Don't let the stiff competition in hot seller's markets this spring persuade you to forego a home inspection on a home you want to buy.
As with any spring crop of seller's markets, this year's comes with perennial "as-is" listings and others that prompt the buyer to make an offer without the contingency of a home inspection.
Don't do it.
"How do you know what the 'as-is' is if you don't have the home inspected?" asked Dane Hahn, broker owner of Exit 11 Real Estate in Stratham NH.
With the buyer tagging along, a licensed and/or trade group-certified home inspector gives a property the once over, inspecting systems, structures and components -- that are visually accessible -- to identify material defects, conditions that may significantly affect the value, desirability, habitability or safety of the home.
A narrative report -- rather than or in addition to a checklist -- describes the inspector's findings and not only points out defects, but gives the potential buyer the opportunity to more intimately know the home, learn how to operate systems and schedule future maintenance. Inspection finds can also become negotiating tools.
"The real reason to get an inspection is that the average citizen is not an expert. From a cosmetic standpoint he or she may be satisfied with the carpet, but what about the wiring? Does the furnace need to be replaced? These are not things the average buyer would have any sense of. The discovery is what you are paying for," said Hahn.
There are also some liability issues.
Wise sellers obtain home inspections to provide evidence about what they know about the condition of their home. Not disclosing known conditions that can affect the value of salability of a home can be grounds for legal action in many states.
"One would hope that credible agents will represent sellers and tell them that it's a good idea for sellers to provide home inspections," said "dirt lawyer" David Hofmann, counsel with Hoge, Fenton, Jones and Appel in San Jose, CA.
"The seller's risk is if the buyer discovers something later, they may say the seller knew or should have known and can go after a suit for seller disclosures," Hofmann added.
Hofmann says that doesn't preclude the buyer from obtaining his or her own general home inspection, as well as additional inspections. Termite and roof inspections are often mandated by law. Inspections by structural engineers to determine a home's seismic and wind storm resistance may also be necessary in areas where those conditions exist.
"I think buyers should get as many inspections as they possibly can. That leads them to being fully aware of conditions. People so concerned about getting a property tend to over look things in their anxiety over getting a home, but then they close and face the reality of complications in the property. An offer to buy 'as-is,' with no inspection, no contingencies and to close as soon as possible is very risky business for agents and buyers," said Hofmann.
Some argue real estate agents who suggest buyers forego home inspections are not living up to their fiduciary responsibilities to best represent the buyer.
"Any Realtor who doesn't recommend the buyer get a home inspection will be taking on liability he or she doesn't want. If you bought a house and, a year after you bought it, find $10,000 worth of repairs, you'd be hearing that echo of the Realtor saying 'If you really want this house you don't want to get an inspector,'" said Hahn.
Perhaps the only time a buyer may forego initiating a home inspection is when he or she accepts the seller's home inspection, but then only within certain guidelines, advises Jerry McCarthy of San Mateo, CA-based Building Systems Inspection and Analysis.
McCarthy, spokesman for the California Real Estate Inspection Association, says buyers can sometimes pay a reduced fee to have the seller's inspector virtually retrace his steps by going over everything in the original report.
"Have a meeting with the inspector and go over the report. Pay a reduced fee, the inspector will give you a report in your name, you have someone you have met. This works very effectively. If it's an older house, tell the seller you want the guy to come back out and go over the report and have a personal tour" with the inspector said McCarthy.
He added, "But there are two schools of thought. Get my own report and pay the full price and I have two reports. That way I have a better shot at feeling I know the home," McCarthy said.