Home Inspections That Kill Deals

By
Services for Real Estate Pros with Realty Pilot

One necessary task licensed professionals face while coordinating deal closings is the property inspection.  

Imagine a buyer sits down at the title company ready to sign the paperwork. They're excited to finally buy their first home. The buyer used a family member who was a general contractor to do their home inspection. Unbeknownst to the buyer their general contractor was not experienced enough in detecting mold. In one of the bathrooms a shower stall was improperly installed causing mold inside the walls. The drywall along the edge of the baseboard showed minimal signs but not enough for an inexperienced inspector to question. Later extensive mold discovery cost the new owner $15,000 in unexpected repairs. Subsequent action: lawsuit city.

Some agents learn the hard way but most of us recommend our buyer clients obtain and pay for a whole-property inspection, preferably by a licensed property inspection company. Doing so not only increases integrity within our client relationship but minimizes our potential risk associated with a buyer who may claim the presence of unknown or undisclosed property defects at a later date.

At the opposite end of the inspection spectrum, utilizing an inspector who doesn’t understand or isn’t sensitive to how real estate sale transactions are consummated can blow deals right out of the water. It’s not uncommon for some inspectors to be overly concerned with their OWN liability, thus harping on or concentrating on relatively minor property condition issues and sending buyers into a panic.

The challenge in this arena arises when an agent recommends or “steers” a buyer to a specific inspector; to one in which the experienced agent has a mutually harmonious business relationship. The more deals an agent closes in time, the more savvy she becomes in learning to gauge those condition issues that truly command attention. This coupled with the agent’s understanding of her buyer’s property repair and improvement tolerance levels can be key aspects that can save a deal from unnecessarily falling apart.

A good practice, in order to minimize licensed agents from getting themselves into potential hot water with a real estate board complaint, is to provide the buyer client a list of several inspectors. Suggest the buyer contact each inspection company and inquire about the number of inspections the company has performed, how long the company has been in business, their fees, how quickly an inspection appointment can be met, how quickly the report will be available post inspection and how the report is provided to the customer. Good inspectors will be open to meeting with the selling agent and their client near the conclusion of the inspection to review issues of concern.

Major condition issues such as foundation defects, roofing structures, topography/drainage/slide concerns, etc. require additional expertise insight. Understandably, major condition issues such as these may warrant a deal termination by the buyer.

But for those buyer clients who are familiar with buying and selling real property, a selling agent should be good at guiding a client through repairs and improvements within the buyer’s personal comfort level. Yes, it’s about closing deals, but more importantly it’s about ensuring the interests of the agent are aligned with those of the principal.

Comments (3)

Deborah Laemmerhirt - REALTOR® Brookfield,Newtown,Roxbury,Bridgewater,Washington,Sherman
Keller Williams Luxury Homes International - Brookfield, CT
Luxury Homes,WaterFront,Equestrian,NewConstruction

It is important to give a few names whenever possible.  Not just for home inspectors but in out state, attorneys.  Thanks for sharing.

Mar 27, 2014 08:40 AM
Anonymous
Marianna Grindstaff

Great post. Please visit : http://www.rew-online.com/2012/10/09/lighstone-closes-on-51m-loan-for-lic-rental/

Nov 12, 2014 05:54 PM
#2
Anonymous
Marianna Grindstaff

http://www.rew-online.com/2012/10/09/lighstone-closes-on-51m-loan-for-lic-rental

Nov 12, 2014 05:55 PM
#3