Inspections - for Buyers
Buyers will very likely hire one or more inspectors to report on defects in the property the buyers are purchasing to determine if the condition of the property suits their needs.
No property can really be forced down a buyer’s throat and sold “as is”. Buyers have the right to make sure that the home they are purchasing is in a condition acceptable to them. To assist in determining that the home they are purchasing is safe, without health hazards, and the systems are operational, buyers usually hire an inspector to conduct a “physical inspection”. The inspector notes whatever problems they find with the property, and they generate a report whose impact on the transaction is then negotiated between seller and buyer.
Inspection reports are a major cause of conflict between buyer and seller in nearly all transactions. Sellers don’t recognize any problems with their “perfect” homes, and they don’t want to fix anything in a property that they’ve already mentally abandoned. When confronted with a physical inspection report, they often get emotional and dig their heels in further claiming that the sale is “as is”. Sellers should know that, contractually, the seller has no obligation to do any repairs or even to respond to buyer requests for repairs. Still, a compromise is usually reached because the seller wants to sell the home.
On the other side, the buyers have no obligation to purchase a property that doesn’t suit them or has defects that the buyers deem unacceptable. Under normal conditions, it wouldn’t be unreasonable for a buyer to request money or repairs for those defects that couldn't reasonably be observed when the offer was written. But the buyer doesn’t have to be reasonable. In essence, the buyer can walk, or threaten to cancel, for just about any reason – if within the standard 17-day inspection period (or another period, as specified in the contract). As long as the buyer complies with all the other terms of the transaction, the seller can't cancel the contract simply because the buyer asks for repairs or a credit. But, if the seller has another solid offer behind the buyer’s, then the seller may just deny the request for repairs and challenge the buyer to cancel.
The inspector’s main goal is to stay out of a lawsuit. This even overrides his goal to make a few hundred dollars on the inspection. So, he will note every defect he sees and also suggest that the buyer conduct further inspections with a specialist if he suspects any problems (plumbing, electric, roofing, pool, soil, mold, foundation, HVAC, …). Inspectors usually note “real problems”, but they also make mistakes, interject their opinions, or get direction from the buyer or his agent on how aggressive the problem report should be. The challenge for both buyer and seller is to interpret the inspection report so they can understand what the real problems are.
Here are items in the inspection reports that often cause problems:
1) Property isn’t available for a full inspection: Utilities are turned off, attic/crawlspace/basement are inaccessible, or some other problem where the property cannot be fully inspected. This will cost another appointment by the inspector. Someone has to pay. It is usually the seller, since the problem is the seller’s fault. This goes for appraisals too – especially if smoke & CO detectors aren’t installed or the water heater isn’t properly strapped.
2) Dated items or those worn with time, but still in good working order. The seller can claim that the appliances work, but the buyer doesn’t like that the appliance can fail at any moment (Home warranty should cover this, less a $50-75 service fee).
3) Building code changes. It is unrealistic to expect a house that was built say, in 1970, to conform to current building codes and zoning laws. Inspectors will note that GFCI outlets are missing, handrails are too low, …
4) Comment that an item is near the end of its useful life. This is similar to #1, above, but the inspector’s note on his report could void part of the home warranty.
5) Subjective comments that a better type of (filter, piping, smoke detector, furnace, …) exists, putting doubt in the buyer’s mind as to the quality of the home – and infuriating the seller that hasn’t seen a problem with that feature for the past 20 years.
Unfortunately, “being reasonable” is the answer to resolving these inspection report items – and that’s a challenge when money is at stake. Both sides should ask: “Should the buyer have reasonably known about the problems at the time of the offer? Are there any safety or health problems? Are there defects to systems that a reasonable person would expect to work? If this doesn’t get fixed, could it cause damage?”
Call us if you have any questions about inspections.