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1. What is the value of a home inspection when buying a home?
Depends. Like all other home services, not all home inspections (i.e. home inspectors) are created equal.
While often a very valuable tool used in the negotiation of the home’s price, the long-term value of an inspection report can be somewhat marginal. To find a top-notch home inspector (to get a truly valuable inspection), I really can give no other advice than to ask around (really explore). In my eyes, one of the most telling signs of a home inspection, and further, the home inspector, is whether or not and how deeply he/she accesses difficult to reach spaces like a crawl space and/or an attic. I am frequently amazed when I see an inspection in which the inspector did not actually go on the roof (an easy tell – does the home inspector have an extension ladder on his truck?).
A vital tip here: if working with a real estate agent, request that they be present for the inspection – they typically work very closely with home inspectors and can often gauge (among other things) how effective an inspection is.
For individuals that are very home savvy and/or plan to DIY (say in the case of a fixer-upper) forgoing a home inspection may actually make sense. As is the case often with bank owned properties, a formal inspection may not even be option.
All that said, a home inspection is often a good decision (if you have room in your budget), if for nothing more than to have a relatively inexpensive set of eyes in for a look at what you have when you are going in. But remember, here – you get what you pay for.
– JB Bartkowiak is the head writer and editor for home improvement site, Building Moxie. He is a former construction manager, and now an avid writer, DIYer and fixer upper.
2. Are sellers required to reveal any issues that may be present in their home when placing it on the market?
Most states do require a variety of disclosures of problems and repairs. There are some things, however, that may not be required to be disclosed by law (for example, a death in the home or certain types of illnesses). Prior foreclosures are often not required to be disclosed, but may raise concerns about lack of maintenance during that time period and a subsequent “flip” of the property. I generally recommend doing some research to find out what needs to be disclosed in your state. Ask your real estate agent, but also look further. Not everything on the Internet is true, but some of it can be. I also recommend checking court records for prior liens, lawsuits, and similar matters. If the homeowner sued about some allegedly bad construction or a roof leak, that may raise a flag. Walk the neighborhood one evening and nicely ask neighbors if they know of problems with the home or the neighborhood. If everyone says, “Oh, you don’t want to buy that house!” – you may want to look into the issues and risk.
3. Similarly, if there was ever a fire or water damage/flooding in a home, does that have to be revealed when the house goes up for sale?
In many states, these types of damages would be required to be disclosed, even if repaired. Again, ask for those disclosure sheets and look for evidence of repairs. If there were permits issued after the initial construction of the home, inquire about what was done. The local building official records may give you some clues. And then ask questions.
4. Can the seller be held responsible for fixing critical issues before selling their home?
This may vary by state. Your contract should have a contingency that allows you to terminate the contract without penalty if they do not agree to needed repairs or to discount the purchase price. At the same time, do not depend on that type of clause alone. You may get back your earnest money/deposit, but you may have incurred loan application fees or other costs and delay, so you want to get the inspection early and consider the timing of your other responsibilities and contingencies.
If you buy a home and later find there were problems that were known but not disclosed, you may have a case for fraud (if covered up) or other failures, but the costs of a lawsuit, the difficulty of proving the facts and prior knowledge and the risks may greatly exceed the cost of repair. Spending $20,000 (or more) to seek $5,000 or even $20,000 is not cost-effective. Just because a roof is leaking does not mean you have a legal case, in most situations. The sellers must have known about it, intentionally omitted to disclose it or misrepresented the situation, your reliance must be reasonable and you must have damages. In simple terms, you must prove all of the elements of fraud by the standard of proof of that state. And then, if you do manage to win, you have to collect the money. A lawsuit is not what you want to rely upon. Save yourself the time, money and energy by being informed and knowledgeable ahead of time. A lawsuit is really only for situations in which all other protections failed.
Kevin M. Veler, Kevin is a construction attorney representing contractors, remodelers and homeowners. He is legal counsel for the Atlanta Chapter of the National Association of the Remodeling Industry, and been active in contractor licensing since the law was first proposed to the state legislature in 2004.
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