• Lee Roth

Inspections in Home Sales


Inspections in Relation to Home Sales

Buying a house is not like buying a new car. A new car comes with a warranty, a guaranty as to function and condition. But buying a house is a little like buying a used car: The parties need to find its faults before they finalize the deal. You set a price based on what you can see and what you know. You expect a new car to be perfect. You expect some issues with a used car. You can see a dent on the door of a used car. You may not have the qualification to know that the brakes are warn or a head gasket is about to fail. An expert inspecting a car should be able to point out these defects.

A favorite mechanic can check a car before you buy it. A homebuyer may and should turn to a professional inspection service. Even though a home inspection can bring a degree of uncertainty to the early stages of a real estate transaction — and in some cases can even torpedo the deal — it can help identify conditions in the structure that can be difficult or impossible to sort out at the closing or after the transaction is completed. If there are problems not known before closing the buyer will have to pay for them later in money and agravation.

Buyer Should Ask Questions.

A buyer should question the seller about the condition of the property, and especially any defects, before signing a contract. Full disclosure is a prudent policy for sellers. Generally, sellers are only required to inform buyers of defects that are known or should be known. But what does that mean and how can a buyer prove what a seller did or did not know of problems at contract, or even at closing, time.

A buyer should hire an inspector to fill in those gaps in the seller's knowledge about the condition of the house. If you were selling your house could you accurately project the remaining life of your heating system or the life of your roof? Most of us could not. You do not want to represent something you are not certain of on a disclosure statement. Knowing there was a short life or a long life would be expected to have an influence on the selling price.

Unless a buyer has evidence that the seller knew about a defect or repair problem, and failed to disclose it, a lawsuit for damages probably won't get very far. And law suits are expensive, sometimes produce unjust results, and are always uncertain. They should be avoided, and can be, if good informaion is available.

Houses Do Not Come With Guarantees

Home inspections are crucial because houses do not come with guarantees. Almost every broker produced contract specfically relieves brokers of responsibilities in relation to condition of the property and the adequacy of inspections. An inspection, before a contract becomes final, can provide a reasonable level of comfort to the buyer. From the inspection report she or he can understand what they are buying, determine if there are major issues they did not recognize from their own view of the property, and know to what level they should ask the seller to remedy preceived problems, or what they will accept to deal with after they own the property. Much depends on the perception of the reasonableness of the price under the circumstances.

Working Things Out

Lawyers representing sellers do not want their clients representing anything they cannot be sure of. They encourage inspections to releave their client of some responsibility in relation to the condition of the propertty. Lawyers representing buyers want their clients to know what they are getting into in relation to the purchase of any particular property.

The parties to a residential real estate transaction should read the contract closely, and the inspection report closely, to determine what defects the buyer wishes or requires the seller to fix. The buyer also should confirm the scope of the inspection process ahead of time and discuss what happens if the inspection turns up defects or repair problems.

The buyer should select an inspector carefully and with a clear understanding of the scope of the inspection. Some inspectors will exclude certain elements of the structure, such as the foundation, or insect damage, or the condition of a septic system, because they lack expertise or ability to assess them. The buyer also should insist that the inspector provide credentials, recordd of experience, and liability coverage issues. For example, what if the inspector missed an important defect that if known would have been a “deal breaker”.

Inspectors from house repair companies should be avoided because they may tend to exaggerate problems as a way to sway buyers or sellers to hire their companies to fix real or imagined problems.

Once the buyer and the inspector have settled on what the inspection will entail, the buyer must make sure the inspection is conducted within the time allowed by the contract, a written report prepared, and repair demands submitted to the seller within any deadlines set under the contract.

Buyer Should Be There For the Inspection

The inspector should be accompanied by the buyer, or a representative of the buyer. Often home inspectors point out defects not included in their written reports, and problems are often easier to understand when they can be seen and questions asked.

The buyer and seller should each receive a written report from the inspector as a basis to negociate any repairs or price adjustment,or in case the buyer seeks to rescind the contract or the matter ends up in court. The results of an inspection can, of course, kill the deal. But parties who are committed to the transaction usually can find a way to keep it alive. If there is a major defect reported the seller would have to fix it for the next buyer, so the seller might as well fix the defect in this transaction. Brokers and lawyers can help their clients understand the situation and usually will work to try to hold the deal together for the parties.

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908.782.5317 | lbr@lawroth.com 

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