Over the years, I have been involved in many client real estate transactions and have been asked to render opinions on inspection reports. Millions of dollars are at stake and the process of a fair, objective evaluation and inspection can be challenging. Hiring an inspector is commonplace during the due diligence process and generally a wise investment. However, in my experience, buyers should be aware of a few important considerations related to inspections.
- Most inspectors will focus on obvious items that are easily repaired and not significant to the overall condition to the house.
- The length of the inspection report is not necessarily an indicator of the value of the inspection.
- Some inspectors feel as if they must find something to report to justify their fee even if the items are minor.
- Most inspectors will use the language “inspection of this item is beyond the scope of this report” to protect the fact that they are not able to adequately offer an opinion on more complex house systems. It is often worth the extra cost to engage an expert to offer an opinion.
- It is wise to solicit a budget related to repair of significant items in need of repair and in many cases is advantageous to obtain a credit from the seller to allow the buyer to repair inspection items to their satisfaction with their preferred vendors. In other words, the buyer gets to control the repairs to make sure they are satisfactory.
- In the case of significant issues (house systems, structural, mechanical, etc) the buyer might escrow funds at closing to make sure enough money is available for any surprises.
You are spending millions on your second home. It is an investment that will, if properly cared for, increase in value. Make sure before you close that you know what you are buying. The good, the bad, the potentially ugly.