[Michael Leavitt's Home Page | Back Issues of the MMM | Current Issue of the MMM]
|
|
Its a great day here in Northern Utah. The leaves are turning and the colder weather is approaching. I am now finding myself taking my jacket and polar fleece as I leave the door in the morning. Summer has left us too quickly.
SELLER
PRE-INSPECTIONSThis is an interesting column from a Philadelphia Inquirer at Philly.com. It was shared by a fellow Inspector from back East. Note the prevailing sentiment in the article about Seller provided Pre-purchase Home Inspections.
By Alan J. Heavens
INQUIRER REAL ESTATE WRITER
Getting a home inspection has become standard operating procedure for buyers.
Since 1980, the percentage of home sales that were contingent on a home inspection has increased from 5 percent to probably 75 percent nationally, according to the American Society of Home Inspectors.
It is less a part of a home seller's repertoire, but there are signs that this may be changing. A growing number of sellers appear to be worried about hidden defects that could be serious enough to delay settlement or even kill a deal when the buyer's inspection uncovers it.
"We've seen a large increase in the number of seller [-originated] inspections in the last year," said Peggy Varani, president of 20-20 Inspections, a home-inspection company in Montgomery County. "Sellers want peace of mind when they put their houses on the market, and inspections can provide that."
A need for peace of mind was what motivated Judy Dore and David Dammerman to hire Varani's inspection firm before they put their three-bedroom Queen Village rowhouse on the market a couple of weeks ago.
"The house was built in 1860, and, although we've lived in it for three years, we don't know everything about it," said Dore, who is relocating to New Jersey.
"Although we are fairly certain that there's nothing wrong with the house, we wanted to be certain that there weren't any issues that needed to be addressed before we put the house on the market," she said.
"It was simply a way to preempt any problems," Dore said.
Dore said her real estate agent, David Krieger of Coldwell Banker in Conshohocken, supported the idea of a seller inspection.
"He was all for it," she said. "He even got us in touch with the inspector."
Other agents aren't as enthusiastic about seller inspections. Some even recommend against it.
"I've never had a seller ask to do an inspection," said Michelle Dayoub, an agent with Re/Max Services in Blue Bell. "In a seller's market, with so few resale properties being listed, there's no reason for a seller to do it."
Dayoub said she's never recommended that a seller have an inspection done because she's never listed a property that was in such bad shape that one would be warranted.
"I think a seller inspection generally invites legal problems," said John Duffy, owner of Duffy Real Estate in Narberth. "When sellers ask whether or not they should, we usually recommend against it.
"The major reason is that if the buyer is going to pay $400 to have his own inspection done, and if that inspection uncovers something that the seller's didn't, it could become a legal issue," he said.
The typical home inspection costs $200 to $400, depending on the size of the house and the complexity of the survey. Some home inspectors are certified to perform termite, asbestos, radon and lead-paint testing.
On rare occasions, such as if the house is in really bad shape, Duffy said he would go along with a seller's inspection to get the defects down on paper and address them before the house goes on the market.
"But in most cases, I don't think it's appropriate," he said. "I believe that most sellers want to be open and honest with buyers, but, for some reason, the more open and honest you try to be, the more problems seem to result."
Pennsylvania requires sellers of previously owned residential real estate containing fewer than four units to disclose all known defects that could affect the property's value or pose an unreasonable risk to its occupants. While a home inspection will not absolve a seller from liability for such defects, it should provide enough information to fill out the disclosure form with greater accuracy.
New Jersey is considering such a law.
Most inspections follow a narrative or a checklist, or a combination of the two. Before choosing an inspector, consumers should review a number of sample reports so they can choose the report that meets their needs.
If seller inspections were required by law, Duffy said he would welcome them. But not now.
"Some sellers have asked me if they should have radon tests done in advance of putting the house on the market, and again I have said no," Duffy said. "When the issue first came up, I talked to a couple of lawyers who warned against it because radon readings can change every day.
"If the seller does the test and it comes back 3.2, and then after the buyer moves in and has the test done, the reading is 5.2, the buyer can come back and sue the seller," he said.
Concerns about litigation seem to be motivating everyone since the courts began chipping away at the principle of caveat emptor, or "let the buyer beware."
According to David Rapp, a New York real estate lawyer who also practices in Massachusetts and California, the straw that broke caveat emptor's back was dropped in California.
"The problem with people leaving California is that they carry their notions of law with them," he said. "All you have to do is sue, sue, sue. Because of the extraordinary legal costs that usually are involved, submitting to extortion is cheaper."
In 1963, Links v. Savage required California brokers to inspect property beforehand to disclose settlement and erosion problems. It put this burden on the broker, not on the seller, "because, in most instances, a broker has a personal interest in the transaction and derives profit from it," Rapp said.
That and other decisions resulted in development of a disclosure form that needed to be completed before any property could be transferred in California. If the form was filled out improperly, the buyer could begin action to rescind the transaction.
Sometimes, the cases that arise are understandable, Rapp said. In Ohio, a seller-financed inspection showed a potentially deadly furnace defect. The seller got another inspector to give him a clean, though fraudulent, report. The sale went through. However, the seller left the first report in a drawer, and the buyer found it when he moved in.
In San Francisco, people contracted to buy a home designed by a particular architect whose name added a premium to the house. The buyers doubted that the architect designed it, but closed on the house anyway. Then they sued for rescission and damages. In this case, the court ruled the buyers could sue because they were in "an inferior position to the seller."
"Anything that affects the habitability and sale ability of a home must be disclosed," Rapp said. "In California, this means that if there ever was an ax murder in the house, you have to disclose it."
After you call the police.
What do you see happening in your areas with the Seller provided Pre-Purchase Home Inspections???
LATE
NEWSFLASH - DECK FAILUREThis late news story arrived on my monitor just before uploading this edition of the MMM to the internet. It was so hot I didn't want it to wait until next week. It is another catastrophic deck failure news story to help reinforce your deck evaluation findings. You may want to refer back to the MMM archives where we previously discussed deck failures.....
Woman dies when deck collapses
at wedding party
September 19, 1999
Web posted at: 12:12 PM EDT (1612 GMT) The Associated Press.
LYONS, Oregon (AP) -- A wooden deck packed with guests at a wedding collapsed shortly after the ceremony, killing a California woman and injuring 25 others. The bride and groom, both in their 60s, were not seriously injured.
Most of the victims in the accident at the bride's home Saturday plunged about 40 feet to the bottom of a bluff near the Little North Santiam River.
"It went down in the blink of an eye," said Holly Williams, who had played her flute during the ceremony.
Orleta Larue, 70, of Crescent City, California, died in the fall, officials said. Agnes Mink, 84, the bride's aunt, was in critical condition.
Twenty-three other people, including the bride and groom, were treated at two local hospitals for injuries ranging from a broken collarbone to cuts. Most were reported in fair or good condition.
Julia Hansen of Boise, the bride's daughter, said she and other family members were getting ready to pose for photos when she gathered her children on steps near the deck.
"I said guys, stay over here," Hansen recalled. Seconds later, the deck gave way, and she and her children jumped back to safety.
"By the time I turned back around, the deck was gone," she said. "I saw some legs flying but the rest of the people were already down."
Hansen said her mother had the deck built about five years ago and that it had passed a recent inspection. The cause was under investigation.
Lyons is about 25 miles southeast of Salem.
FHA
FEEDBACKLast week's MMM dealt with the FHA guidelines for Appraisers that should open up the door to plenty of business for qualified and informed Home Inspectors. Good feedback was received from the readership.
Jim Corbin shared....
Hi Michael, Good to see your MMM on the FHA information. I have been working on the FHA 203 (k) certification and, in fact, sent in the final information to Region 8 to gain their blessing. I also have read about the FHA regulation changes in a magazine for appraisers, home inspectors and environmental screeners...called, "The Communicator." The articles also echo the business opportunity ahead. A couple of questions for you... Do you have 203(k) certification? If so, do you have some pre-made or computerized forms for the inspections and the estimation?
If you have some written remarks for your presentation, I believe it would be a very good article for the MMM. I know I would be interested. HUD-FHA information is still in the "pea soup" stage for me.
Thanks for the MMM and all your work on the many articles. We all benefit from your writing. Regards to you and Shelly and family. I look forward to seeing you at the annual meeting. Best Regards, Jim Corbin - Bow, WA
Jim, I jumped through all of the hoops a couple of years ago for the 203(k) and realized that doing the 203(k) inspections was the furthest thing from what I wanted to accomplish. The 203(k) market is almost non-existent here in Northern Utah and the bureaucratic red tape involved was way beyond my patience level for the minuscule fee that would result.
Please don't misunderstand
me..... I think that it is fantastic that you are going forth
with the training. The market for the 203(k) is very viable in
your area and the need for qualified 203(k) trained Inspectors
is high. It is a specialty all its own and it is important that
you stay on top of the guidelines. 203(k) certification is not
for those who may only do 3 or 4 of them in a year.
As for the computerized forms for the 203(k) inspections, my good friend Clay Higgins in California had some Windows version forms that he shared with me to test drive. I was unsure from which company I wanted to purchase them from. I ended up not purchasing any of them when I made the decision to steer away from 203(k)s.
Several companies offer the 203(k) computerized forms and none are really that high-tech. All of them could be easily recreated with an Omniform type of program, but it may be better to buy them if your time is valuable. However, if the long cold winter will be sparse of inspections, then buy Omniform, download the forms from the FHA site, print them out, re-scan them into Omniform and set up the fill-in fields...... Maybe I should do a MMM on Omniform and show you how I used it for my Service Agreement and WDI report.
Roy Brown is personally dealing with the FHA situation as an
Appraiser also doing Home Inspections....
I have been dealing with the subject
of Bill's message for the past week. I am a Washington State certified
appraiser, making the switch to home inspection. I am also an
FHA approved appraiser. I work as an independent appraiser for
a company in the area. We are putting out a joint flyer to area
lenders offering the upgraded "VC" home inspection form
for a fee increase of $150.00. Area lenders are expecting a fee
increase from $100.00 to $200.00. We are further offering to wave
the extra fee if a complete home inspection is ordered through
my company. I will either do the FHA appraisal too, or if I don't,
submit the necessary information to the other appraiser at no
charge. That way I get the inspection job, and he gets the appraisal
with no increase in fee to his
lenders.
I think it is a good deal for all. Just a thought. You may want to get hold of the form, look it over, and talk to an appraiser or two in your respective areas. I think that indeed, it is a good opportunity for business, especially for start up companies like mine which are not exactly burdened with work yet. Roy Brown - Puget Basin Home Inspectors - Lake Stevens, WA
Frank Johnson responded with a question about testing heater systems....
Michael,
In regards to the following:
"QUESTIONS the appraiser must
answer include:
1). FURNACE = "Unit shuts down before reaching desire temperature?"
2). ELECTRICAL "Outlets function = check representative number?"
3). ROOF: "Roof life less than two years*?"
*HUD/FHA requires that the roof have at least 2 years remaining
life. If the roof has less than 2 years remaining life, then the
appraiser must call for re-roofing or repair. The condition must
clearly state whether the subject is to be repaired or re-roofed.
FHA will accept a maximum of 3 layers of existing roofing. If
more than 2 layers exist and repair is necessary, then all old
roofing must be removed as part of the re-roofing.
How can you accurately determine # 1 if it is in the middle of July or August and the heating system is evaluated in the "Summer Test Mode". My summer test procedure is written as follows:
"During the portion of the year
when the heating system is not normally operating the summer
test procedure is used. This is done by turning up the thermostat.
This will result in a partial
test of the heating unit; however, the adequacy of the distribution
system and amount of heat
cannot be ascertained. '
Does anyone have any feedback on this? Thanks, Frank Johnson - Capital Home Inspection Services - www.capitalhomeinspection.com
Frank asks a valid question, but I don't know if it is that big of an issue. Here's why:
With that list in mind, the only thing that cannot be fully evaluated in the summertime is the ability of the heater to adequately heat the different rooms of the home. Frank, I see nothing wrong with your disclosing that the heatability of the system could not be fully determined in the hot summer weather. I do not think that this disclaimer removes any of your responsibility for not identifying a room without a heat register or restricted heat register air flow. This is all part of our visual evaluation.
I would also like to share a learning lesson that I thankfully identified on an inspection about a year ago. Northern Utah home's generally have unfinished basements that are completed after the original construction. I generally take for granted that the main floor heat registers are going to perform okay. It is the basement registers that I really pay close attention to because they are usually homeowner installed and troublesome. This usually occurs as the homeowner taps directly off the main heater supply trunks for the register installation. On one inspection I observed all of the recommended registers both on the main floor and in the basement. It is not uncommon to find basement rooms without a register.... Oooops!!! When I did my heat flow test I found a main floor register with no flow..... This was strange! The basement register blow flowed just fine. It turned out that the homeowner decided to use the duct to the main floor and reverse the 90 degree elbow and direct it to the room directly below. Their logic was that hot air rises and the room on the main floor would still be warm...... Strange homeowner logic!?!?
DON'T EVER TAKE THINGS FOR GRANTED!!!
The aspect of the American Institute of Inspectors® that I like the best is that we all pretty much inspect things in the same way. We may use many different reporting methods, but we were all trained to do the same inspections. I have not found this in any other group of Inspectors. We have our unique differences and some of us go further than others, but we all had a common starting point..... Do we walk on safe roofs - Yes! Do we enter safe attics - Yes! Do we go to every corner of the accessible crawl spaces - Yes!
QUESTIONS
OF THE WEEKNow a question about your inspecting style. Please take the time to answer the following questions and send them along. Your feedback will be greatly appreciated. There are no Rights or Wrongs, but if we all share our methodology we might just come up with a lot of Betters.
How do you test the GFCI protection in the following situations.....
I know that some of you use socket testers with a GFCI testing button, but others of you do not. I would like for you to defend your testing procedure and your equipment choice. I will post each and every response to this question in a future MMM.
Please also address the following......
[Michael Leavitt's Home Page | Back Issues of the MMM | Current Issue of the MMM]
       |
       |
AII™
Web Site: www.INSPECTION.org