Buying and selling a home has always been a big deal for both sides of the transaction. On one end, it's the single biggest investment most buyers will ever make. For sellers, it's a matter of making money on their investments and, usually it has to happen before they can buy another home.
When the economy is weak, the stakes are even higher. Banks and mortgage lenders are careful about who they lend money to and how much they lend. Sellers may have difficulty finding buyers willing and able to pay their asking price - or at least close to it.
How do you make sure the home you're buying is a sound investment? How do help your chances of selling quickly and at a fair price?
Both buyers and sellers can benefit from pre-sale home inspections. Basically, you hire someone to go through the home, inch-by-inch, floor-to-floor, from top to bottom, inside and out. He looks for existing and potential problems with the home - things that may make it a poor investment or a hardsell.
You can do that yourself, right? Technically, yes. But will you notice a tree that's growing to close the house? Are you going to climb into the attic and check for leaks in the roof and measure insulation levels? What about walking on the roof to check for loose shingles, loose mortar in the chimney, and clogged gutters?
A trained, experienced inspector will do all of that, and much more.
What to Look For
Finding the right inspector may take some time and research, but here are some tips to help:
- Ask friends and family who may have bought or sold a home recently for names of inspectors, or ask your real estate agent
- Ask any inspector for references from buyers and sellers they've worked for in the past and don't hesitate to call those references for their opinions
- Check to see if an inspector keeps up with ongoing training and education with and is certified by or belongs to an organization like the National Institute of Building Inspectors (NIBI) or American Society of Home Inspectors (ASHI)
- Check to make sure an inspector meets any education and licensing requirements set by the laws in your state
- Make sure the inspector has error and omission (E&O) insurance - if he makes a mistake in the inspection and it costs you money down the road, this insurance should cover your loss. The inspector may not be able to pay you even if you take him to court and win
- Ask to see a copy of the inspector's workers' compensation insurance coverage. If he gets hurt while on your property inspecting your house you, as the homeowner, could be liable for his injuries if he doesn't have workers' comp
What to Expect
Inspectors and inspections can vary a lot, but there are some common things to look for and keep in mind:
- You should get a detailed written report of the inspection, including details on exactly what was looked at and any problems discovered
- The inspector should ask - even insist - that you be present during the inspection. You hired him, after all. And, it's a great opportunity to get know the house - or get to know it better if you're the seller
- The inspection should be excruciatingly thorough, Depending on the size of the home, it could take hours to finish. Everything should be checked, including the foundation, roof, window/door seals, floors, electrical wiring, plumbing, the heating and cooling systems, and any appliances sold with the home, like a refrigerator, dishwasher, etc.
- Keep in mind that most inspections don't include tests for things like lead paint, radon or other toxic gases, other environmental or health hazards, and bug problems, like termites. But, most inspectors will tell you if they suspect such a problem. Specialists or home-test kits should be used if there are concerns
What to Do with the Report
If the report comes back with no problems at all, you should feel confident about the deal. If problems are discovered, you have some choices to make.
You're the seller: Consider fixing the problems before you put the house on the market. A buyer who gets an inspection report with few or no problems is more likely to buy than a buyer who's report is loaded with problems.
Your town may also require you to have a certificate of occupancy before finalizing the sale to make sure you follow local zoning laws. A local inspector can help with this as well.
Your the buyer: You have to figure out if you can afford to fix the problems if you buy the house as-is. Consider negotiating with the seller. Ask if he'll pay for some or all of the needed repairs, especially the serious and most costly ones - roof damage, foundation leaks, etc. Or, ask him to lower the selling price to help you pay for the repairs in the future.
If he refuses to do either, consider walking away from the deal. A savvy agent or real estate lawyer makes a contract or offer to buy contingent or conditioned on the buyer's satisfaction with a home inspection. Don't be afraid to change your mind about buying if the seller won't fix the problems or budge on the price.
Buying or selling a home can be exciting and stressful all at the same time. Hiring a good home inspector can take a lot of the stress out of the picture and help you make the best deal possible.
Questions for Your Attorney
- Are home inspections required by law in our state? Who has to pay for it?
- Two years after I bought the home I discovered the seller didn't make a repair he agreed to pay for after my inspection. Is there anything I can do?
- Is a seller liable if a buyer gets hurt using an appliance that was sold along with the home?