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The Raison D'etre Of Real Estate

by Bill Ball

Raison d'etre (re-zon´ de´tr) is a French term that means: "The justifying reason for the existence of something." Another source defines it as: "A reason or excuse for existing."

My question for this column is: What is the purpose of home ownership? Is it to simply get the lowest priced house?

I ask, because my home inspection clients are often confused about my duties. They are, in my opinion, sometimes misled about the reason or raison d'etre for owning a home.

Recently, one client was frustrated with me because I would not give estimates for the cost of repairing items identified in the home inspection report. He said, "How can I negotiate with the seller if I don't know how much money each notation is worth? That's what I paid you to help me with!"

The underlying assumption he made -- that a home inspection report is a negotiating tool -- is what is wrong. No competent home inspector provides estimates for the cost of repairs for conditions that he/she has identified. Those costs can only be determined by consulting with a licensed technician.

Besides, I believe that "negotiating on the price" is way down the scale of "reasons" for home ownership. Prior to dickering on the price, other issues relating to VALUE should come first, such as:

Will this home meet my family's needs in size and design, and its proximity to schools, church, shopping and work?

Will this home provide a safe environment for my family: i.e., are there hazardous materials like lead, mold, and radon in the building that might harm us?

Is the home located in a flood plain, an earthquake zone, hurricane territory or tornado alley -- and what has been done to strengthen the home to protect my family from these potential dangers?

Is the neighborhood safe -- or as safe as can be expected -- from crime and gangs?

What is the reputation of the town or city for delivering services like police, fire, garbage, water and sewer? Are these services reasonably priced? How do property taxes compare?

What about the community's cultural activities: Are there parks, a library, museums and theaters nearby?

What is the average appreciation of residential real estate in the community over the last 10 years?

Can you get a mortgage that is reasonably priced?

Are the major components of the home like roofing, siding, water heater and heating plant in serviceable condition, or are they old and reaching the end of their useful life?

And finally, is the asking price fair? Does the home appraise for more or less, and why?

Only after the first eight questions have been answered are are you at the logical point to ascertain: What major repairs are needed and how much will it cost to fix them?

A home inspection can help with these issues of VALUE, but it is not the single most important tool. Having reported on the condition of the components of a home, the home inspection report should almost never be used as a negotiating tool without the support of bids from licensed tradespersons for repairs identified. ("The Duty of a Home Inspector is to inspect a home's visible and readily accessible components for 'material conditions' and report them to the buyer as it affects Value, Desirability, Habitability, or Safety of the dwelling."¹)

It is unfair to the home inspector to expect the report document to be a negotiating tool, and it is unfair to buyers if they rely ONLY upon the home inspection report to justify the value of a home.

¹Source: Uniform Home Inspector's Code Book™

Published: December 9, 2003

Use of this article without permission is a violation of federal copyright laws.

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Bill Ball is a skilled and inspirational instructor, author, columnist, and call-in talk-radio host. Bill has over 35 years experience in all phases of construction and real estate with experience in the construction of more than 1,800 custom homes including architectural design, construction, financing, marketing, and inspection. For the last 15 years he has focused on the field and is proud to call himself a Home Inspector. Bill is publisher of the UNIFORM HOME INSPECTOR’S CODE BOOK^TM. Contact him at - AskBillBall@aol.com

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