They Buyer's Due Diligence

By
Home Inspector with Charles Buell Inspections Inc.


There seems to be a general misconception among some home buyers that the hiring of a home inspector is the completion of their due diligence, when in many respects it is just the beginning—or at best just part of the process.

The home inspector will expose the concerns, but often they will not be able to allay justifiable concerns related to those findings.

BullThe problems arise when the buyer assumes that the inspector’s findings are enough. They make their decision to move forward with the purchase based on the inspector’s findings without following through on the various recommendations the inspector has made.

Admittedly, many of these things are probably of little consequence but others could result in the buyer taking possession with later regrets.

For example, getting the sewer scoped. It can be a very big expense to deal with problems with the drain between the house and the city sewer, and yet many buyers do not follow through on their inspector’s recommendation to have the sewer scoped. Some inspectors encourage their clients to get it done during the time of the inspection and sort of kill two birds with one stone in terms of time.

Other things that might need further evaluation outside the inspection include: property easements, clear title, neighbors, wood destroying insects, retaining walls/fences, trees, swimming pools, abandoned or used tanks (septic oil etc), wells, lead, asbestos, water quality testing, radon testing, conditions of the electrical system, conditions of the plumbing system, HVAC equipment issues, energy efficiency, indoor air quality, foundation/drainage issues, chimney issues, roof issues, window/cladding issues etc.

Basically anything that requires further evaluation, because it is either outside the scope of the inspection or outside the inspector’s areas of expertise, should be followed through with in order to do ones due diligence, but many merely see the inspection as completing that regardless the recommendation for further evaluation.

The bison in the china closet in all this is the enormous pressures present to “keep-the-ball-rolling” to closing. There simply is not enough time for a buyers to do their due diligence, so all parties to the transaction encourage seeing the property inspection as the final step in the process—the last big hurtle to vault over or limbo under.

In a seller’s market a lot of the blame for accepting shorter and shorter due diligence comes right back to the buyer—and of course their agent who support the idea as the only way the buyer has a chance of getting the house. Being more or less forced into this arrangement, it is only natural the buyer would expect perhaps a bit more of their home inspector than any home inspector can deliver.

It really is a no win situation for the buyer and they best find a home inspector that gets them as close as possible to all the pertinent information—and perhaps one that has the experience and is willing to guess a bit on their behalf.

You know the client has unreasonable expectations of the inspector when the inevitable question arises, “Would you buy this house?” It is actually quite a reasonable question in light of the position the buyer has been placed, it just does not have an answer unfortunately.

As a side note, and perhaps a topic for a post of its own, a buyer should never rely on an inspection report provided by a seller.  Use it as information on top of an inspection you procure on your own, but do not rely on it for your own due diligence.

Let the bison roam, and fix the yard afterwards.

Charles Buell, Real Estate Inspections in Seattle

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Seattle Home Inspector

 

The Human Rights Campaign   QR code for Charles Buell Inspections Inc  ASHI.org

 

WA State, Home Inspector Advisory Licensing Board

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Rainmaker
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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

Meanwhile my time spent during a home inspection, things done during a home inspection, and huge time requirements to come up with a report get longer and longer.

And still, sometimes, it isn't enough.  And they want a "discount..."

Unfortunately I am the roaming bison.  Or musk ox, whichever.

Jul 04, 2017 07:20 AM #1
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Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Charles - You're right. We do see this happen a lot, especially lately in our hot market, where buyers are fearful of doing anything to put their deal in jeopardy. We have all the experts lined up ahead of time so we can get them in for professional opinions if they're needed - but then we have to deal with the question of whether to ask for repairs - the seller might just say no. But having a go-no go choice is better than not knowing.

Jul 04, 2017 07:29 AM #2
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Anna Banana Kruchten - Phoenix Homes Sales
Phoenix Property Shoppe - Phoenix, AZ
603-380-4886

Charles I believe it's important and wise for buyers to follow up on any inspections the inspector suggests. I realize in a 'hot market' buyers are reticent to ask for repairs fearing they'd lose the home. But that doesn't mean they should waive the inspection - better to know what potential issues they might be facing.

Jul 04, 2017 09:06 AM #3
Rainmaker
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Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

This sentence in your post tells why I like more balanced markets between buyers and sellers than what we are experiencing currently.
"In a seller’s market a lot of the blame for accepting shorter and shorter due diligence comes right back to the buyer—and of course their agent who support the idea as the only way the buyer has a chance of getting the house." 

Jul 06, 2017 01:23 PM #4
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Kristin Johnston - REALTOR®
RE/MAX Realty Center - Waukesha, WI
Giving Back With Each Home Sold!

I agree with you and the comments above....why would you pay for something and then not follow through with the suggestions?

Jul 22, 2017 07:31 AM #5
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Charles Buell

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