After watching two recent contracts die because of home inspections, (plus two others in the past 1-2 years), I figure it's well past time to examine the current reality a bit more closely. Maybe it's just another reflection of the dizzying buyers' market, but we're seeing stuff we just haven't before. One inspector wrote a couple of pages of flaws in electrical wiring.....which had been done by one the region's most respected and licensed electrical firms, to code and then some. There was a lot more to that story....suffice it to say I was able to comb through the verbage and counter much of what was written on my own. But the bottom line is that the buyer got skittish and walked. Guess that means I can also hang out a shingle that says I'm a home inspector....and by golly, I can!
Had an inspector a while back blow a sale on probably one of the best-built homes we've ever listed. He questioned wiring....for a home that had been built for a licensed electrician, who had used another licensed company to assist. He employed other basically bogus methods of "inspecting," and then proceeded to make offhand comments that completely spooked the young buyers and their parents. Of course, he had qualified himself as competent because he had worked in the construction trades, and had professional inspector credentials. Another agent yesterday informed me of a similar situation that stopped his clients in their search tracks; in this case, two home sales are not to be.
It also begs questions about disclosure after the fact. So after talking to some agents, I also discussed it with a practicing attorney who also happens to hold a real estate license....his legal persepective about home inspections in Ohio is that they are nothing more than opinions, unless conducted by a professional engineer (P.E.). And the reality is that few inspectors carry that sort of certification (and they charge accordingly....also a concern when buyers realize they'll be paying $400-500 for the inspection sale or no sale. There's also the matter of limited liability, usually limited to the cost of the inspection itself on contracts I've seen. As someone else noted, "what's that say about the value of an inspector's opinion?"
So let's say you've got a home inspection and subsequent blown contract, and you're now thinking new residenial property disclosure form. What to advise your client? The attorney we talked to said, opinions are like ___________, everyone has one. And a non-engineer home inspector's report is not, in his estimation, anything close to expert....so don't worry about the disclosures, he suggests, unless you have evidence of an immediate problem in need of a repair. He, along with a very respected to-the-letter-of-the-code-and-beyond homebuilder I also spoke with, also noted that all the inspection reports they read tend to be couched in very vague or evasive language.....likely indicating an admission of being expertise-challenged, or at least being driven primarily by liability fears. That's hardly an encouraging situation for either buyer or seller.
Another side of the legal advice advised disclose, disclose, disclose....no matter what, if you've got an inspector's written word. But isn't there any right to doubt or rule out an inspector's incompetence? Of course you can get another inspection (full or perhaps just a walkaround "pre-inspection")....but that could also put your client in a bind, depending on what comes up. The house could be re-activated under "as-is" status, but consider the red flags that phrase raises. There's usually no clear answer under the circumstances. It does suggest that agents spend more time upfront with sellers about the wisdom of pre-inspections in today's market.
Some of my best friends, as they say, are home inspectors.....so I'm not anti-inspections; we represent buyers as well as sellers and work with a number of inspectors we consider competent and then some. But unfortunately, we have no control over what caliber of inspector another agent brings to the table (and lest we forget, about only 20% of agents stay in the profession beyond 2 years). But as one of my friendly home inspectors said at a recent seminar.....get out and support HB 257. While there are interesting differences of opinion about licensing or certifying home inspectors, if a real estate agent has to be licensed (and thereby held fully financially accountable), why not a home inspector? After all, we're talking about most folks' biggest single investment.
©2008, Doug Parker, ikarensell Enterprises Inc. http://www.ikarensell.com
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