th (9)Buyer Inspection

At the conclusion of this section you will be able to:

Identify the level of inspection expertise that brokers/agents are expected to have when conducting property inspections and identify the characteristics of an effectively written broker’s/agent’s description of a property. Identify why buyers should not conduct their own property inspections.  Identify why the lowest priced inspectors are not necessarily the best property inspectors.  Recognize what brokers/agents should do to avoid potential liability should a buyer insist on using his or her own property inspector and recall where brokers/agents can go to find out if a contractor is licensed by a state.

Identify what brokers/agents can do to reduce the risks of being accused of negligent referral in the event a Buyer brings suit and identify how to qualify a general property inspector.  Recall why it is important for brokers/agents to regularly verify an inspector’s insurance coverage and identify why it is important that buyers are present during property inspections.  Identify why it is important to qualify inspectors that are referred to buyers and recall four reasons why buyers commonly decline to hire a property inspector.

Fill in the Blank

Identify why buyers should not their own property inspections. Identify why the lowest priced inspectors are not necessarily the best property .

thThe Buyer’s Inspection

Commonly lawsuits are brought that involve real estate agents and brokers because they did not adequately represent their buyers’ interests by focusing their attention on property condition, property investigation, and on negotiation. Most transaction contracts stipulate whether or not the buyer would like to have the property they are interested in purchasing inspected before closing.

This stipulation is often accompanied by a specified number of days in which specified inspections are to take place and it includes a clause that the purchase contract is contingent upon the findings of these inspections. Often referred to as buyer’s due diligence, a buyer’s inspection should not be conducted by the actual buyer himself, but by a contracted objective third party who performs home inspections as a professional. In most cases, despite their rational, buyers are generally not necessary in the mindset to objectively conduct adequate property inspections; rather, it is likely that they are caught up in the delight of their potential purchase, focusing much more on the positives of the property than on the negatives. And of course, this means that they will likely miss the objectionable factors. Additionally, because it is unlikely that your buyers have a background in construction or property inspection, they are also not capable of understanding the significance of these discrepancies if they did identify them. For instance, they may observe particle board used in place of sheetrock in the garage, but they most likely will not understand that particle board used in this way does not meet building code, nor will they understand that it burns much faster in the unfortunate event the garage catches fire.

Quick Quiz

Fill in the Blank:

Commonly lawsuits are that involve real estate agents and brokers because they did not adequately represent their buyers’ interests by focusing their attention on condition, property investigation, and on negotiation.

Instead, it takes a professionally trained and experienced inspector to spot and understand the significance of the discrepancies that may be present. A competent professional home inspector has the knowledge, skills, and abilities to establish an unbiased and informed report regarding the condition of the property. They are familiar with the basis of proper home construction, including installation and its maintenance. Additionally, they understand how a home’s systems and their many pieces function, as well as how and why they may become inoperable. If an inspection identifies problems, you may be able to negotiate the purchase price or modify the contract terms. In the event major problems are identified by an inspector and the buyer’s finances are tight or they just don’t wish to manage repair work, the information will be invaluable for the buyers.

Fill in the Blank
If an inspection identifies problems, you may be able to the purchase price or the contract terms.

Reasons Buyers Bypass Inspection
Some home buyers opt out of having their potential properties inspected before closing, and there are many reasons why they make this choice.

Four common reasons include:
1. They are in a hurry and inspections take too much time.
2. They believe that inspections are too expensive.
3. Buyers believe that they are unnecessary.
4. Buyers feel they can save money by doing the inspections themselves.

th (9)1. Too Time Consuming

Depending on supply and demand, it may take several days for a reputable inspector to schedule, conduct, and report his inspection findings; however, given the value added to the transaction process, not to mention the freedom from the unknown that an inspection provides, their expertise is likely very worth waiting for.

2. Too Costly

In theory, it is the least expensive home inspector that will have the least knowledge and experience. Because time is money, it also stands to reason that they will spend the least amount of time performing the inspection and of course, the less time they spend, the less likely they are to find faults and problems that may exist.
For these reasons, buyers should not let the cost of an inspection necessarily persuade them to go with one inspector over another. In most instances the knowledge gained from an inspection is well worth the time and expense, not to mention peace of mind. You can help your buyers by assuring them that the lowest-priced inspector is not necessarily the best inspector. Instead, buyers should be advised that it’s the inspector’s qualifications that matter most. The inspector’s experience, references, and professional affiliations should be the most important consideration in their selection.

3. Viewed as Unnecessary

There is no such thing as a perfect property. Even brand new properties have faults. Inspections identify the positive aspects of a property and the aspects that may limit its value. They also point out the maintenance that will be necessary to keep the property in good condition. Once completed, an inspection provides both sellers and buyers with a clear understanding of the value of the property. It is always better to be safe than sorry. If the property is deemed in good condition, buyers can complete their purchase with certainty and confidence.

4. Believe that they can do it themselves

In many situations buyers believe they can adequately conduct their own inspections. They certainly have that right; however, with conscientious effort, you may be able to educate them on the pros and cons of doing their own inspection. If your buyers insist on doing their own inspection, it may be appropriate to have them sign a document that acknowledges your professional opinion; thereby, releasing you and your brokerage of responsibility.

For example:
“As your purchasing agent to obtain (specific property address), I have recommended that you obtain a qualified property inspector. Given your decision to conduct the inspection yourself, you hereby release this agent and his (or her) brokerage of any liability of the integrity of the inspection you will conduct.”  The buyer should also date this document, and a copy should be given back to the seller along with a copy for you and the brokerage you represent.

Fill in the Blank:
Depending on and demand, it may take several days for a reputable inspector to schedule, conduct, and report his inspection.