Almost all purchase contracts contain a contingency for a home inspection. Those that don’t, really should. There are some contract contingency clauses that are marginal. In a multiple offer situation, some of contingencies may be deleted over to make your contract more attractive. The home inspection contingency should not be on that list. Even in a foreclosure or short sale when the seller will not execute repairs, you still need a home inspection contingency. In that case the contingency will contain wording that if the inspection reveals conditions you can not live with, you can void the contract.
So that leads to the question of how to pick an inspector.
One Side – Don’t use the inspector suggested by the Realtor
There are books and articles on purchasing real estate that strongly suggest you should never use the home inspector suggested by the buyer agent. They suggest that since inspectors depend on Realtor referrals, they will not “kill a deal” by properly presenting major issues. The buyer is a one time interaction while the Realtor represents dozens of deals in the future. Who is that inspector really working for?
A good, logical argument but I strongly disagree.
The other side – It is fine to use the inspector suggested by the Realtor
Well, let me redefine that. It depends on the business philosophy of the Realtor you are working with. My business is based on referrals – over 80% of my business comes from past clients and referrals. One of the quickest ways to stop that stream of referrals is to have someone move into a home and find out that the condition of the home is worse than they expected. To keep those referrals coming, I need to make sure my buyers have a very good inspection experience. The inspectors I recommend conduct a thorough inspection and, consistent with my business philosophy, take substantial time to educate buyers on the workings of the home. A good inspection has two fold purpose. The inspector needs to uncover any problems in the property but also needs to make sure the buyer knows what will be required to keep the home in good condition.
Now, this is not to say that a buyer may not find a problem upon move in that was not in the inspection report. It has happened in the past with inspectors recommended by me and I am sure it will happen again. The inspector is, in essence, taking a snapshot of the home on a date that is usually 30 to 60 days before settlement and in some cases even longer. Conditions can change in that period. There could be issues that surface only when certain weather conditions exist. Perhaps on the day of the inspection and later, the walk thru, those conditions were not present. When this happens to my buyers, I am quite concerned. If I were to get several such reports from the results of a specific inspector, that inspector would no longer be on the recommended list. Believe me, the worst problem in this business is an after settlement issue.
One other source for an inspector
Now, the Realtor should recommend a few good inspectors. But perhaps you have had a friend, relative or colleague who recently bought a home and had a wonderful inspection experience. Absolutely this is a great place to get a recommendation. I would suggest that any inspector selected be a member of ASHI (American Society of Home Inspectors) or a similar group. Sure, there are great inspectors who are not members of these organizations (and there are inspectors who are not so great who are) but at least you know there are some minimum standards when one belongs to one of these associations.
A good inspection is more important than ever
Upcoming changes (as of 1/1/12) to our standard sales contract now include language that the home is sold “as is” as of a certain date. My guess is that the most common date inserted here will be the home inspection date. Thus, a detailed report is critical. Randomly selecting an inspector could be quite costly. It is best to go on a referral from a friend, relative or colleague or go with one that the Realtor recommends.
What have been your home inspection experiences?
Photo Credit: Danilo Rizzuti