Monday, July 1, 2013

Tips for Buyers when evaluating an Inspection

Rod Sager

It is highly recommended that a buyer have an inspection completed by a licensed inspector before committing to a purchase. Here in Washington state we have a special form that typically accompanies an offer allowing the buyer to conduct and evaluate an inspection to determine that the house is suitable, safe and in good repair.

The primary purpose of the inspection is to have the house thoroughly reviewed by a professional that uses a standardized method of inspection. The inspector follows a procedure that is designed to make certain "no stone is left unturned". The buyer should use the information obtained in the report to determine several things. First, are there any genuine safety issues or serious defects that must be addressed prior to close? Second, are there issues that may affect the ability to finance the property? These two issues should be the buyer's primary concern. These are the items to ask the seller to remedy. Third, are the items that may be marginal or even defective but do not warrant the risk of launching a torpedo into the deal. It is a seller's market here in Southwest Washington as it is an many markets and seller's control the tempo of deal at the moment.

Buyers that ask for every little detail on the inspection report will likely find themselves looking for a new house over and over again. Inspections are designed to protect the buyer from serious hazards and excessive expenses, not to beat up the seller with the classic nickel and dime items. A notable exception might be a new construction home where the builder is on site and often willing attend to minor details since the expectation on a new home is rightfully higher.

Items that are generally of serious concern are things like, the roof, furnace, serious dry rot, wood destroying pests, etc. Financing a home using a government backed loan such as USDA, FHA or VA can also require some effort by the seller to comply. These loans require that no earth make contact with wood, crawl space vents are clear and secure, roof is in good shape with a 3-5 year life expectancy, no vegetation in contact with the siding, etc.

The remaining items of minor nature on the inspection report can be used as a "honey-do" list of things to tidy up after the buyer moves in. In our market we are seeing rising prices and interest rates. If a buyer crashes his deal on minor items that cost a few hundred dollars or even a thousand, they may very well pay more than that in higher home prices and monthly payments due to those increasing. A price increase of just one half of one percent on a $200,000 home is $1000 and we have seen prices rising at a rate closer to one percent per month over the last twelve months. It can be counter-productive for a buyer to kill a deal over the little stuff.

When evaluating your inspection try to keep everything in perspective. Keep in mind the idea of protecting yourself from exposure to serious expense or danger rather than nit-picking the seller. Look at the big picture before pounding the seller over that loose light switch cover the inspector found. This will help to ensure a smooth transaction and a more pleasant experience for all parties.

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