This is where things get REAL for the home buyer. A home inspection
can make or break a sale. The inspection is where you understand if your
expectations are in-line with reality. When issues arise, these can
impact everyone involved....from the home buyer, the seller and the
agent. The buyers discover their dream house needs thousands of dollars
in repairs. The sellers discover they'll have to settle for a lower
purchase price. The agents discover that the buyers and sellers can't
come together over a deal. It can be a rough wake-up call for everyone
involved. As a real estate agent, you'll experience hundreds of home
inspections during your career: good, bad, and ugly.Your clients
will only experience a few. They need someone to help them navigate the
inspection itself and the subsequent negotiations, and that person is
you. Below, you'll find the basic realities of a home inspection and
your role in the process. IS A HOME INSPECTION THE SAME AS A HOME
APPRAISAL? Home inspections and appraisals are different processes
completed by different professionals. Appraisals focus on evaluating the
current market value of the home. Flaws are a part of that valuation, but finding problems
isn't their primary job. Mortgage lenders typically require appraisals
to make sure the property is worth what a buyer is paying. Inspections
focus on the condition of the property and its systems exclusively. They
look for health and safety issues, as well as more minor repairs. They
aren't required (by law or by lenders), though the FHA strongly
encourages it.
When does a home inspection happen?
There are two kinds of inspections in residential sales. The Buyer's
Inspection happens after an offer but before closing. Nearly all home
sales (80% of resales) will go through the buyer's inspection process.
They cost less than $1,000 and act as an important safeguard for the
buyer. The Seller's Inspection happens before the home is listed, if it
happens at all. They give sellers an opportunity to get ahead of
problems, but there are downsides. More on this later.
How long does a home inspection take?
An average-sized house will take a few hours. 2-4 hours is average. The
inspector will walk through the house's exterior, interior, and the
surrounding area. They'll notate and take photos of any defects or
hazards and their severity. The written report should take three or four
days to complete. With QuickInspect, it's ready to send from the
property immediately following the inspection.
What qualifications should the home inspector have?
Here are a few of the things you should consider when working with an
inspector:
- Most states require licensing for home inspectors, but there are 15
states that don't. You should know your state's requirements, and
always double-check the status of inspectors.
- Even if your state doesn't have licensing, you can check inspectors'
certifications. The American
Society of Home Inspectors (ASHI) is the most common and
sets standards for the industry. The International Association of
Certified Home Inspectors (InterNACHI) is another.
- There is no standard inspection format. But your state may provide
requirements on what needs to be evaluated, and ASHI publicly posts
its standards
of practice.
- Accuracy Context. Every home is going to have
issues on inspection. A good home inspector should be able to say
when the problem is minor and when it needs to be looked at by a
professional. They should be able to advise clients on the relative
seriousness of the problem. Their written report should be
consistent with what they communicated in person.Home
inspection comes with substantial liability, and 60-70% of
inspectors are self-employed. That can make some practitioners
skittish and lead them to red flag every issue (especially in
writing). You don't want them to downplay major problems, but you
don't want them to blow issues out of proportion either.
Should seller's agents encourage a seller's inspection?
The answer depends on your seller and their house. A pre-listing or
seller's inspection can allow your clients to handle issues before a
buyer ever sees them. It can also help smooth the way during closing and
relieve some of the stress during the final stages of a sale. Your
sellers won't have to worry that the buyer's inspection will reveal a
major problem they're unaware of (theoretically).For all these
reasons, seller's inspections are becoming more common. On the other
hand, they'll be legally required to disclose their inspection report to
buyers, so it's a bell that they can't un-ring. And different inspectors
find different things, so there's no guarantee you'll eliminate
surprises. If your sellers are particularly high strung or their house
is on the older side, a seller's inspection is probably valuable. If the
house is relatively new and they've been diligent with maintenance and
repairs, not so much.
Should agents attend the home inspection?
This is a personal call every agent has to make for themselves. In the
"pro" column, you'll know what was said, if and when your client gets
nervous. You'll also have a chance to evaluate the inspector for future
work. In the "con" column, you could make yourself a nuisance or expose
yourself to liability. As a new agent, you should probably attend at
least a few so you can make an informed decision about whether you
find it valuable to your clients. But when you attend, remember that
you're not an inspector. You'd hate it if the inspector tried
to do your job, right? So return the courtesy. Pointing out problems and
contradicting the inspector isn't just bad form. It also opens you up to
liability.
What happens if the inspection finds a problem?
The important thing to learn as an inspector is thorough and exacting.
There are a few ways the sale can go after an inspection:
- The buyer walks away. They're under their rights to
do so under certain circumstances. Your clients should reserve this
option for extreme problems: major structural issues, termite
infestations, severe water damage, and so on.
- The seller brings in experts. If the inspector's
findings seem to exaggerate a problem, sellers can bring in experts
to re-evaluate the problem. You should proceed down this road
carefully, and with reputable professionals, to avoid alienating the
buyer.
- The buyer asks to renegotiate. For medium-sized
issues, the seller should expect buyers to ask for either repairs or
a lower purchase price to cover the cost.
- The buyer accepts things as-is. If the only
problems are minor or cosmetic, the buyers might not bother
renegotiating.
Realistically, the condition of the housing market also impacts this
process.If it's a strong buyer's market, then buyers can demand
more concessions. If it's a hot seller's market, sellers can more easily
refuse.
The bottom line
Home inspections can be a nerve-wracking part of the home buying or
selling process. Your experience is invaluable for putting problems into
perspective and helping clients decide what they will and won't accept
during renegotiation. For QuickInspect, we add key words like, home Inspection software, home inspection reporting software, RV inspection software, and home inspector software. .