The condition of a home is one of the key elements in determining its
value. This is particularly true at a time of high and still rising prices.
In a seller's market, buyers have the double pressure of having to compete
with many others for the same house while trying to determine a reasonable
offer without knowing its true condition.
Like our bodies, systems in a home tend to wear down with time. Items
such as plumbing and electrical are not the most expensive. Drainage and
foundation, on the other hand, may run into tens of thousands of dollars.
During a general home inspection, the roof, heating, plumbing, electrical,
drainage, foundation, and framing systems, as well as other aspects, are
reviewed. Fewer than five percent of all new, local listings have a pre-sale
inspection report by a professional home inspector. In addition, many sellers
and their agents will not allow buyers to have their own pre-sale inspection
before writing a contract. This presents a real challenge for buyers.
Compounding matters, some buyers, prompted by perhaps 10 other offers
on the home they love, may feel compelled to waive inspections. I do not
recommend this risky strategy. Unless you have extensive contracting and/or
building experience in all the trades, I strongly suggest a professional
In this area, most homes on the market have a termite (structural pest
control) report. Although it may seem simple and straightforward, there
is a definite art to reading and interpreting what these reports say and
do not say.
For example, my buyers were interested in a property that had two termite
reports. The first totaled approximately $15,000; the second, by a different
company less than a year later, was under $2000. I was concerned because
the second report did not mention items from the first that I was told
had not been corrected.
I recommended to the buyers we investigate who did the work, what it
entailed, whether it was done under permit and why the first company was
not brought back to reinspect. Without experience and knowledgeable advice,
many buyers unknowingly walk into a black hole and find out only later
how widespread the termite issues really were.
Inspection reports completed during the escrow many times uncover problems
unknown to both the buyer and seller. At that point, especially with multiple
offers, sellers are often reluctant to take responsibility for the faults.
The buyer may be left with the unpleasant choice of taking on potentially
expensive defects or canceling the contract. An even worse scenario is
when the buyer chooses not to have inspections and discovers serious issues
after close of escrow.
Unlike a television or computer that is not functioning properly, you
cannot simply return a house once you own it. Although a seller is legally
obligated to disclose known problems, these disclosures do not substitute
for comprehensive inspections. Certain deficiencies can involve safety
as well as value, e.g., a cracked furnace heat exchanger. No matter how
excited you get about a particular property, remember that condition is