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Friday, June 20, 2008

AZ Home Buyers, Sellers & Realtors®: Prepare for the Home Inspection!

A couple years ago, the real estate market was so crazy that many buyers were waiving their right to a home inspection just so the seller would accept their offer.  But those days are over and in the current buyer's market, the inspection period is once again being used as a time to negotiate price.  Although each contract is different, most Arizona home buyers have a 10-day inspection period.  During this inspection period, buyers can generally cancel the contract based on their inspections and receive a refund of their earnest money.

As a result, the inspection period is a very nerve-racking time for many real estate agents and sellers.  While most experienced Realtors® want their buyers to have a thorough home inspection, some real estate agents are scared to death that an experienced home inspector like myself will 'blow the deal' and cost them a commission.

But in my experience, most buyers don't want to cancel their contract when the inspection reveals problems.  Some buyers do, but usually the buyers will ask for major problems to be repaired, or for monetary compensation in lieu of repairs.  Sometimes, sellers will be offended or will refuse to negotiate based on the inspection and it does blow the deal.  But usually, the buyers and sellers come to a reasonable compromise and the deal closes.

I'm often asked by sellers and real estate agents if there's anything they can do to 'prepare' for the inspection.  Here are some things that can be done to make the home inspector's job easier:

SELLERS & SELLER'S AGENTS:

1.  Make sure ALL utilities are on prior to the inspection.  Most sellers keep the utilities on while their home is for sale, at least the electricity anyway.  But sometimes the gas or other utilities will be off if the home was vacant for an extended period of time.  Foreclosures and bank owned properties usually do not have the utilities on.  If the gas is turned off, the inspector cannot operate gas appliances such as the heater, water heater, stove, etc.  There are still many items that can be inspected, but you will not get the best inspection possible if any of the utilities are off.  If the water is off, I will not be able to properly evaluate the plumbing or anything else which uses water.  If the electricity is off, I cannot inspect anything that requires power.

My home inspection company always asks the client or Realtor® who makes the inspection appointment to verify that all utilities are on, but sometimes the gas or water company doesn't have it on when they say they will.  If I'm unable to inspect something due to the utilities being off and I need to come back to the property, I have to charge the client a re-inspection fee (currently $100, and likely to increase soon due to gas prices).  Even when it's not the buyer's fault, the buyer is the one who usually ends up paying it.  A good buyer's agent will insist that the sellers reimburse the buyer for this re-inspection fee since it's usually the seller's responsibility to have the utilities on for the inspection (I believe the standard AAR contract requires this).  But this is a cost that can be avoided altogether with some prior planning.

2.  Unlock gates and remove locks from electrical boxes, sprinkler timers, pool equipment or fences, etc.  Basically, unlock everything that's locked so the inspector can access it.

3.  Secure your pets if necessary.  I love animals and I frequently have animal friends accompany me through the house as I do my inspection.  One time, I even had about a half-dozen weiner dogs follow me through a two-story house I was inspecting (have you ever seen a weiner dog try to run up stairs!)  I realize I'm in their territory and I try to introduce myself to the pets in a non-threatening way.  I don't mind being followed and I even enjoy interacting with the animals.  But if you have a large or aggressive pet that needs supervision or restraint, please do so!  In the thousands of home inspections I've performed, I've never been attacked by a pet - but I've had a few big dogs I wasn't sure about that were definitely a distraction.  Also, if you have a pet that likes to sneak outside when the door is opened, please make me aware so I can watch out for him/her!

4.  Move ALL items that may limit the home inspector's access.  And please don't stuff everything in the garage or in closets, because I have to inspect in those areas too!  Home Inspectors are not going to move personal items to inspect behind or underneath them.  If access or visibility is obstructed, that area will not be inspected.  This isn't because we're being lazy, but moving things really isn't a home inspector's job.  In fact, the state standards specifically say home inspectors are not required to move personal items, furniture, equipment, etc.  And it's really best for the homeowner that we don't move their stuff.  Most homeowners wouldn't want us to, and we don't want to take a chance of breaking something (which sometimes happens when you start moving stuff).

5.  Replace bad light bulbs.  This makes my job easier and I won't call a light fixture bad when it's really just the bulb.  I have a tool I can screw into the light bulb socket to test the light if it won't come on, but it will only fit regular light bulb sockets.

6.  Don't try to hide stuff with last minute paint or repairs!  This never works and will likely call more attention to the area.  For example, painting the ceiling to cover a water stain doesn't keep me from knowing about a roof leak.  I'll still see the evidence on the roof and in the attic.  Likewise, fresh caulking in the shower may cause me to look more closely at that area.

BUYERS & BUYER'S AGENTS:

1.  Buyers should be present at the inspection.  The scariest way for a buyer to learn the results of their home inspection is by reading the report.  If a buyer is at the inspection, they can ask questions about the problems that are found and the repairs that are necessary.  They can ask questions like "is that common for a house this age?".  As a home inspector, it's my job to make sure my clients learn as much information as possible from my inspection.  I report on everything I see, but I'm not doing my clients any favors if I scare them unnecessarily.  Sometimes, a big list of defects in the home inspection report can scare an unprepared buyer out of one deal, only to find the next house they put under contract has most of the same problems (because the problems are common for the age/type of house).  So I make sure my clients understand as much as possible about the problems I find, and those problems are put in perspective.  A client who comes to my inspection leaves with an understanding of what problems I found, and a good idea which ones are major expenses.  When clients are not at the inspection, I often get frantic phone calls from buyers who are worried about something that's really no big deal.  But when they read the report without the ability to be there, see it and ask questions, it's much more scary. 

Many buyers are out-of-state and cannot attend the inspection.  But if at all possible, the buyers should attend the inspection. A normal inspection takes several hours, and I know it's boring to sit around that long while the inspector inspects!  So ideally, the client and agent should show up during the last half hour of the inspection (ask what time that will be when you make your appointment).  That way, the inspector can give the client and agent a summary of what was found and address their questions.

2.  Verify that all utilities are on.

3.  Understand what a home inspection is, and what it is not.  A pre-purchase home inspection is an opportunity for the buyers to learn more about the home's condition before they own it. Most buyers schedule their home inspection while they can still back out of the deal or negotiate repairs/money. 

While sellers may agree to make some repairs, buyers need to understand that a home inspection report is not intended to be a repair list for the seller (except perhaps on new homes/warranty inspections).  Even on brand new homes, I will usually find dozens of problems.  So a home inspection report with only fifteen deficiencies is a pretty clean house.  But when a first time buyer who's never had a home inspection and thinks they're buying the perfect house gets a report with fifteen deficiencies, they can be scared to death.  Or they may expect the seller to repair every single item, which almost never happens in a re-sale situation.  Unreasonable expectations from one party can blow a deal.

In short, buyers and sellers need to be prepared, and know in advance what to expect from the home inspection.  From my experience, fear of the unknown is the primary reason most deals fall out of escrow after the inspection.  But even when the home has problems, a home inspection should remove both the fear and the unknown, giving the buyers confidence in their purchase rather than scaring them away.  Now don't get me wrong, if the house has several expensive, unexpected problems, there's no amount of preparation that can overcome that.  But knowledge is power, and the home inspection goes much smoother when all parties are prepared and know what to expect.

Scott Hubbard of Homewerx Home Inspections in Phoenix, Arizona Written By: Scott Hubbard
Certified Home Inspector, ASHI® Member
Homewerx Home Inspections
Office: (480) 503-2611
Toll Free: 1-888-THE-WERX
Email me or Schedule a Home Inspection Online!

Posted by Scott Hubbard, Arizona Home Inspector on June 20, 2008 | Permalink

Comments

Lists like these should be included in a handbook for buyers&sellers. As a Toronto real estate agent I think that most misunderstandings come from lack of information. Both sides think that they are in right but it is not always the case. And then it is up to the middle-man (realtor) to clean up the mess. Message to every one: ask more!

Posted by: Toronto real estate agent | Jun 22, 2008 7:30:13 AM

You are aboslutely right....it is all in the hands of the realtor... and Scott Hubbard nice post...great work...nice information you provided..

http://www.johnbeckseminar.com

Posted by: Tax Forclosures | Jun 23, 2008 8:56:19 PM

Thanks for the excellent check list.
Aloha,
Keahi

Posted by: Keahi Pelayo | Jun 26, 2008 9:42:08 AM

If you are buying a home, make sure that your inspector is a degreed, licensed & certifed structural engineer. When I purchase my home in Phoenix, the inspector report cited that the oven did not heat to the correct temperature, but failed to notice that the ceramic tiles were cracked due to foundation cracks that were over 2 inches wide(which I discovered when I replaced with hard wood). The inspectors report sited faulty tile installation. Never allow your realtor to manage the inspector process - - hire one yourself!!

Posted by: Mike Pasmore | Jun 26, 2008 7:42:48 PM

A very thorough list. You would think some of these would be common sense but I bet some miss alot of these suggestions.

Posted by: arizona auto insurance | Jun 27, 2008 10:01:43 PM

Great Blog! I have been selling real estate in Bend Oregon since 1981 and find it refreshing to find a helpful blog like yours! Keep up the good work!

www.bendoregonrealestateexpert.com

Posted by: Jim Johnson CRS | Jul 5, 2008 8:28:15 AM

Good information

I use to be a home inspector, but I was to slow at it to make any real money.

Of course most of the agents call us “Deal Killers”, not home inspectors.

I actually hire one now to inspect any property I buy.

You definitely need one on your team.

Look forward to reading more on your site.
Good Luck to all

Posted by: Lease Option | Oct 7, 2008 12:37:05 PM

Your blog are top 5 on real estate blog.You know or not?

Posted by: motel for sale | Nov 2, 2008 7:36:39 AM

Thanks for the list of items to prepare for a home inspection. I have included in the As-Is addendum for contracts that utilities all need to be turned on within the first day of the buyer inspection period as a result of the listing agent and homeowner overlooking this (as the Buyer's Realtor, I am then scrambling to make sure everything gets done in terms of inspections before thr 10 day period ends). Their failure to turn this on can impact the buyer and reduce their reasonable inspection period in the sense that they cannot have a home inspection fully performed without utilities being turned on. Great suggestions!

Posted by: David Lorti | Nov 4, 2008 2:25:21 PM

Excellent post.Look forward to reading more on you blog.Thanks for sharing!

Posted by: sell florida land | Nov 7, 2008 11:02:05 PM

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