Very little that has to do with buying and selling residential real estate is black and white. This is often evident when inspections are done. And inspections are a critical part of a home sale transaction.
Buyers usually make offers to buy a home contingent on inspecting the property to their satisfaction. An inspection contingency gives buyers the permission to inspect the property and can give the buyers the right to withdraw from the contract without penalty, depending on how the contract is written.
For this reason, and to help sellers make accurate disclosures about their property, sellers often choose to have presale inspection reports done before they put their home on the market. Minimally, they order a “wood-destroying pests and organisms” inspection (loosely referred to as a “termite” inspection) and a home inspection.
If the home inspection recommends having an old roof inspected by a roofing contractor, it’s a good idea to follow through with this, and any other similar recommendation. Any presale inspections should be made available to buyers to review before they make an offer.
HOUSE HUNTING TIP: The reason for ordering presale inspections is not to preclude buyers from doing their own inspections. Buyers should inspect the property to their satisfaction. A well-inspected property protects both the buyers and sellers.
Some sellers wonder why they should pay for presale inspections when buyers are likely to pay for their own inspections. The reason is that it’s beneficial for the buyers to have as much information about the property before they make an offer.
This results in an offer from educated buyers who are less likely to withdraw from the contract or renegotiate the price than they would be if they didn’t have pertinent information about the property condition before they made the offer.
This doesn’t mean that presale inspections guarantee that there will be no further negotiations after the purchase contract is signed.
Sellers rarely follow up on all the further inspections recommended by the home inspector. Recently, a homeowner didn’t have an older furnace inspected, as recommended by the home inspector.
After a purchase contract was signed, the buyers had a few inspectors look at the property, including a furnace inspector. The inspector said that the furnace was shot and should be replaced. The sellers then called in a different inspector to look at the furnace who said it was old but serviceable, and didn’t need replacing.
To break the stalemate, the buyers and sellers agreed to have a representative from the local gas and electric company look at the furnace. If the heat exchanger in a gas furnace is cracked, it can leak noxious carbon monoxide fumes.
The utility company would shut the furnace down if the heat exchanger were cracked. However, the inspector agreed with the sellers’ inspector and the buyers accepted the furnace in its “as is” condition.
Inspection findings can be somewhat subjective. For example, one termite inspector may say a window can be repaired, while the other says it needs to be replaced. One solution would be for the sellers to credit the repair cost to the buyers at closing. The buyers can decide whether to repair the window or use the credit as partial payment for a new one.
Conflicting reports may be an issue of price. Recently, the owner of a home that needed painting asked two painters to provide estimates for painting the interior. One bid was more than double the amount of the other. Often the difference in price has to do with the quality of the work.
THE CLOSING: Sellers needn’t be obliged to provide the buyers with a “Cadillac” job. A quality job at a reasonable price should suffice.
Dian Hymer is a real estate broker with more than 30 years’ experience and is a nationally syndicated real estate columnist and author.