How to deal with a less than stellar inspection report

When buying a home, hiring a certified home inspector (Illinois house inspectors are licensed through IDFPR) to give the place a once-over is a must. To the untrained eye, problems with the home's structure or systems such as an ineffective exhaust vent or bad electrical wiring can be virtually impossible to detect.

And while you might not be able to tell if the grade of the house is off, you'll sure notice when there are fish swimming around in your basement after the next big rainfall!

Home inspectors are often just a precautionary matter, since a seller should be aware of and disclose any serious defects ahead of time.

But what should you do when a bad home inspection report makes your dream home suddenly seem more like a nightmare?

Here are some tips on dealing with a bad home inspection report:

• Don't panic. Almost no home is perfect. Most will have issues that come up on home inspections - even new ones.
• Do your homework. Get as much information as you can from the inspector - especially if you were not able to accompany him during his walk-through (although we strongly encourage you to be present during the inspection).
• Go through the home inspection report with your REALTOR to decide which defects are minor and which ones are major.
• If there are major items that need to be addressed, you can ask the seller to: 
  • fix the items on your list,
  • fix only the most serious items, 
  • provide a cash credit at closing, or
  • reduce the sales price.
• While it might be tempting to hand over a to do list to the seller, sometimes you are better off making your own repairs.

Example:
"When I bought our house, the basement had a lot of cracks in it. I should have asked for a credit but instead asked the seller to repair it. I believe he literally walked around with a can of spackle and slapped it on every crack."

Gee, how helpful... Learn from my mistake.

For that very reason, many buyers ask the seller to provide a credit at closing to make repairs themselves. No one - buyer or seller - is happy to see a bad inspection report. But it's also not the end of the world.

Remember, everything is negotiable. Stay positive and don't let a bad inspection ruin your day - or your deal.

Winterized Homes, As Is and the Inspection

I've often been asked to provide advice or support when dealing with "winterized" homes or 'as is' purchases where the utilities were all or partially shut off by the owner or the service provider. It is always in the best interest of the client to have the utilities turned on and to enable all appliances or mechanicals operable for a complete inspection and determination of functionality or defect.

The 'red flag' is usually plumbing related for either the gas or primarily the water supply, drainage, and venting. Inspectors will and should perform the diligence of their inspection procedures with an eye towards stressing or running all supply lines and faucets on all levels simultaneously for at least 15-20 minutes in vacant properties or when utilities had to be restored or 'dewinterized' for the inspection. In fact, there are times when the inspector has to activate the interior shut off or related valves as an initial activation since winterization. This is where the inspector needs to be cautious and practice a 'relieved pressure' technique by turning on at least one faucet per level prior to water being activated or turned on at the main shutoff. In this way, there would be a gradual filling of the supply lines with relieved pressure and the caution to eliminate any sudden pressure which could lead to bursting pipes. Some owners, or their contractors, attempt to convince buyers that air pressurization on the plumbing is an acceptable method of proving function or integrity. While air pressurization can demonstate constant pressure or identify potential leaks, it will not provide an entire systems function to include drainage and venting in the case of functional water flows to include drain, waste, and venting [DWV].

There are also some systems such as radiant type that are used in pool, spa, or exterior areas to control comfort, snow, or ice. These systems will generally use a glycol or anti-freeze fluid. If these have been drained, then there would need to be additional steps and cost in order to re-activate for inspection or operational purposes.

The advice clients receive from inspectors is to have the utilities on and operational for a complete and thorough inspection, especially with vacant properties. Additionally, if opted for by the client to proceed with an inspection without utilities on or operational, then it is likely that the plumbing, in the case of gas and water, will be DISCLAIMED for the supply, drainage, venting, appliances, or mechanicals connected to or part of the systems. In most cases, we at HomeTeam negotiate prices based upon these factors since it will affect the time involved with the length of an inspection.

Houselogic.com

The National Association of REALTORS recently launched a new website, www.houselogic.com. The site is designed to help homeowners protect, maintain, and enhance the value of their home. The site, although still in beta form, had a soft launch at the NAR meetings in November. The hard launch will take place in February 2010 to consumers. I think you'll find once the site officially launches that it has some very useful and interesting tools available to you. You can check portions of it out now although it is in beta form.

Not only will the site provide homeowners with a simple resource to help manage their homes, the site will allow homeowners to speak together with REALTORS to federal legislators on public policy issues where homeowners and the real estate industry have a common interest. How cool is that!

Watch for details in the next few months!

Dryvit® Inspections - What is it and Why Should I Get One?

 What is “Dryvit®/EIFS”?

 Dryvit® is a manufacture of insulated exterior cladding products and their name is used generically to describe all the products that are manufactured on the market. In actuality there are close to forty manufactures of these products that fall under a category of products known as; “Exterior Insulation and Finish Systems”, or simply put EIFS (pronounced Eeef-is). 

Several years ago it was discovered that some EIFS clad homes had developed issues if the EIFS was not properly installed or more importantly maintained. There were several class action lawsuits against the manufacturers, while none were found guilty, several had settlements and large amounts of monies were paid out.

Now here we are and depending on who you talk to we are either in the middle or leading edge of the end of the latest recession. Either way, several of these homes are on the market today as foreclosures. It is almost a guarantee that those in foreclosure have not been maintained to the industry standards and are-in-need of a full comprehensive EIFS inspection to discover if there are any underlying problems that are not visible to the eye by just walking around. Even those listed homes not in foreclosure should be fully inspected prior to purchasing.

Why a specialist?

Because it takes special testing equipment andknowledge of how the EIFS’s work with other critical building components to properly evaluate these exterior cladding to determine if there are any under lying concerns. A good place to start your search for a qualified inspector is: http://www.dryvitinspections.com.

These homes should not be written off, they offer superb “Green” benefits to new buyers as shown by the US Department of Energy. They offer substantial energy savings to the consumer and through various warranties and maintenance programs they can be of little concern to a new buyer. In the past it was not uncommon for a seller to remove this cladding from the home in a belief it helped the home sell. This was done at a great expense to the seller and did not guarantee the maintenance issues were resolved. In some cases it actually presented larger problems. In today’s “Green”movement it is not unusual for the EIFS cladding to once again make an appearance in new home construction for those wishing to have one of the most energy efficient exterior wall cladding on the market today. For this reason and more importantly the true understanding by a homeowner on how to maintain these truly energy efficient homes, they are regaining their popularity in the housing market today.  Be the expert, and follow this simple process: inspect, repair and maintain.

How to find a good Home Inspector?

How do you find a good contractor, or mechanic, or doctor?  Think about it, you get names from a variety of resources including  friends, relatives, the Internet, professional associations, etc.  It's really no different with Home Inspectors, however, let me offer the following.

First, in the State of Illinois it is a requirement that a Home Inspector be licensed and be in good standing or status with the State's Division of Professional Regulation [http://www.idfpr.com/dpr].  You can check out any Home Inspector by his/her name or business. 

Second, like any other businessn you would want to know if there's any claims or complaints, pending or otherwise, by checking with the State's or Local Better Business Bureau [http://chicago.bbb.org].  Some businesses are members while others aren't, but what you're looking for is a negative history, if any.

Third, is the Inspector's certification and education background or credentials.  Home Inspectors in the State of Illinois must take at least 6 hours of Continuing Education annually to maintain their licenses.  Many Inspectors strive to further educate themselves either "deeper" into core competencies or to seek ancillary or other certifications whereby their potential for additional revenue or services increases.  Generally, it takes time to achieve numerous certifications or additional licensing, but this is an indication of time in business, experience, commitment to the trade/industry, and savvy or expertise.  A word of caution, you can find extremely educated and diligent inspectors without a broad base of additional certifications or licensing in many other non-core competencies, however, you'd likely need someone's help to identify them based upon reputation or proven client satisfaction.

Fourth, is the Inspectors membership or affiliation in professional associations.  This is indicative of on-going commitment, professional association with fellow peers or related other professionals within an industry or trade, and alignment with organizations that share common vision and values.  While there are many different Associations out there nationally and locally, what really matters is whether the Inspector belongs to one or some and if they're in good standing with that organization.  Many different Inspector Associations have varying levels of certification, status, and attainment.  Additional information is generally available on Inspectors via web sites such as IHIA, ASHI, NACHI, NAHI, MORe, etc. 

Fifth, is hiring someone with insurance coverage and able to prove it.  Errors & Omissions and General Liability insurance coverage should be a high priority for anyone hiring a Home Inspector.  Why?  Clients or their agents, are deemed to be associated with the hiring of a contractor to do work for them, thereby extending responsibilities for that contractors possible damages to a property being inspected.  Additionally, the client should feel comfortable knowing that the Inspector is reputable and provides coverage regarding any Errors or Omissions that may result from their service or lack thereof.  The best coverages should include extension of coverage to or for referring agents.

Last, is simply getting recommendations and referrals from trusted resources.  Attorneys, Realtors, and Mortgage Brokers all generally have a list of known reputable Home Inspectors that have proven track records and high client satisfaction feedback or appreciation. 

Home Inspectors should be professional in terms of appearance and communication skills.  Being able to articulate clearly and effectively is key to a clients service success and comprehension of the facts, opinions, and guidelines provided by an Inspector.  If you're left with more questions after an inspection, then you've probably hired the wrong Inspector and you likely didn't achieve any peace of mind.

What to expect when purchasing a Foreclosed Home when having it professionally inspected.

Foreclosed homes, while recently in abundance, have there own unique issues and concerns when being considered for purchase.  First, and foremost, generally these properties have been vacant for some period of time.  The utilities are most likely turned off or non-operational and in turn so are the related mechanicals and appliances.  Any deferred maintenance areas will worsen and create additional concerns for their status and functionality. 

One should be very skeptical and concerned with what's wrong with the house and especially major infrastructure or mechanical components or elements.  As someone who's done many of these type of inspections, it is advisable to set the level of expectation upfront. In general, the inspection will entail a bit more diligence and likely duration, given the number of inspectors possibly involved.  Too many times there's an attempt to "take it or leave it" or "as is" approach to the entire purchasing process, however, when it comes to the inspection part, the diligence and methodical approach is in your best interest.  An inspection allows for time by an impartial objective licensed professional [and their team] to observe, operate, stress, and inspect the entire property and its components.  Inspectors get to go where others can't, won't, or aren't able to go and to let the property "speak" to them while they're utilizing a methodical systematic inspection approach for everything in and around the house. 

One major flag is the plumbing of the house and any scenario whereby the house is "winterized".  Our experience has been that there's good reason to be suspicious of leaks, broken pipes, and operational functionality.  We've found broken drain lines; abandoned vacated uncapped old septic lines and seepage, improper repairs with inferior or non-standard non-code compliant plastic products, and sewer backup or related crushed main drain line presence.  We've also experienced the negative manifestations associated with stressing a system whereby toilet leaks, whirlpool tub or shower leaks, and even buried in the wall pipes have broken and leaked during an inspection.  Some of these items are discovered while crawling in crawl spaces or attics and not just in plain view.   It is extremely important to approach a vacant home's plumbing system with some caution in terms of activation and inspection in that the pressure alone can create a major problem if tested improperly or without regard to relieved pressure adjustments prior to activation. 

Besides plumbing concerns, often we'll find missing and damaged mechanicals, appliances, or remnants of systems that were taken or stolen.  We're often brought into a Foreclosure for documentation purposes so the client has a comparison of what's been disclosed vs. what's actually in-place and whether it's functional or not.  I recommend to many clients they have a professional foreclosure home inspection prior to their final decision and as a contingency to their purchase.  The cost of a foreclosure inspection is minimal for the peace of mind and potential exposure to additional costs, so I always recommend it.

Why Should I Get An Inspection?

It's a good question, but consider the point of view for a moment. This assumes the buyer of a potential property is asking the question and likely a buyer of residential real estate. Well, let's assume this to be the case and attempt a best or perspective answer to it! Of course, there are other scenarios where an inspector plays an important role or provides a valuable service, but that's a topic for another time.

While in the State of Illinois there's NO current requirement to have a home inspection as part of any real estate transaction, there is, however, a requirement that any Home Inspector within the State of IL must be licensed...and by licensed I mean a license issued by the State of Illinois from the Illinois Department of Financial and Professional Regulation. Licensed Inspectors are accountable for standards of practice and ethical compliance, similar to other licensed professionals.

So, let's see, if I don't have to have an inspection, then why would I need of get one? Well, you sure don't need an inspector to tell you what you already know about what you've seen, been disclosed, or like about a property. You also don't need an inspector to give you an assessment of value, municipality code citation status, contractor lien, or mortgage counsel.

So, then why would you need an inspection by a qualified state licensed professional?

I would offer that you want to find out what you don't know about a property or have concerns about when considering purchasing a property. Home Inspectors generally get to go or will go where buyers can't, won't, or aren't allowed to go to inspect a properties infrastructure, elements, or components. This means not only do inspectors get time to crawl, probe, test, measure, or observe areas of a property but are also allowed to do so based upon National codes and Standards of Practice. Determination of what's functional, what's not, what is deferred maintenance, what is a safety hazard or concern, or what is a defect, major or minor, is part of the value an inspector brings to the client. This should be accomplished in an objective positive professional manner based upon a set of standards and practice. Personal commentary or advisory and counsel regarding the purchase of non-purchase of a property should never to expressed or offered by a Home Inspector...it's simply not within the scope of their function nor ethical in nature.

So now, think about it for a minute...who's going to answer all your questions and concerns about the whole house from the roof to foundation and anything in between or within the property lines? Even a municipality code compliance or sales inspection won't provide a top to bottom, inside out, and current overall functionality status or defect report. Your carpenter friend or contractor family member may be helpful during a walk through or visit to the property, but they are not allowed to do or perform an inspection as a licensed professional in the state.

A good home inspection should answer more questions than would be raised or left unanswered. Peace of mind is part of a deliverable that a Home Inspector should provide you while differentiating major vs. minor defects, maintenance needs [deferred or otherwise], and product recalls and/or safety hazards. While the interests of the buyer may be extended to determine defects and assist them with price negotiations, the inspector's focus is be unbiased, neutral, and objective reporting of their findings, recommendations.

What do you think? Send me your thoughts or comments... I'd love to hear and share them!