The Inspection: Abused as Negotiating Tool?

The games people play....

If it sounds reasonable, it probably is....
If both sides are a little grumpy about the inspection requests, its probably fair. (Buyer Doesn'd Get Enough, Seller Gives Up Too Much)

Educating the client is the key, on both sides of the transaction.

I hate one company in our area who advises their agents to only use AS IS contracts, which give the buyer an easy way to walk out of the contract, with the intention of renegotiating everything at the inspection. Having that as your intent, while selling the "as is", to me is unethical. 

Very true Gerhard!  I think it is more of a negotiation tool than what it's supposed to be.  Some home inspectors butcher the homes up to and scare clients badly.  We serve as mediators.

Home inspections are relatively new to some areas of my market.  I believe I did one of the first home inspections in Southern Maryland in 1992.  In more affluent areas around DC, they were popular before the 1900s, but not as prevelent as today. 

I believed then and believe now, that the home inspection is one of the most important aspect of our representation of buyer or seller. 

Few agents truly understand the home inspection dynamic until they receive one of our Home Inspection Notice documents. 

My goal is (1) contract compliance, (2) disclosure requirements, (3) fair value.

We don't renegotiate the contract, just make sure that the buyer is getting what they paid for IN THE CONTRACT.

I'll write a blog about how we do home inspections.  It's an adventure. 

Hi Gerhard,

            Great point, educating the buyer and the seller in the beginning stages will help reduce problems along the way.

I like certain home inspectors in our area that present the inspection as more of an educational process of owning a home. They point out problems but don't present it in a way that ALARMS the buyer 

We have one inspector that usually uses the phrase "this is not a deal killer" when explaining flaws.

 You are absolutely correct when you said the home inspection is done this is when the truth comes out.

Good job, Thanks Jay 

I have had some bad and good experiences with home inspections.  I am proud to say I have never lost a deal on the buy side as a result of home inspection because i tell my buyers up front that it is NOT a tool to renegotiate the price unless something seriously mechanical is wrong ie roof is at the end of its life, plumbing problems, safety hazards etc.  I am now used to hearing buyers say well we can get more money off at the inspection right?  NO, if there are problems we will negotiate repairs and credits that are fair, we will not get 10,000 off for a broken window.

But on the other side I have buyers and their agents do just that.  I had a deal come apart because the buyers wanted a credit because their were vines on the side of the house and the home inspector wrote that there was cat urine on the DR carpet.  What he didnt know was that the carpet was brand new just installed a couple of days before and the cat out front wasnt my sellers.  There were over 30 items listed on the request and the home was the least priced house in any area in our market.  The biggest thing about it was the home inspector wrote on every issue-needs to be evaluated by a licensed professional.  What were the buyers paying him for?  He didnt want to take any responsibility because the buyers were using him to get out of the deal. 

I have a few inspectors that i like because they dont make a big deal about every little item unless it is a big deal.  And they educate buyers along the way.  I have been advised recently however to not recommend anyone because if something were to go wrong the buyer can come back and say the I told them to use that particular inspector. 

Do you refer specific inspectors to your clients?

A while back I lost a deal after an inspection from hell that not only scared the buyer but also upset the seller because of the inspector's attitude.  The inspector had picked apart the home (almost 30 years old) so much that the buyer wasn't able to distinguish the necessary from the would-be-nice/cosmetic and his agent didn't seem to help much.  When it came right down to it, the inspection revealed a few items that needed attention that the seller was fully prepared to comply with although it exceeded the repair limit.  Ironically, a subsequent inspection by another home inspector found a couple of minor things that the first guy had missed. 

I give my customers a list of three inspectors to choose from and encourage them to interview these people themselves.  However, don't blame me for not including inspectors on this list who I have had negative experiences with.

• You'll see your home through the eyes of an impartial third-party.
• You'll be able to price your home realistically.
• You'll be able to make repairs ahead of time.
• Your buyer may waive their inspection.
• You'll learn about items of immediate personal concern, such as unsafe electrical or an improperly vented furnace.                                     
• You may relieve your prospect's concerns and suspicions.
• Your liability is reduced by adding professional supporting documentation to your disclosure statement.

it seems like it's mostly used as a negociation tactic as well. it definitely is one of the major deal breakers as i have came to understand.

cheers,

 cindy