Thursday, February 9, 2012

Inspection Time!

(originally written June 28, 2011)

Here’s that part of the roller-coaster where you might start to feel slightly nautious.
When all parties come to a deal you can order your inspection. If you did a very thorough once-over of the house (and you went back more than once to double and triple check) you won’t be surprised by what the inspection report contains. That being said, it can be the scariest thing ever. You have a right to “tag along” with the inspector and if they are worth the price you’re paying them they will explain issues as they go. You don’t have to tag-along if you don’t want to. You can show up near the end to go over any issues with the inspector instead, or just wait for the report.
We had a FABULOUS company do ours called Envirotesting and we recommend them to EVERYONE. They are thorough and have a great reputation to uphold in our community. (We were not compensated by this company for an endorsement – we gladly paid for our services!) If you don’t know much about your local companies – your realtor can suggest who does the best work. Expect to pay somewhere from $350 – $500 for an inspection. Yes, like everything else, it’s expensive. While you don’t *always* have to get it done to buy a house, I’ll put it bluntly – you’d be stupid not to. A friend of mine, while very intelligent, didn’t get an inspection on a house he bought a few years ago and it the chimney started separating from the house. If he would’ve gotten an inspection he would’ve known the issue was there and either would’ve bought a different house, had the seller fix it, or would’ve at least known to get it fixed before it turned into a serious problem. Get an inspection. It’s worth every penny.
When you get your inspection report you can sit down and go over it with your realtor to address any issues and see what you might be able to negotiate. Then (if you need to) you go BACK to the negotiation table and let the seller know what issues you want taken care of or to negotiate. If the seller asks to see the report your are under absolutely no obligation to give it to them (the inspection company will tell the seller of any serious health and safety hazards though) and you can always suggest they purchase it from you for half of what you paid. If you end up not purchasing the house and you give them your report they can use it to sell their house. While I’m all about helping others – I want to do so without depleting my bank account by hundreds of dollars so someone else can make money.
Eventually (or not) you’ll hash out some agreement. At this point if you’re learning toward walking away the seller might get desperate. If you show signs of walking away they may start giving you the sun and moon to keep the deal going. Garry and I had a deal with a house where the sellers *thought* they had the upper hand until we had an inspection done and it came back TERRIBLE. Red flags everywhere! We said that there was no way we’d spend the amount of money we agreed upon for that house knowing it needed another $20,000 worth of basic structure and safety hazard repairs. They tried giving us money, their old above ground pool (in NY, seriously?) and basically did all but get on their hands and knees and beg for us to buy their house. We still walked away with $400 down the drain. If you get so far as spending money on an inspection and the report indicates it’s too much for you to handle – walk away. There is no shame in letting it go. It’s better to spend $400 on an inspection than thousands (that you might not be able to afford right away) on repairs that need to be done immediately. However, if you really paid attention when you looked at the house (several times) you probably would’ve noticed any serious issues and wouldn’t have taken it that far in the first place.
The other thing – inspections will tell you if a house is (as my mother so eloquently put it) “lipstick on a pig.” This is where people did the “slap-dash” cosmetic repairs to cover up a problem they know exists. Your inspector can tell and will indicate in the report that they couldn’t access, determine or otherwise inspect something because of a barrier. They cannot tear down sheet rock or look behind walls – they are only able to inspect what’s on the surface. It’s up to you whether or not you feel comfortable with that.
Again – this goes to all the people out there that sit and watch design shows all day. Don’t expect to go spend all your cash on design stuff right away. It takes YEARS to get there. You want to make sure you take care of any issues first, replacing old units near the end of their life, then move on to projects that will increase your equity (like adding square footage by finishing an attic or a basement).
Be wary of a report that has a lot of “couldn’t access” blocks in it. While I like to try and believe that all people are inherently good, some people are so desperate to sell their homes and know how expensive it is to fix major issues that they don’t want to take the responsibility for themselves and will try to pass it on to the buyer (you). Not all sellers are like that, but just be careful – like everyone else – they want your money.
In our case we had an inspection done by the grant program we’re participating in before we could even put an offer on the house. It was nice to know what issues there were before getting into a contract. Since this was a requirement of the program and we didn’t have to pay for it, we didn’t have any issue. We are still waiting on our (formal) inspection report to be released by the company we hired, but my guess is that we’ll get it today or tomorrow. Yes, we got 2 inspections done. Better to be safe than sorry