liability goes to the seller is that she may have, we don't know, signed documentation at closing and a "contract" stating that she was buying it "as-is" with no warranties. At that point she is out of luck. She agreed to the purchase and with a contract in hand stating "as-is" agreed to by all parties the seller owes her nothing.
Finally in her question to you, "Shouldn't these problems have been disclosed by the sellers and their home inspector?" The answer should be, "a home inspection is NOT A SELLER's DISCLOSURE."
She is unfortunately mistaken, as are you, if she walked into a contract on an as-is purchase and didn't do her homework. Next time get a Buyer's Representative. No, that would cost more money. Hey, wait, her mistakes are costing her money ($20,000 in repairs) though...hmmmmm
One more comment to take you to task on, "Some disclosures should have come from the sellers," Not necessarily. IF the sellers were selling it "as-is" there may not have been any disclosure. This is buyer beware, but in these situations she probably got the property at a discount, or should have.
In sum, don't knock As-Is sales, but if you buy one, don't assume the seller owes you the world either because you probably got a killer out the door price on the purchase. Also, great playing contract expert on this one Barry. With due respect, these questions are more Broker related and not home inspector types of questions. Talk about full disclosure!
Warmest Regards,
Hank Bailey, REALTOR®
ASSOCIATE- BROKER
hankbailey@prudentialgeorgia.com
(c)706-621-1895
(w)706-654-2086
http://www.linkedin.com/in/athensproperties
www.athensgahomesforsale.com
Submitted by Hank Bailey on March 17, 2010 - 11:08am.
One more thing, "As for the deck and retaining wall, the home inspector should return to the property for a second look and explain why the damage was not disclosed in the inspection report."
No, he doesn't have to do this. What part of "As-Is" do you guys not understand. The home inspector was working for the seller, they didn't have to provide the report, the report was not a Seller's Disclosure, and lastly the BUYERS should have gotten their own inspection by their own home inspector.
This was the Buyer's mistake or if they had a Buyer's agent, which it doesn't sound like, then it was their mistake. That is whom you cast the blame on, the Buyer and the Buyer's agent. I forgot however, we in America today have a real hard time in taking any personal blame and responsibility. It is always "the other guys fault."
Warmest Regards,
Hank Bailey, REALTOR®
ASSOCIATE- BROKER
hankbailey@prudentialgeorgia.com
(c)706-621-1895
Submitted by Bob Jenkins on July 18, 2010 - 9:29pm.
i can understand this problem as one of my friend had same type of problem. he had termites in his new house..
I will suggest to follow these before buying..
If you don't do the research, you might be shocked when you do actually move into the property and it is different to your expectations (and your sense of valuations).
If you're not realistic in your budget, you are bound to be over-stretched at some point in the first year of your home loan.
If you fall too far in love with a property, you might be unable to see the serious financial implications of the transaction.
If you let your love for a property cloud your analysis, you might not see what others see and that is going to cost you.
Regards,
Bob Jenkins
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Submitted by Studs Magar on July 19, 2010 - 6:10pm.
I know how difficult it is and how it feels to find out that your home has many defects than you ever have expected . Even had some major plumbing problems when I bought my first home when I immediately called on houston plumbing and got everything fixed going way beyond my planned budget . So , I guess the main factor or the system that needs change is the way or the system of inspection . I guess that is the main reason why home owners have to suffer all because of poor inspection team . That's it ....
Submitted by mike hunter on July 27, 2010 - 11:22pm.
We bought an "as is house" for a reduced price. The seller ended up lying about a septic tank inspection which was required in the contract. The septic system needed $10,000 worth of work which the seller ended up paying. "As is" doesn't get the seller (or their real estate agent) totally off the hook. Many interviews describing similar cases I found by http://www.mp3hunting.com SE show that they are still responsible for contractual obligations and disclosures; they must also follow real estate laws.
Submitted by sam jone on September 23, 2010 - 11:08am.
I think you really make a very good points like when you buy your house then you have to make sure all
the report documents are very clear at the same time
it may happen then the owner is not going to say about any problem which can be serious in the future.
So i think every one of us have to take actions against them if they lied or we can ask them to fix it.
Thanks for sharing such nice informaion
plumbing