What’s a home worth? The answer may be purely esoteric based on the wild rise and fall of the market and the continued quest for the bottom. But don’t tell George Harper that.
Harper, owner of GH Building Consultants in Long Beach, can go along way toward answering that very important question as far as how much investment one will have to make above and beyond the purchase price. Harper is past president of California Real Estate Inspection Association, he chairs the Coalition of Home Inspectors and he’s co-chair of the American Society of Home Inspectors National Legislative Committee for States Affairs. He’s been inspecting and appraising homes since 1991, and before that he was active in the homebuilding industry in Long Beach since 1976.
Harper advises that with foreclosures abundant among homes on the market, getting a property inspected before making a purchase has added importance.
“You’ve got a lot of property being foreclosed or short-sold or they are bank-owned properties, and there might not be very good disclosure,” Harper says. Even though sellers are obligated by California law to disclose any defect in a property, there are a whole lotta cracks these defects can slip through undetected by the unwary homebuyer, Harper notes.
“Buyers are relying on whatever resources they can get—their own inspection, or a visual inspection,” he says. “Obviously you have a high percentage of properties that are short sales or are bank-owned, and there’s not that abundance of disclosure that’s out there under a conventional sale.” And often, with foreclosures, somebody’s been kicked out of a house, and it’s not unheard of for the tenants to do some (intentional or unintended) damage to a house. “Then it’s up to the buyers to buy these houses almost sight unseen really,” Harper adds. “Remember, that with foreclosures, the houses are usually vacant, the sellers are long gone and therefore the required sellers property condition disclosures do not apply. As such the home inspection becomes that more critical as it usually is the only true source of available information on the overall condition of the property. The banks do not know condition and have no obligation to disclose condition.”
A recent search I conducted on www.realtytrac.com shows 1,877 properties in Long Beach listed as being in default. With so much opportunity, must come a good dose of caution, so I asked Harper to toot his industry’s horn by helping come up with a few questions he commonly gets, and then answer them, on the subject of home inspection.
What does a home inspector do exactly? A home inspection is an objective visual examination of the physical structure and systems of a house, from the roof to the foundation. It is not an appraisal, which determines market value. It is not a municipal inspection, which verifies local code compliance. The home inspector should inspect readily accessible, visually observable, installed systems and components and report to the homebuyer any that are not functioning properly, are significantly deficient, unsafe, or are near the end of their service lives.
A quality inspector will also make recommendations to correct components, or monitor for future correction items needing further evaluation. The standard home inspector’s report will cover the condition of the home’s heating system; central air conditioning system (temperature permitting); interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows and doors; the foundation, basement and structural components. Also, the report should give the reasoning or explanation as to the nature of any deficiencies.
What should one look for in a home inspector? When choosing an inspector to hire, we recommend you talk to the inspector ahead of time and ask the inspector about the services provided and to provide you with professional references. We also recommend that homebuyers be wary of bargain home inspections, and not base their decision on price alone. It is also a good idea to review sample reports to make sure you can understand them. Related experience in construction or engineering is helpful, but is no substitute for training and experience in home inspection. We recommend that homebuyers ask the following questions:
Is the inspector a Member of the American Society of Home inspectors (ASHI) and/or the California Real Estate Inspection Association (CREIA)? Homebuyers can find out if an inspector is an ASHI and/or CREIA member by checking their Web sites: www.ashi.org or www.creia.org
What does the inspection cover? Make sure the inspection and the inspection report meet all applicable requirements and comply with the CREIA and/or ASHI Standards of Practice. Again, visit the respective Web sites to read about those requirements.
Is the inspector specifically experienced in residential inspection? Related experience in construction or engineering is helpful, but is no substitute for training and experience in home inspection.
Does the inspector’s company offer to do repairs or improvements based on the inspection? This is against the CREIA and ASHI Code of Ethics because it might cause a conflict of interest.
How long will the inspection take? The average for a single inspector is two to three hours for a typical single-family house; anything less may not be enough time to do a thorough inspection. Some inspection firms send a team of inspectors and the time frame may be shorter.
How much will it cost? The cost of services can vary dramatically, based on items mentioned above along with the experience, education and qualifications of the inspector. Remember that there are no requirements within the state of California to perform this work. So, that being said, it is important that the homebuyers check out the inspector completely. A typical 1,500 square foot home inspection can cost anywhere from $350 to $550. Buyers should be very cautious of excessively low cost inspections. No truer words apply in our profession than, “You get what you pay for.”
Does the inspector prepare a written report? Ask to see samples and determine whether or not you can understand the inspector’s reporting style.
Does the inspector encourage the client to attend the inspection? This is a valuable educational opportunity, and an inspector’s refusal to allow this should raise a red flag.
Why can’t this home inspection be conducted by a Realtor (they are already getting a fee)? Also, is a home inspection something a Realtor can pay for? Agents are not qualified to perform this service and if they did do this it would be a conflict of interest as they have a financial interest in the transaction closing, whereas home inspectors do not. Also in direct violation of the CA B & P code 7195-7199 stating that a home inspector may not inspect a property where they have a financial interest. Remember home inspectors are paid for their services regardless of whether they house sells or not. It is not the responsibility of the agent to buy the inspection, although on a few occasions they have done this as a gift or favor to the client.
When an inspection is complete, Harper notes, an inspector will not fail a house, but rather will provide a report describing its physical condition and indicate what may need major repair or replacement. These defects are not reported to anyone other than their client unless the client gives permission to do so.