The Home Inspection Business has been a mainstay in many staters for decades. It has been popular in Lower Michigan now for over 20 years. In the Upper Peninsula though, it really began to take off in late 2006 when I first began promoting myself as an inspector in the UP. I was in a good position to advocate on behalf of this service because I had been doing home inspections in Wisconsin for years and had first gotten my state license there in 1999.
One of my goals was to meet most of the Realtors and Bankers in my area, and help them to understand the important role the home inspector has in the closing process. Another goal was to provide the best inspection software, coupled with an awesome website that would be a convenience for my customers. I did accomplish both of these goals in 2007, and have never had to look back.
But, back to our topic. If I am buying a home, should I get it inspected? What is in it for me? Will it be thorough? Will it cost much? Is it worth the time and effort? Can't I just spend some time looking through the house and find any issues myself? Would asking for an inspection upset my Realtor or the seller?
And, on the flip side of this, if I am a Realtor representing the buyer, should I suggest he/she get a home inspection? What if any deficiencies found scare my buyer? What if the home is vacant and the seller doesn't want to pay for the utilities to be turned on? Is it a good idea to uncover things beyond the required disclosures? What if (and this is a big one) the inspector "kills" my deal?
OK, lets take a look at all of these issues starting first from the perspective of the buyer and then of the Realtor.
When you buy a home, there will be items that need repair, have not been well maintained over the years, or are in need of replacement. If you think all of these items will be listed on the disclosure statement, consider the following. A few years ago, several high profile court cases in Wisconsin's Supreme Court were decided, which codified into law...basically...the issue of caveat emptier. In Below v.
Norton, the court dismissed the fraud lawsuit claiming it did not meet the criteria for the ELD or Economic Loss Doctrine. In other words, you can no longer sue for fraud in Wisconsin if a seller misrepresents or lies about the condition of a home. In that particular case, the sewer line was broken where it went out to the street. The court cited caveat emptier as a duty of the buyer. I am not aware if such cases have been settled yet in Michigan, but you can see the trend, which is consistent in many states.
So, if a deficency is not listed on the disclosure, you may not have the court on your side later on. Also, understand that disclosures are somewhat easy to get around. The language requires the seller to list those items or issues (on the list) which they have specific knowledge are not working, damaged, ect.. but if they claim to have no knowledge, it is difficult to prove. Also, If the owner has never personally lived in the home, they do not need to claim knowledge of any issues.
Therefore, a close look at the home is essential. A trained and "licensed" home inspector knows exactly what to look for. Understand, you can't just spend a day or two milling around the home...usually...looking for issues. You will have several hours at most. A good home inspector has a trained eye, and a methodical process he goes through to evaluate the home's condition. Michigan is an interesting state, in that no standards exist for home inspectors. There is no licensing body and no training requirements. Many inspectors do have a background in construction, which is good, but may lack the specific training a home inspector needs. To find a competent home inspector, first, find one who is "licensed" in another state such as myself. If you can't find one, then consider hiring one who is a member of ASHI or NAHI, both of which do have some standards for membership...lower though than what state licensing bodies require.
The cost may depend upon a few factors, but will average around $300.00 to $350.00. Most often, when issues are found that are not disclosed, the seller will fix all or some of them, or give consideration for the deficencies. What they are required to do is another matter. Generally though, the buyer and the seller work togather and agree on a plan to correct the items found during the inspection. It is always money well spent for the buyer if he/she hires a good inspector. There is a contingency clause in the purchase agreement that gives the buyer the right to have an inspection done. Some Realtors will point this out to you, some will even suggest it.
Now, from the point of view of a Realtor, lets consider a couple things. We both know it is to your advantage to have your client get the home inspected, because you will not be aware of all the issues that will come up later and the buyer will come back knocking on your door. True, an inexperienced inspector could scare away a client with some minor deficiencies. But, since you are often the one recommending the inspector, it is up to you to make sure your client gets one who is properly trained. In doing this, you will transfer much of the potential liability, and you will be truly advocating for your client. Yes, in rare cases, there will be major issues that will kill a deal. What would you rather have...a client who bought a home from you with no adverse disclosures...to later find that the east wall of the basement (which had been insulated) is caving in? Or a client who walked away from that home and purchased a different one from you, who is now quite happy and recommends you to all his/her co-workers and friends and family?
Regarding the issue of utilities, I know this is a sticking point with some sellers, especially banks. It is more difficult to turn them on in the winter when a home has been winterized. Still, not being able to evaluate the plumbing system, the electrical or the furnace or to see if any of the windows leak, the fans operate properly ect...really limits the scope of the inspection. In fairness to the buyer, the utilities should always be turned on at the time of the inspection. In my view, the seller should take responsibility for this as well as re-winterizing, if necessary.
I would like to hear your opinions on both sides of this issue. Of course, that is what this discussion forum is all about.
Comments(4)