Q: My wife and I were house hunting for months, and finally found a place we liked. Amazingly, since we had been outbid so many times before, we were able to get into contract on it. We had all the normal inspections in our area — termite, home inspection and a roof inspection — and they did find some things that needed to be worked on, but there were also some really great upgrades and improvements that checked out OK.

Right before we were going to remove our inspection contingency, I asked my friend, who is a contractor, to come out and inspect the house, too. He didn’t even walk inside — he said he didn’t like the way some of the things he could see on the home’s exterior were done, and that the inside work was probably "no good" either.

He said he wouldn’t pay anymore than $200,000 for it — and we were in contract at over $250,000! I immediately called our real estate agent and canceled the purchase. Now, months later, we still have no house, and we can see the tax credit about to pass us by. I still think about that house all the time and wonder if it was the one that got away.

A: Well, the fact that the tax credit deadline is looming is really of no significance, except that it might have been the spark to your regret. It’s a great incentive to be out looking, but certainly not enough to warrant buying a home you wouldn’t otherwise.

I have worked first-hand with more than one set of clients through fact patterns extremely similar to yours. So, I have lots of thoughts about how you can meaningfully reflect on, analyze and gain lessons from your experience.

My first observation derives from a rule of mine: If your contractor friend is your ultimate decision-maker, then he should have seen the place before you wrote an offer on it. Now, it might sound extreme to your ears to hear me call him your "ultimate decision-maker," but think about it — that is precisely the power and position you put your contractor friend in.

You said the home had passed the muster of you, your wife and at least three inspectors (who, by the way, make a living advising homebuyers on property condition for the precise purpose of informing their decision whether to buy), but that your friend’s word — without even entering the home — was enough to make you cancel the deal.

From this — the fact that your friend was your ultimate decision-maker — I derive two lessons for you, and pieces of advice going forward. If he’s going to be your ultimate decision-maker, he should be seeing properties with you or, at the very latest, before you write an offer.

In every event, he should be the first to see a place before you spend money on professional inspectors. OK, that was the first piece of advice.

The second piece is that I recommend you spend some time deciding whether you are comfortable with him making your decision for you. If so, fabulous. If that makes you at all uncomfortable, though, I would like to offer you some thoughts. …CONTINUED

First off, your friend — who is undoubtedly a fabulous contractor — is likely not an authoritative source on home values in your area, the real estate market, or even on the average condition of homes for sale in your area. He doesn’t advise real estate consumers and sell homes everyday, so as to have a good understanding of local list-price-to-sale-price ratios.

He probably doesn’t appreciate what it actually costs to buy a home like that on today’s market, or whether/how much "your" home was discounted for its condition problems.

Unless you simply have the sort of relationship where you are comfortable allowing your friend to exercise enormous power in your life decisions, what your friend is an authority on is fairly limited. He might be an authority on the work that is needed, and he is definitely an authority on what he would charge you (notice I didn’t say what it would cost, because it’s difficult for him to know what other contractors would charge you) to do various work to the property. So, that’s what I would take advice from him on, going forward.

Licensed and/or (in states where licensing is not available) certified home inspectors have a special expertise (different from that of a contractor, although many inspectors are contractors, by training) in looking at a property with a very thorough eye toward the long laundry list of items that should or do factor into a reasonable buyer’s decision-making — the things about a home someone should understand before making a decision whether or not to buy it.

Also, in some states, California included, your general home inspector cannot also be in the business of home improvement contracting — this rule is designed to eliminate any monetary incentive for the inspector to inflate the list of "work needed."

So, when I encourage you to rely on a mixture of information for making your decision whether to buy any given property, taking your friend’s feedback into account, but also that of your broker or agent (who, I can promise you, doesn’t want you to buy a home that you regret buying later, if that’s an avoidable outcome) and your professional inspectors, I’m encouraging you to assign appropriate weight to each stream of input, given the expertise and seriousness of the giver.

For example, the fact that your friend stated what he wouldn’t pay, after refusing to even come in and deeming improvements "no good," sight unseen, leads me to suspect he might not have been treating your request for his input with the gravity it deserves.

If you still want him to be your deal-maker/deal-breaker, moving forward, get his (free) opinion first, but only after asking him to treat your request seriously, professionally and thoroughly.

Tara-Nicholle Nelson is author of "The Savvy Woman’s Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Ask her a real estate question online or visit her Web site, www.rethinkrealestate.com.


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