A good home is as important as a good deal
Following steps in home inspection process can take stress out of transaction for buyer
As the ink dries on the sales contract, buyers develop a sudden case of heartburn as scenes from the vintage movie "The Money Pit" mysteriously begin playing in their minds. They are plagued with visions of termites swarming or the property developing a myriad of mechanical and structural problems, ones that won't become evident until the day after they move in.
They have shopped hard to find a good deal. How can they know they bought a good home?
There's no need for them to stock up on Alka-Seltzer because the majority of the buyer's concern can be eliminated by following a few simple steps.
- Step one is to make sure they have access to the property's most current information. Home inspections and Seller's Disclosures are a snapshot of the property's condition at a point in time, thus they do not necessarily reflect the condition of the property the day they decide to buy it. Sellers may have a "recent" home inspection report from a previous deal that failed to close and they may offer it to the new buyer as a way of streamlining the transaction. There is nothing wrong with using it as long as the buyer weighs the risks, because Murphy's Law says that if something in the home has gone kaput, it did so after the first home inspection was completed. A new home inspection may be the safest route.
Another document that the buyer should request in the sales contract is a copy of a current Seller's Disclosure. The key word is "current." It is standard practice for a seller to fill out this document when the property is listed and then it usually gets stuffed in the listing file until a contract is submitted. The problem is that some properties are on the market for months, if not years, during which time the condition of the property can change. Sellers may have made the proper corrections, but they generally forget to update their Seller's Disclosure. Everyone wins when there is full disclosure, so it is a good practice for all concerned to have a clause similar to the following added to the sales contract: "Seller to provide a Seller's Disclosure that reflects the condition of the property as of the effective date and this contract is contingent upon buyer's acceptance within X days."
Prudence is wise as long as it doesn't lead to paralysis. Some agents or their buyers will request a copy of the Seller's Disclosure prior to making an offer. Learning as much about a property before you decide to buy it isn't a bad idea, but one should do so realizing the risks of slow decision making. Buyers have missed great deals because they performed their due diligence before they had the property under contract. If a buyer wants to make sure each two-by-four is plumb or they want an exact count of cracked roof tiles, great, but do this research during the inspection period, after the property is under contract.
- Step two is to understand what a home inspection is and what it is not. A home inspection is like an annual physical. During a physical your doctor gives you a general exam of your major systems. You may pass the physical, but that does not necessarily mean you're 100 percent healthy, because something may be going on in your body that could only be determined by performing more specific and invasive tests. If the doctor felt something didn't look right, he would ask you to see a specialist for a closer look.
Likewise, a home inspection is a general examination of the property's health. The inspector will visually check the major systems of the property and if they pass his inspection, chances are the home is in good shape. Keep in mind that a home inspection is not equivalent to an MRI or a CAT scan, because latent issues could still lurk beyond the eyesight of the inspector. The buyer has the option to hire a specialist to analyze every system in the property, but spending more on inspections than he did on the property sounds ridiculous. Normally, if the home inspector finds something suspicious he will recommend a specialist be called for a more in-depth examination.
- The third and most important step is to understand that inspection issues will fall into one of three categories. The first category includes issues that the contract specifically requires the seller to correct. The second category would be issues that the contract specifically states that the seller is not required to fix and the final category deals with issues that are not specifically mentioned in the contract. Most inspection anxieties revolve around misunderstanding what issues are legitimate seller's responsibilities, so it's a good idea to read the inspection paragraph carefully. A clear understanding of this step will keep countless deals together and maybe prevent a black eye or two.
Two out of three categories are no-brainers because the buyers and sellers simply have to abide by the contract. End of discussion. However, the third category is a potential minefield because the contract does not specifically list the thousands of doodads that could potentially need a minor adjustment. Sellers usually feel they gave the home away and have little tolerance for being nitpicked to death. The buyers feel they did the seller a favor, thus the home should be delivered in like-new condition.
Too many deals die right here because ego wins over rational behavior. That's sad, because a handyman can usually correct these minor issues in less time than it takes for everyone to get worked up over it. So, apply a little common sense along with an application of the Golden Rule and chances are that the good deal you're looking at will become a good home for many years to come.
Keep the faith.
-Denny Grimes is president of Denny Grimes & Company, a local real estate firm. He can be reached at [email protected].