May 5th, 2016 8:09 PM by Gregg Mower
Should I get a Home Inspection done on the home I am buying? Should I get a roof inspection? Should I get the pool inspected? These are just a few common questions we get from our home buyers in this competitive Real Estate Market we are in. My answer, as the Broker of record of MAE Capital Real Estate and Loan, is yes and in most cases a hell yes. Although, we are in a market where there are more buyers than there are sellers, making it very comparative when making offers on homes. As a buyer you should do everything to make sure you are protected. Your Agent may tell you that there are multiple offers on a house, and that the seller will only take “as is” offers. That is good information, but unless you are prepared to do work on the home you are about to purchase you should make every effort to know all you can about the house you want to buy, before buying it. The simple reason is; that if you waive your inspection rights and you buy the house, then find out that the only reason the house is still standing is because the termites are holding hands, at that point your investment may not only be gone but you may have to spend thousands upon thousands more to fix the house to make it livable. There was a great movie that came out in the 80’s called the Money Pit with Tom Hanks and Shelly Long that comically illustrates this. In the real world it is not really funny if you get stuck with a house like that.
The minimum inspections I recommend my clients get when they are purchasing a home are; a termite report, a roof report/roof certification, a home inspection, and if they have a pool an inspection on the pool. These basic inspections not only tell what is wrong with the home currently you will find out what could go wrong in the near future with the house. As a Broker, I want to make sure my clients have all the information on the house prior to them closing escrow. These inspections are referred to as transaction contingencies in the Contract. We call them contingencies as the contract is contingent upon these inspections and escrow can't close until the buyer has completed and accepted all the inspections within a specific period of time. We even have a contingency release form that we make the buyer sign if they have asked for the inspections and they have been done and are satisfactory for the buyer.
If an Inspection comes back with work recommendations, we go over this with our clients to see if they can live with the problem(s) stated in the report, or if they wish to ask the seller to repair the items before the close of escrow or some combination of that. When this is done during the contingency period the negotiations start all over again with regards to everything in the original contract, such as sales price and all the terms and conditions of the original contract. So a buyer should be informed of all the circumstances when going back to a seller to ask for work to be done, such other offers and market conditions. It is our job to help guide our clients through this maze so they can make informed decisions.
If a home buyer decides to take the home “as is” they may not be entirely stuck, as the inspections will come with warranties, for lack of a better word. For example, a Termite Report might be clear, but the Roof Inspections came back with a low life expectancy and they recommend that a new roof be installed. This simply means that the roofer will not warrant the roof for the years we asked and if that is acceptable the buyer then may go ahead and release contignecies, as the Termite Report is warranting the structure to be clear from active infestation and dry rot. But if all the reports come back with major work to be done before they would warrant the home, then unless you are prepared to fix the items yourself, at your own expense, you might want to back out or make another offer to purchase.
If the home has items that you are not familiar with such as a pool, we recommend that you have this inspected by a professional that can stand behind their inspection by either a warranty or something similar. Pools have useful lives like roofs where the plaster or pool bottom may need replacement, or the pumps, lights etc.. A good inspector can give recommendations of life and cost to fix if they were to go bad. This information is good to know as a potential home buyer, as you know before you buy what it will cost to fix if something does go wrong. These extra inspections cost the potential home buyer money prior to closing but they can save the buy thousands of dollars by simply knowing what things cost to fix.
Buying a home without these basic inspections is like walking into a lion’s dens blindfolded. You just can’t know what you are getting yourself into unless you are a licensed contractor and even then most of the contractors I know get a basic termite report before buying as they don’t know about the bug side of a house. As a Real Estate Broker here at MAE Capital Real Estate and Loan we make sure our clients know this before going out to look at homes. If our clients wish to buy “as is” properties with no inspections, we still disclose everything we know and what the seller knows about the property prior to making an on offer on a house. We also make the buyer sign a form that they have been told that we strongly recommend these basic inspections.