Home sellers increasingly are ordering pre-sale home inspections to make reports available for buyers to review before they make an offer. By doing so, they hope to avoid renegotiations that can occur if the buyer’s inspections reveal defects that weren’t disclosed to them before they made an offer.
Knowledge is power. However, many buyers wonder if it’s wise to rely on reports that were ordered by the sellers. The answer depends on the reliability of the inspectors, how recently the inspections were done and the completeness of the reports.
Some inspectors take a more critical look at a property when they inspect for a buyer than they do when they inspect for a seller. However, if the inspector is reputable, it shouldn’t make a difference who hired him.
HOUSE HUNTING TIP: Ask your real estate agent for a candid opinion of an inspector’s reliability. If some of your agent’s past clients used the inspector, ask for permission to call them for a recommendation. Call the inspector and ask for references. And check with friends who bought recently to see if they know the inspector, and if they would use him again.
Beware of inspectors who are unknown to the local real estate community. Out-of-area inspectors may not be aware of local problems, such as slide areas, that could have a future impact on the property.
Home inspections often recommend further inspections by other professionals, such as roofers, plumbers, electricians, drainage contractors or engineers. Few sellers complete all recommended further inspections before they market their homes.
It’s hard to tell from a written report whether a further inspection recommendation is in response to something questionable that the inspector discovered, or whether it’s simply an attempt by the inspector to limit his liability.
Before you rely on a report, have a conversation with the inspector to find out if there are issues of serious concern that need further investigation. Inspectors will often be candid in a verbal conversation, but will attempt to minimize their liability with disclaimers in the written report.
Also be aware that many home inspection reports include a statement that the report can’t be relied on by other parties. This could mean the buyers if the report was ordered by the sellers. If you’re concerned about this issue, talk directly to the inspector or consult with a knowledgeable real estate attorney to determine the extent of the inspector’s liability to you for overlooked defects.
It’s usually advisable to include an inspection contingency in your purchase offer, even if the sellers have provided pre-sale inspection reports. But in competitive markets, where overbidding is the norm, many buyers choose to rely on the sellers reports and forego an inspection contingency.
This may not be risky if the sellers have provided current and complete reports from reputable inspectors and the buyers have a wealth of home owning experience. Experienced homeowners have an advantage because they can often assess how much it will cost to repair defects even if the sellers don’t provide estimates.
Buyers who don’t fall in to this category should include an inspection contingency in their offer. There’s a strategy that could improve your chances even if you end up competing with buyers who choose to waive their right to an inspection contingency. You can include an inspection contingency in your purchase offer, but also include a provision that you will pay up to a certain amount to correct defects that are uncovered that were previously unknown.
THE CLOSING: This way the seller knows that you are a sincere buyer who won’t back out due to minor defects that might be uncovered during your inspections.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.
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