Buyers Can Leverage Home Inspections to Get a Better Deal
It goes without saying that home buyers always want to pay as little as possible for their home. Typically, the time to do that is during price negotiations. Depending on where you live, brokers can usually haggle the price down around1% or 2%. At this point, most buyers assume the price is set, and the deal is done. It’s not. There remains an additional opportunity to lower the price. Unbeknownst to most buyers, home inspections can sometimes be leveraged to squeeze additional price concessions out of sellers.
Home inspectors: tire-kickers of real estate
Almost every home gets inspected before closing. Most mortgage lenders require it. Licensed home inspectors examine the guts and bones of a property. They want to determine if there are any structural or operational flaws in the home.
Inspectors look for problems that may not be apparent to the untrained eye. For example, most check a building’s foundation, electrical system, plumbing, roof, and drainage. They pay particular attention to water. While it may be the staff of life, for buildings it’s often a cancer that can cause severe damage.
Who picks and pays for the home inspection?
Buyers usually pay for and choose the home inspector. According to the Department of Housing and Urban Development, a typical home inspection costs between $300 – $500. Most buyers rely on their real estate agent to recommend one.
However, this can be a problem. It’s in the agent’s interest to close the deal as quickly as possible. The last thing they want is for an inspector to uncover costly problems that can kill the deal. While the majority of agents are honest, this built-in conflict of interest exists.
Sherlock Holmes
Buyers need a home inspector who operates like Sherlock Holmes. Thoroughness, doggedness and a detective’s eye for detail are a must. Unfortunately, many home inspectors are anything but thorough, and only do a cursory examination.
It’s not unusual for an inspector to stroll through a house, clipboard in hand, checking this thing and that – never getting underneath the home’s veneer. A lazy home inspector – or an out of shape one – will avoid climbing on a roof or getting down on their hands and knees to check a crawl space.
Bumbling Inspector Cousteau
A large number of home inspectors working today are like the bumbling Inspector Cousteau; clueless, inept and terrible at their job. But unlike Cousteau, who in the end, inadvertently solves the case, these inspectors don’t. And they can cost home buyers lots of money.
It’s hard to believe, but 18 states do not require a license to become a home inspector. In states that do, many educational and training requirements are often spotty, at best.
One study illustrates this problem. Consumer’s Checkbook, an independent non-profit advocacy group that rates local services, did an undercover investigation of home inspectors. What they found was shocking. Twelve inspectors were told to inspect a three-bedroom home that had 28 known problems.
According to the study’s findings, none of the inspectors performed very well. They uncovered only 50% of the problems. And all of the home inspectors were licensed.
How to find a Holmes and avoid a Cousteau
It’s not easy finding a really good home inspector. But there are ways to do it:
-Read reviews on Yelp, Google and Angie’s List
Online reviews are a good source of reference for determining if a home inspector is good, so-so or just a lazy slob. Look for inspectors that have lots of reviews and good ones.
-Pick an inspector who wants you around
Red flags should go up if an inspector doesn’t want you around during the inspection. This doesn’t mean that he’s just an unsociable kind of guy. Instead, it probably means he wants no one around to watch him do a half ass job.
-Ask for a sample report
Compare inspection reports and see who is the most thorough. Granted, they probably give you their “best” example, but not always. Sometimes the inspectors think the average person has no idea what these should contain. Do your homework and find out beforehand.
-Find out what won’t be on the report
What’s excluded from a home inspection report is as important as what’s included.
-Finally, find out if they are licensed or a member of ASHI, NAHI or other professional groups
While this is certainly no guarantee of thoroughness and professionalism, a person without these credentials should be looked at with a critical eye.
Creepy bugs, fury mold, and leaky pipes can pay off big time
Once the report is finished by a top-notch home inspector, review the things that need repairing or replacement, assuming there are any (there usually are). Skip the little things. Tally up the cost. Get estimates from high-end service providers. This will inflate the repair bill and cover you if something unforeseen is uncovered.
Have your agent speak with the buyer’s agent. Say that for the deal to close, the price of the home must be reduced to cover these costs and more. You also want to be compensated for the “hassle factor.” Don’t be shy about asking a lot. Who wants workmen around hammering away in their newly bought house? In all likelihood, the buyer will acquiesce, particularly in this down market where buyers are hard to find.
This is one of the few times where unsightly mold, furry mildew, and small rodents can put money in your pocket.
The post Buyers Can Leverage Home Inspections to Get a Better Deal appeared first on ELIKA insider.
