| | 6. The Home Inspection & Termite Report Introduction
Seller Responsibility
Choosing an inspector
Who pays for the inspection and how much does it cost?
Inspection Day
The Home Inspection Report.
Problems with the property: Where you stand
Required Repairs: Points to consider
Is a Termite Inspection required?
Who picks the Termite Inspector?
Termite Inspection on condominiums or townhouses Introduction
Any home, new or used, will have minor problems. For instance, an electrical outlet may not work, there may be a leaking faucet or maybe roof, one of the appliances may not work. The purpose of a home inspection is to insure you are aware of all problems and potential problems with a home before you buy. A seller is required in most cases to make the necessary repairs to insure everything is in working order. You or your realtor should schedule a home inspection immediately after acceptance of an offer to purchase. Basically the inspector will check the home from the roof to the foundation and everything in between. He will run the dishwasher, check the heating and cooling systems, check the plumbing, electrical, check for leaks, etc. He will give you and/or your agent a written report on the spot or fax or mail the report within 2 or 3 days. At you or your agent’s request the seller or seller’s agent will be given a copy of the report as well. You may want or need to also have a separate roof inspection. If you are purchasing a home on the water, you will want to have a seawall inspection done as well. (Damage to seawalls, docks and swimming pools are not covered by flood insurance.) If you want to have inspections for radon, lead-based paint, environmental hazards, etc. You will need to have these completed within the same period. Pest control inspections are generally not done until 30 days before closing, due to lender requirements. In many cases the home inspection company may be a licensed pest control company as well. It would not be prudent for a homebuyer to forego a home inspection before purchasing a home. Under Virginia law the seller must disclose (seller’s disclosure) to the buyer all known facts that materially and adversely affect the value of the property being sold and that are not readily observable. The key word is known. Your agent should ask for this disclosure before you put in an offer. There are often things wrong with the home that the seller may not know about. The home inspection checks the interior and exterior of the home, goes up into the attic space, and goes in the crawl space, if there is one. The price of a home inspection will vary with the size of home and with the amenities of the home (crawlspace, pool, etc.). Expect to pay anywhere from $250 to $500.Seller Responsibility
The inspection is done to determine whether any warranted items are in need of repair. Generally the seller warrants that the structure (including roofs and pool) are structurally sound and are watertight, and that the appliances, heating, cooling, mechanical, electrical, security, sprinkler, plumbing systems, seawall, dock and pool equipment, if any, are in working condition and will be maintained in working condition until closing. The seller does not warrant and is not required to repair cosmetic conditions (unless the cosmetic condition resulted from a defect in a warranted item). Cosmetic conditions means aesthetic imperfections that do not affect the working condition of the item, such as tears, worn spots and discoloration of items such as floor coverings, wallpapers, window treatments; nail holes, scratches, dents, scrapes, chips and caulking in bathroom ceilings, walls, flooring, tile, fixtures, mirrors; tears or holes in screens; and minor cracks in windows, driveways, sidewalks, pool decks, garage and patio floors. The seller is not obligated to bring any items into compliance with existing building code regulations (unless necessary to repair a warranted item). Codes are constantly changing, and vary from one municipality to another. If the item was installed properly under the code existing at the time of installation no more can be required. The inspector will point out items that he recommends bringing to current code, such as GFI (ground fault interrupt) outlets, but this is a buyer option, not a seller requirement. Note that most contracts provide that a licensed contractor or repair person must do any repairs. Items commonly noted in an inspection: - Electrical panel: a fuse that is double lugged.
- Pool equipment and/or screen enclosure that needs to be grounded.
- Faucet that will not turn completely off.
- Outlet that does not have power.
Choosing an inspector
Be sure the inspector you hire is licensed and certified. Does he belong to a professional association such as ASHI? What are the qualifications and background of the person actually doing the inspection? How long has he been doing inspections? What type of report does he prepare? Does he distinguish between comments that are general and those that are specific to your property? Does he welcome you to be there during the inspection? Is he willing to answer questions as he goes along, and to explain how things work? Will he differentiate observations from problems? To what extent does he stand behind his work? Ask your agent for a list of home inspectors as well as checking the yellow pages. Also ask friends, family and co-workers for a referral. Do not just rely on your agent to arrange for the inspection especially if you have any doubts. Recently, in the news there were stories about home inspectors working with real agents to the detriment of their clients. The agents instructed the inspectors to not disclose all of the problems in a home because they wanted to make sure the deal closed so they would get paid. In return the agents would send more business to the inspector. Make sure you are comfortable with the inspector. Feel free to ask for a list of recent clients and call them to see if they were happy with the inspector. One last thing, make sure that your home inspector has E&O insurance. You want to be able to recover damages from his insurance company if there is negligence or fraud. Protect yourself. Who pays for the inspection and how much does it cost?
The buyer pays for the home inspection. You pick him and you pay him. You want an independent opinion as to the true condition of the property. Most inspectors charge about $200 to $300 for a condo and about $250-$500 for a house. Of course larger properties with 2 or more stories, larger square footage, or older homes that are in very poor condition can be higher. Always describe the property accurately to the inspector in order to get an accurate price quote. Inspection Day
When the day of the inspection comes, make sure to be present as your inspector inspects the property. This way you can ask him any pertinent questions about the home. It's not necessary to shadow him as he does his inspection, but when he is finished have him show you all the defects he finds with the property. Most inspections take about 1.5 – 2 hours for an average house. The Home Inspection Report
Go through the report carefully when you receive it. Make sure your agent has a copy as well. Then decide which defects you can live with and which you can not. Work with your agent to determine which repairs you would like the seller to correct. When you have decided, have your agent send a letter to the seller's agent asking for repairs. Here's what I typically tell my clients: you are buying a used home with all of its accumulated defects and problems. It's not perfect. Don't ask a seller to fix or paint minor problems. However, if the air conditioner has problems or one of the appliances doesn’t work, I would want those items to be fixed. Keep in mind the market conditions, and the seller's situation. If you are in a hot market with rising property values and there were multiple offers on the property then the seller will probably not want to spend time or money on repairs. You've got to decide at that point how much you want the house, especially if there is someone else waiting in the wings if your deal falls apart. In a slower market, a buyer has more leverage to ask for repairs. A seller who is highly motivated will fall over himself to get the property repaired and keep the deal on track. The bottom line is to work closely with your agent and rely on his professional opinion. Problems with the property: Where you stand
If there are significant problems such as a damaged foundation, a severely damaged roof, or plumbing that is shot, I always recommend that the buyer get a specialist out to examine the damage and get an estimate to repair the problem. Your home inspector is only an inspector. He generally should not be doing repairs or giving cost estimates. That is a conflict of interest. In Virginia the sales contract usually specifies the $ amount of any required repairs the seller will undertake. If required repairs exceed the amount specified, the seller may agree to pay for these repairs, the buyer may accept the home without the repairs that exceed the amount specified or the buyer may back out of the contract. Refer above to Seller Responsibility, to understand what would fall under required repairs. Many buyers think cosmetic problems, such as cracked floor tiles or roof tiles must be repaired, which is not the case. Talk to your agent to fully understand what are warranted items. You cannot back out of a contract because you think an item should be repaired but the seller does not agree. If you are unsure about the condition or quality of a home talk to your agent. There are ways to further address or protect your interests by adding the right language or addendum to the sales contract. Required Repairs: Points to consider
If possible I would recommend taking a cash credit for repairs instead of having the seller do the repairs. Sellers will always try to do the repairs as cheaply as possible and chances are that you won't be happy with the quality of the work. Simply take the estimate you got from the contractor who gave the estimate and have your agent send a letter to the seller's agent requesting a cash credit at closing. Usually there is a bit of negotiating at this point. Sellers like to split the cost of repairs with the buyers. If you ask for a thousand, they'll offer five hundred. Ask for your agent's opinion and do what makes sense to you. Common sense goes a long way.
Is a Termite Inspection required?
A termite inspection is not always required. However, most of the time it is performed. One of the main reasons is that most lenders making the loan require a pest inspection and repairs if there is damage. As a buyer, I would certainly require an inspection and repairs to be done. Who picks the Termite Inspector?
Generally the buyer (or the buyer's agent) picks the termite inspector since they will be paying for it. In many cases the company doing the inspection of the home may also be licensed to do the termite inspection. Termite Inspection on condominiums or townhouses
The type of structure determines if an inspection is required. Typically the HOA (Homeowners Association) is responsible for termite issues in the common areas and exterior of your condo. It is fairly uncommon for a termite company to recommend tenting a condo building when a sale occurs. Usually the HOA will contract with a termite company for periodic inspections and maintenance. In most cases a termite inspection is not required for a condo. However, some lenders still may require a complete termite report and clearance for condos. Check with the condo homeowner's association to see what their termite policy is. | |
