Home Inspections: A Good Idea or Buying Trouble?

I doubt any home buyers out there would argue against the usefulness of a good home inspection prior to their signing on the dotted line to buy a house.  A growing trend, however, is for homeowners to have their home inspected prior to putting it on the market. Given the disclosure obligations, some homeowners would rather than beg for more trouble. After all, you don't have to disclose what you don't know.

The problem with that thinking is that is just puts trouble off until the most importune time. As a transactional lawyer I've seen many business transactions fall apart due to unpleasant surprises that come up shortly before closing. No one likes ugly surprises and the reaction to such surprises is never good. Ironically, and many instances, had the bad information been known from the get go, the deal could have been structured differently to address the issue and the deal could have closed to every one's satisfaction. It's that untimely surprise element, that makes the situation so much worse.

In today's market, where many buyers insist on a home inspection before signing a contract and an increasing number of cities are requiring inspections before home sales can proceed to closing, a wise seller gets out in front of potential issues by obtaining a home inspection well in advance of listing the property.  Serious code-violating issues and other potential sale-killing issues can be addressed on a less urgent time line, allowing for multiple quotes and without up charges for a rush job. 

Other issues that the seller chooses not to repair can still be negotiated from a position of knowledge, as the seller can obtain quotes for the repairs ahead of time to use in his or her negotiations with a buyer.  This can be particularly useful as buyers, when discovering there will be more work required on the house than they anticipated, will often demand purchase price reductions that exceed the true cost of repair. Further, when a buyer puts in a bid on a home, having full knowledge of the issues, the bid is more solid and less subject to change.

When choosing a home inspector, whether you are selling or buying, do your homework. Just watch one or two episodes of "Holmes Inspection" and you will quickly learn that not all home inspectors are worth the money they charge.

If you are a home inspector, keep in mind who is hiring you. If you are conducting a home inspection for a homeowner about to go on the market, it's important to know if the homeowner intends to share copies of your report to potential buyers. If so, you may want to incorporate language in any agreement with the seller and into the inspection report that makes it clear who may and may not rely on the report.  It is not unheard of for a third party to sue a home inspector based on some item not being addressed in the report despite the fact that the home inspector was hired by someone else and had no contractual relationship with that third party.

Bottom line, while home inspections are not always mistake-free and can raise unwelcome issues, I, for would still obtain the inspection before putting my home on the market.

No comments :