Should you accept a home inspection provided by the Seller?
ABC Home Inspections
845-CallMeSeller provided, home inspections, often referred to as Certified or Move-In Ready or something to that effect, were invented by home inspector associations as a means of attracting business. The concept is actually good. The Seller learns of possible issues which may affect their ability to sell the home and allows them time to make needed repairs prior to listing the home for sale. The realtor is able to market the home under the impression the home is marketable. The buyer gets the impression the home is Move-In Ready a/k/a “I’m not buying a money pit”. The intent of this concept is good. However, we all know the road to hell is paved with good intentions. What if the Seller didn’t make the repairs or make them properly? What constitutes, “Move-In Ready”? The 45 year old electrical panel may be functional but difficult to insure; the Seller replaced some damaged shingles but the insurance carrier will not write the roof because it is over 18 years old. I believe most buyers would consider Move-In Ready means “No Issues” while most sellers would consider this as “Acceptable for Age and Condition”. What defects or issues did the inspector include in the report? If issues were found but not corrected properly, who is responsible? Some issues presented by the inspector may not be required repairs under the real estate sales contract such as FAR or CRSP. This can create confusion. Sellers will naturally discount the importance of repairs or deferred maintenance while buyers will tend to exaggerate them. The expectations are different. The key issue with “Certified” or “Move-In Ready” or “Inspected” home tags lies in the expectations of what these terms mean to the public and in a court of law. I have not found a real estate attorney who recommends these inspections yet there are realtors who market homes as “Inspected” as well as corporations such as Fannie Mae who markets homes as “ready” under the Homepath program or most large investment companies (REIC’s) who buy distressed/foreclosed homes with investor money on large scales. These typically include some type of home warranty and the homes have been rehabilitated with new appliances, roofs, etc. It is not quite the same thing. So, is a Seller provided home inspection a good thing? Maybe. Is it a bad thing? Maybe. The devil is always in the details and buyers’ should be cautious in accepting them.
What should a pre-listing inspection provide to the Seller?1. Identify deferred maintenance issues and allow them the opportunity to make repairs. These items would typically include clogged gutters, minor water damage to exterior doors/trim, torn window screens, cracked window glass, missing weather strip on doors, loose tile/carpet, caulking, etc. Maintenance items which should be repaired before listing. 2. Issues with the HVAC system such as damaged ducts, dirty filters or coils. Sellers should always have the system checked and serviced prior to listing. 3. Roof age and condition. Asphalt shingles over 18 years old and flat roofs over ten years old are difficult to insure. 4. Identification of plumbing issues to include aged piping/water heater which may affect the insurability of the home. 5. Issues with the electrical system to include aged wiring/main panels which may affect the insurability of the home. 6. Issues with the lot grading or vegetation which may affect the insurability of the home. 7. Verification of all public building permits for roof, plumbing, electrical, HVAC, additions and the status of those permits. In our opinion, this report should not be transferrable to anyone other than the Seller and this report should be used by the Seller to address listed issues in preparation for listing the home for sale. Does this mean the Seller is obligated to address/repair deficiencies noted? No, as this report is for the Seller’s use only and should be used to provide information about factors which may affect their ability to sell the home. The Seller can always list the home “AS IS” while knowing these conditions may affect the market price. This information can be shared with the listing agent for disclosure purposes or to assist in determining a fair market price with these conditions. This may save time, resources and frustration on behalf of the seller and listing agent.
When should a buyer accept a “Move In” type inspection report?If you do, you should exercise caution. If deficiencies are listed but the Seller claims repairs were made, were the repairs verified? If they involved electrical, plumbing, HVAC, roofing, window or door replacement or structural repairs, were the repairs properly permitted and inspected by the building department? How old is the inspection report? Have there been any major storms since the report? Will the inspector update the report in your name and therefore stand behind the report? If you are not comfortable with any of these scenarios, hire your own inspector.
The Building Inspector