Home inspections have long been a part of the home buying process, with smart buyers bringing in an expert to check out a property, before they make a huge investment. Over the past couple of decades, in our local market, we’ve seen a significant shift towards home sellers having inspections done, prior to putting property on the market. What caused the shift?
In the Bay Area, home sellers have been fortunate (most of the time) to be operating in a strong Seller’s Market, meaning that supply & demand are not balanced, leaving buyers competing for properties and making “multiple offer” situations commonplace. When buyers compete with each other, one of the most common ways to make their offer the most attractive to a seller is to waive their right to an inspection contingency. Since sellers like the possibility of receiving such an offer, they will often have one or more inspections done prior to marketing, so that the reports are ready and available for buyers to review. Some sellers also like the approach of having inspections done a bit in advance of selling, so that they have time to make some repairs, prior to going on the market. While we are seeing pre-listing inspections as the norm right now, sellers are under no obligation to have inspections done.
Buyers beware. Depending on the condition, age and type of property being sold, it may be wise to inspect a lot more than what the seller has provided. If a general home inspection is the only report, you may also want to consider specialized inspections for things such as the roof, chimney, HVAC system, Wood Destroying Pests or foundation. Pay special attention to items in the report that state, “further inspection recommended.” In addition, many times the seller has not done the suggested repairs, so the inspection reports are representing an as-is status of the property. If the seller has hired someone to do repairs, it may also be worthwhile for the buyer to hire a home inspector to verify and check that the work was done properly.
As a buyer, it’s important to understand and evaluate the amount of risk that you are willing to take. The reality is that if you try to protect yourself with an inspection contingency and there are competing buyers, your offer might be rejected. If the home is well within your means and you feel comfortable that the inspections done are current, professional and thorough, then it may make sense to take on the risk. Depending on how your offer is structured, you may also choose to maintain the right to inspect, without an inspection contingency. If taking this approach, it would be wise to consult with a real estate attorney, first.
It’s important to note that not all home inspectors are the same. There is a big difference between a fairly new inspector who has completed a course in home inspection and perhaps one who has been inspecting homes for 20+ years. Some home inspectors are also licensed contractors or structural engineers. It’s worthwhile to check credentials and reviews.
Finally, when you own your home, it is wise to consider periodically having a home inspection. Unless you occasionally check out your crawl space or attic, there may be things going on in these areas that are best caught early. It’s sort of like going to the dentist for a regular checkup. For example, a small water leak, a damaged duct or termites are all problems that can easily be fixed when caught early. The longer they go unnoticed, the bigger the repairs will be.
Every home sale is unique. Please feel free to reach out to me at 925-964-5010 or via email at Lisa.Hopkins@Compass. com for a custom analysis of your options. Even if you’re not ready to make a move today, it’s never too early to start planning for success. DRE#01111126.
