Photograph by Kathy De La Torre
Martin Morgan, owner of All Bay Home Inspection Inc. www.allbay.com, has been a home inspector for 22 years. He advises clients who retain his services to be there for the home inspection so he can show them specifically any areas of concern.
Tendency to forego inspection is risky
By Sue Stone
Before the real estate market became the buying frenzy it is today, home inspections were a routine part of the process, according to local real estate agencies. Buyers bidding on a home would typically request the contingency of a home inspection before making a final offer. In today's market of extremely low inventory and high demand, many buyers are waiving the inspection to save time in preparing an offer.
"We strongly recommend to our buyers to have an independent inspection completed before making a final offer, but many people who have been in the market for awhile and have lost homes because of higher offers or less contingencies are making the decision to proceed without the inspection," said John Carman, manager of Coldwell Banker in Los Gatos. "This type of transaction is not in the buyer's best interest but in this kind of market some people are not willing to lose the chance to get a home--any home."
Although most real estate agencies have a list of qualified home inspectors to call for their clients, it is up to the client to decide if they want that service or not. Many real estate agencies, including Coldwell Banker, have a policy that if clients decide not to have a home inspection done before making a final offer, they must sign a document stating that they were advised to do so but waived the right. According to the California Real Estate Inspection Association (CREIA), the most frequent causes of litigation in real estate involve problems of disclosure and property conditions.
"During the late '80s, we saw a similar market pattern of buyers removing all contingencies in order to sweeten the offer to the seller, and many buyers who did so ended up paying hundreds, even thousands, to lawyers trying to recoup their losses," added Carman. "As licensed Realtors, our job is to try and make the transaction a successful experience for the buyer, the seller and the agent."
In an effort to protect all parties involved, Coldwell Banker takes the additional step of recommending to their sellers to counter offers with a seven-day period in which a home inspection can be performed. "It is in everyone's best interest to try and minimize any risk involved in the transaction, unfortunately, many sellers just wish to close the deal and move which leaves the door open for problems down the road," Carman said.
A home inspection, according to the American Society of Home Inspectors (ASHI), is a visual examination of the structure and all the pertinent systems within the home. This includes the roof, foundation, drainage, plumbing, heating and cooling system, visible insulation, walls, windows, doors, appliances, electrical outlets, basement, attic and general nature of the lot.
Home inspectors do not, unless authorized by the homeowner, do invasive inspections, such as removing fixed panels or walls or taking apart appliances. A seller can request a more thorough inspection for their own purposes, but a buyer's inspection will primarily focus on those areas that are visible to the eye.
Buyers wishing to obtain an inspection before making an offer are advised by the California Association of Realtors (C.A.R.) to hire an inspector who is certified by the American Society of Home Inspectors, or the California Real Estate Inspection Association. Both organizations require members to complete examinations and home inspection supervision tests, stay current on building practices and follow a specific code of ethics.
For more information or referrals to professional home inspection services, contact your local Realtor, or go to www.ashi.com or www.creia.com. The Yellow Pages under "Building Inspections" provides an alternative resource.
Martin Morgan, owner of All Bay Home Inspection Inc. www.allbay.com, is a home inspector with 22 years in the industry. He advises clients who retain his services to be there for the home inspection so that he can show them specifically any areas of concern.
"Though we provide printed reports to our clients, usually via email, by the next morning, a buyer who walks the property with us will be much more informed of particular issues that need to be addressed or watched," commented Morgan. "Probably 85 percent of our time is spent educating the client on the home they are about to buy."
In addition to being experienced building professionals, CREIA emphasizes that their inspectors should have good people skills because educating the client is a major part of the job. If an inspector is unable to explain what is meant by terms, such as deferred maintenance or ground expansion, clients may misinterpret their directions and not take the necessary steps to correct a problem.
Though C.A.R. recommends that buyers take the lead in having an independent inspection performed, they also suggest that sellers have one completed before listing the home on the market. The seller's inspection can then be used as a reference for the buyer's agent and the prospective buyer. According to C.A.R., however, a seller's inspection should not preclude the buyer having his own inspection completed.
"There is a practice currently going on in the North Bay that we strongly disagree with in Silicon Valley and that is agents advising their clients to accept the seller's inspection 'as is' without doing one of their own," said Jeff Barnett, vice president, Alain Pinel Realtors, Los Gatos. "Buyers who do not do an independent inspection are at risk for purchasing a home with potentially major problems."
Barnett attributes this practice to the "seller's market frenzy" Northern California has experienced the past few years. He says, however, that 'inspections forced on buyers by their agent' is a trend he does not want to see repeated in the South Bay.
"The old saying caveat emptor, or buyer beware, is especially true in the case of buyers relying on a seller's inspection as the final word on the condition of the property," added Barnett. "Buyers should be given the opportunity to call in their own inspector if for no other reason than to give themselves peace of mind."
Ourfamilyplace.com, a home buyer's information center, provides a list of questions potential buyers can use when looking for a professional home inspector. For example, what is the inspector's experience? How many years have they been in the business and how many inspections do they do a year? What type of report will they provide, written, oral or both? How long will it take to secure a report? What is included in the inspection? Are they certified with ASHI or CREIA?
One important recommendation mentioned in the list is to look for inspectors who are full-time, professional home inspectors, and not part-time inspectors, part-time contractors. Contractors who do home inspections on the side could be potentially looking for work, which might skew the inspection report in their favor, according to www.ourfamilyplace.com.
The best time to contact an inspector is right after the contract or purchase agreement has been signed, according to ASHI. Inspectors are usually available within a few days so there should be no problem in meeting any time contingency carried in the contract. ASHI recommends that the inspection clause in the contract should make your purchase contingent upon the findings of the home inspection and should specify the terms to which both the buyer and the seller are obligated.
Though it is still a seller's market, buyers are advised by state and local real estate associations to make every effort to have a home inspected before signing on the dotted line. Buying a home 'as is' can often spell trouble once the deal is closed and the seller has moved on, according to the Silicon Valley Association of Realtors.
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