Understanding Home Inspections

How They Work

Once the Buyer and Seller agree to a contract, one of the first things the Buyer will do is order the inspection.  They usually get the names of inspectors from their agents.  An agent should never recommend any one particular inspector (for obvious reasons) but it is perfectly acceptable for agents to provide a list of licensed inspectors with the state of Texas so the Buyer can make their own choice on who to use.  The inspector will ask to be paid before they start their work.  The inspection takes from 3 to 6 hours depending on the size of the home and if there is a pool or other outside structures. 

Normally, one inspector completes the entire home inspection, but they might call in a pool expert or an alarm company to look at those systems.  When homes are on septic systems, a second inspection is advised (and often required by lenders).  That inspection (in our opinion) should always be done by either a "Registered Professional Sanitarian" or a "Registered Sanitarian".   Sometimes Buyers will also send out an engineer to look at the foundation, but I rarely see that unless the first inspector notices something suspicious.

Inspectors prefer to get in, complete the inspection, and then spend time with the Buyer afterwards going over it.  A good inspector will spend as much time as needed going over the report with the Buyer after the work is done.  I have never met an inspector who enjoys having a Buyer or Seller following them around asking questions as they are trying to get their work done.  By the way, our listing agents purposely do not attend the inspections and we also encourage the Sellers not to be there.  We do not want anyone on the selling side to influence the inspector in any way.  We can address any questions that come up during the inspection with written communication afterwards so everyone is getting the same information.

Pre-listing Inspections

Sometimes Sellers will enlist an inspector to check out their home before it goes on the market (a pre-listing inspection).  While this is not a bad idea (because major issues can often be spotted and addressed immediately), it does not guarantee that the next inspection will not find something else.  In fact, I would bet the second inspection will find items that were not called out on the first inspection.  Every inspector is looking at the home through a different set of eyes.  I have found they all seem to have certain areas they are particularly focused on and other areas where they place less emphasis on. 

I have never seen a perfect inspection, even on a brand new home.  (And yes, we always encourage our Buyer clients to inspect even a new home).  Every home is going to have some things that come up, but the great majority of time, these are not insurmountable issues. 

Who Pays For Repairs

From the Seller's point of view, they may have lived in the home for many years and never had problem one.  All of a sudden they are presented with an extensive list of items discovered by the inspector requiring repair.  How are they going to react?  We never know until they get the inspection report and request for repairs.

We prepare Sellers beforehand not to be discouraged and not to panic when the inspection comes back.  We remind the Seller that they are not required to make a single repair called out on the inspection report.  That is why the amendment is commonly referred to as a "Request for Repairs".  Of course, if the Seller is unreasonable (and that happens too), the Buyer doesn't have to buy the home.  It always comes down to how bad the Seller wants to sell the home and how bad the Buyer wants to buy it.

I have had instances (although rare) where the Buyer asked the Seller to make every repair called out on the entire inspection report, large and small.  I have always felt that was unreasonable.  I have also had Buyers who made no requests for repairs at all, even though the inspection report called out many.  The Buyers were perfectly happy with the price they negotiated on the home and felt no need to push the Sellers any further.

Sellers tend to lose interest when they are hit with "picky" repairs. In their way of thinking "If the Buyer is looking for a home in mint condition, they should go buy a new home".  Buyers tend to lose interest when the Seller takes a hard line and says they are not going to make any repairs at all.  In either case, once this happens the negotiations can go south pretty quickly and it makes our job much more difficult in bringing the parties together. 

Health and Safety Issues

There is, however, one area of inspections which I have some very strong opinions about.  It has to do with repairs on items that relate to serious health and safety issues.  Those repairs should be made by the Sellers.  It might be a small gas leak, incorrect electrical wiring, an undersized breaker, etc.  Anything an inspector calls out that has the potential to harm a person or damage the property, in my way of thinking, is a no-brainer for the Seller to repair.  Why?

1. The Seller is probably living in the home and will continue to do so until closing.  Why wouldn't they want to make a repair on a hazardous situation once it is pointed out to them?

2. Once a health and safety issue has become identified to the Seller, it is their obligation under the law to pass that knowledge on to any Buyer of their home from that point on.  It doesn't matter if they change Realtors or even if they sell the home by owner.  They still must notify the Buyer of their home of the hazardous situation.  Since the problem isn't going to go away on its own, what is the Seller gaining by not correcting it right then?

3. It is the right thing to do!  Who would want to subject someone else to a hazardous situation in a home they have sold to them?

Seller Repairs Versus adjustments on the sale price

Once repairs have been negotiated between a Buyer and Seller, the next consideration is how are they going to be taken care of?  Should the Seller be responsible for the repairs or should the Seller just discount the sale price to cover the cost of the repairs and let the Buyer handle them?

If the Seller is going to be responsible for the repairs, we always make sure they obtain receipts from licensed professionals for any repairs made that are not at the most simplistic level.  We don't want a "friend of a friend" with minimal electrical knowledge doing critical wiring. 

Many Sellers simply don't have the time to take care of the repairs.  They just cannot schedule and meet plumbers, electricians, carpenters, masons, etc. at the home.  They would rather provide an allowance at closing to cover the cost of the repairs.  Of course, this means the repairs will not be done until after the new owners have taken possession of the home, but there are some real advantages to this.  The burden of doing the repairs correctly is taken off the Seller.  If the Seller made a repair and something went wrong, the Buyer might assume the Seller hired an inferior contractor.  The Buyer is now taking on the responsibility of doing the repairs and they can have them done by the contractor of their choice. 

Re-Inspections

Just because a seller agrees to do a repair doesn't mean it is going to get done.  Nor does it mean it will be repaired correctly.  Most of us don't have the skills to make that determination so how do you protect yourself as a buyer?  You hire the inspector to come back to the home after the initial inspection for a re-inspection.

Find out up front what the re-inspection cost will be before you hire the inspector.  If the inspection company says they don't do them, keep looking.  These aren't money makers for the inspectors, so some may balk at the re-inspection.

It shouldn't cost more than about $100 for a re-inspection unless there are extenuating circumstances.  This is why it makes sense to hire an inspector living in the same general area of the home you are buying.  If you hire an inspector from Ft. Worth to do the initial inspection, they are going to have a higher trip charge than an inspector who lives nearby.

The buyer normally has the right to delay the closing until the agreed upon repairs are completed by the seller, but once the home has been sold, much of the buyer's leverage is gone.  The chances of having the repairs completed by the seller diminish greatly ... especially if you aren't working with an honorable seller.