| > OREP Home Inspector E&O/GL Insurance- To apply, quote, and purchase in minutes. Minimum premium $1,000- most coverages included. “A” Admitted Carrier. Shop Now!
Smart Homebuyers Always Hire Home Inspectors
By Phillip Gilliam
I have known people that have spent tens of thousands of dollars after buying a home, all because they choose to not have a home inspection done before closing a deal on a new house. Let me make this very clear, a home inspection is an indispensable part of buying a new property, and if you choose not to get it done you have no one but yourself to blame if you end up buying a money pit.
Before you and your family move into a new home, the last thing you would want to hear is, “at your own risk”. Well that’s exactly what you will hear if you choose to opt out of a home inspection before signing on the dotted line to buy a new home, and instead choose to move your family into an uninspected property. Not a good choice to make, in my opinion.
Trust But Verify For Yourself
A good real estate agent will always recommend a home inspection, and you should be very concerned if you do NOT receive a recommendation to get a home inspection from your real estate agent; this should be a HUGE red flag!
Before I provide you with a real world example of a situation that I have personally witnessed myself, let’s review why a home inspection is so valuable.
A home inspector that is qualified to inspect the whole property will comb all of the accessible and visible areas of the property. They will point out any health and safety issues, negative or positive conditional problems with the property, and lastly report on any particular conditions of the house that need urgent or special attention.
All this includes a proper structural review of the foundation, roof, walls, insulation, doors, windows, basement or crawlspace and even an attic. Key elements that are always inspected in this process include the plumbing, electrical, cooling and heating systems. Once the property is inspected, a comprehensive written report is drafted detailing all the issues that are not only urgent and need your attention, but also any potential issues you could have in the future. For example with the roof, detailing and estimate of how many more years the house is expect to have before needing to have the roof replaced.
Another important aspect to mention about any home inspection is that it also lets you know if there is any evidence of termites. If there is any early evidence of these nasty little bugs around the property, you definitely will want to know about it before deciding to purchase the home.
Now, if you’re a first time buyer, let me tell you that a home inspection is not a pass or fail process. There could be as many as 40 issues of which the inspector thinks you should be aware, and while this may seem like a lot, it is completely normal. It then becomes your job and responsibility to use any of these issues to either negotiate a better deal for you, or simply buy the home “As Is”. You can also use the report to negotiate with the seller to fix any of the problems first before you decide to purchase the home at the agreed upon price.
(story continues below)
This comprehensive report is not a warranty because it is obviously impossible for the home inspector to predict future issues that could possibly happen. Based on the inspectors qualifications, he may let you know that the water heater may have a few years left, or the roof has been replaced recently and not to worry about it for another 15 years. But these are often very subjective opinions and should never be taken as concrete, because through the years I have experienced different results from different home inspectors on the very same home. So what you should hope to receive is essentially a report on the particular elements of the property we detailed earlier, and to have a good idea what problems or repairs you can expect in the home you are considering.
A Personal Real World Nightmare to Remember When You Are Buying Your Next Home
Let me give you one particular example of a friend; let’s call him John, who decided to buy a $250,000 home in the northeast of the United States. His real estate agent sold him on the idea of purchasing the house for $220,000 if he decided to not get a home inspection. I simply could not believe what he chose to do next. Unfortunately he decided to take the deal and buy the house with no home inspection.
By the way, did I mention that the home was built in 1963? That is right; his real estate agent encouraged him to buy a home built in 1963 with a $30k discount if he bought the house without a home inspection!
Well, I am sure that you can probably imagine what happened next.
The home is located in a heavily populated urban area, which means there are many regulations and many residential building and electrical code guidelines that govern homes in that area.
One rule from the insurance companies in that area is they require the home to be insured before anyone is allowed to move into the property. No insurance; no living inside the house. So after closing on the home, when the insurance company’s home inspector came to make a thorough review of the property, sadly John didn’t receive good news. The electrical wiring of the home had been done by the previous home owner and it was NOT done to code. Unfortunately, John’s nightmare was just getting started.
John had set aside around $10k dollars to get some upgrades that his wife and he wanted to do to the house to spruce it up a bit and make it more modern and attractive. Well the electrician that he now had to hire to get the home up to code so that he could move his family into the house told John that the electrical job was going to cost $18,000! Let me assure you; John was not happy! Also, as the wire was actually run throughout the house to bring it up to code, additional new wiring related issues were discovered, and the total electrical wiring required for the whole house to be insured ended up costing John $25,000.
So much for the $30k discount on the listed price of the property, right? Also the additional cost was definitely not an expense anyone would want to experience right after they have just decided to take out a $220,000 mortgage for a piece of property. Also, after the additional expense of the wiring, John was unable to make the $10k in upgrades that he and his wife originally intended to install.
While I know that this is an extreme example of a new home buyer choosing to skip a home inspection and getting burned, however, believe me when I tell you that this happens every day across the United States. The part of this story that really makes my blood pressure boil is the fact that the real estate agent suggested skipping the home inspection for a lower price on the home.
Why would John’s agent do something that I personally consider so very irresponsible? Because in my personal opinion, this particular real estate agent was only interested in selling the property and did not have John’s interest as their most important objective. John was a first time home buyer, and although his older brother was a successful investor in residential real estate, John had decided to “go it alone” and buy his first home on his own, and in doing so, decided to trust the real estate agent rather than those around him. It is a mistake that he regrets to this day.
Where To Find A Home Inspector
Your real estate agent will usually have a few suggestions of local home inspectors for you to call and schedule for a home inspection. A home inspection should cost well under $1,000 for a comprehensive written report, but the price will vary based on where you live. You can also check for a home inspector by going on the website for “International Association of Certified Home Inspectors” to get started if you prefer to find a home inspector on your own.
Home inspections should be always be left to qualified professionals because the average individual simply does not have plumbing, electrical and structural experience to inspect the property themselves. This is especially true when you combine this fact along with the emotional aspect of buying a new property, and because your judgement will be impacted tremendously by your desire for owning the home. So we hope now, after reading this sad tale of woe, you see why you should never be tempted to make your own inspection analysis on your new home, and why you should leave it to the professionals to give you a helping hand.
The key issue to remember is that the more information you have on the property, the more sensible and objective decision you can make for your family’s next home.
About the Author
Phillip Gilliam is has been writing articles on real estate for many years and is recognized as an expert author in an extensive and diverse range of topics and subjects. Phil has also been developing, selling and marketing a wide range of business, financial and technical products since the beginning of his career. www.hausvu.com
> Free Webinar: Claims and Complaints: How to Stay Out of Trouble
Presenter: David Brauner, Senior Insurance Broker OREP
David Brauner, Senior Broker at OREP, shares insights and advice gained over 20+ years of providing E&O insurance for inspectors, showing you how to protect yourself and your business. Watch Now!