Friday, November 30, 2001

What if you’re a seller who believes his property is in fine shape but during home inspection you find that the roof is in horrible condition?

Since most home-sale contracts are contingent upon a proper home inspection and lots of extra costs loom if a problem is found during the inspection, this scenario can be a bit scary. If the inspection reveals the need for substantial house repairs, requiring thousands of dollars in unexpected expenses, the sale of a home can be delayed or even, in the worst cases, halted.

With some planning, willingness to negotiate and the help of professionals, however, unforeseen home inspection expenses do not have to end in chaos.

Linda Zoorob-Shreck of Jobin Realtors in Centreville, Va., says that if you’re selling a home and you have the time, you can go ahead and pay for a prelisting inspection on your own so you have full knowledge of any problems before listing the property. This way, there should be few surprises about the house’s condition during the more stressful negotiations with a potential buyer.

“An experienced listing agent will encourage a potential home seller to go ahead and pay for a home inspection by a licensed inspector [preferably one with engineering and construction experience] prior to the home even being listed, especially if the house is over 15 years old,” Ms. Zoorob-Shreck says. To save on the cost of the inspection, she advises: “Check with your Realtor, who probably has many contacts who are willing to give discounts.”

Presale inspections, she says, “can be obtained less expensively than standard home inspections that are usually paid for by the buyer, and then you’re not under the gun when your contract might fall through and you only have a short time to resolve any unforeseen problems.”

“In the long run, this ends up being more cost-effective and can relieve a lot of the stress from having to deal with competing engineering and inspection reports, hurriedly trying to comply when the contract is waiting to go through,” she says. “Sometimes you only have a relatively short time to comply. That can be extremely stressful, although a trusted Realtor will help you through any process.”

If you happen to forgo a prelisting inspection, though, and your potential buyer’s home inspector finds some problems, that’s no reason to be upset, says Bea C. Smith, a Realtor with Long & Foster’s office in Frederick, Md.

“People shouldn’t fear the home inspection process if they’re selling their home,” she says. “Everything’s negotiable, and that’s especially true with the added benefit of an experienced Realtor.”

While it is the “buyer’s prerogative” to have the seller fix anything found wrong during the home inspection, Ms. Smith says, the repairs can be negotiated in very specific terms in an addendum to the main sales contract.

“A seller doesn’t always have to assume that he will be the one to pay for all of the required items to be fixed,” Ms. Smith says. “You can wind up with any number of scenarios, from a seller assuming total responsibility for home repair costs after an inspection, to splitting the costs 50-50 with the buyer, to a seller stating that he will not make any additional changes. This assumes that the changes that need to be made aren’t mandatory, for example, like bringing electrical service up to code, et cetera, as those things must be addressed by someone no matter who ends up paying for it.

“When it’s been a seller’s market,” she says, “houses are being snatched up so quickly that buyers are willing to undergo additional expenses just to get the house they want, so it doesn’t always fall upon the seller to address problems found during the home inspection.”

So what about selling a home “as is”?

“They’ll need to specify that the home is being sold ‘as is’ in the listing, both in any advertisements and in all computer multiple listings,” Ms. Smith says. “And [the seller] will have to change the wording of the contract to make sure that it’s legally in writing that the seller is not responsible for repairs.”

As always, and perhaps more so in an “as is” sale, it’s caveat emptor buyer beware. Even if a buyer waives the home inspection and agrees to purchase a home “as is,” a lender might insist that certain items be fixed before letting the sale go through, Ms. Zoorab-Shreck says.

“With loan programs like FHA, you have to make sure the house meets certain requirements before they will officially approve the loan,” she says. Some lenders insist on termite inspections, she says, “so even if you waive your home inspection right and want to buy the house ‘as is,’ you may still need to go through some additional steps, and that might end up having to be another point of negotiation between the seller and the buyer, or the buyer will have to pay for it on their own if the house is sold ‘as is.’”

“Sometimes some of the things found during a home inspection aren’t just specifics to make the buyer happy but are items, such as having electrical wiring up to code, a proper roof in good condition, a termite inspection and more, which have to be corrected before a bank will approve the loan, even if the buyer and seller both agree to the house as it is in its present condition,” Ms. Smith says.

“This is where it’s important for the buyer, who may not be anticipating the extra costs, to go ahead and pay for additional licensed professionals in special areas like plumbing, chimney inspections or electrical areas, if the initial home inspector says there might be a problem,” Ms. Smith says. “It may end up costing several hundred dollars more, on top of the several hundred dollars that is standard for a top quality, experienced home inspector. It’s worth the money for the buyer’s peace of mind, though.”

The buyer should understand, however, that even new houses aren’t going to be perfect, the Realtors say.

“I think what helps this whole process is for the buyer to understand, in reference to home inspections and repairs, that no house, even newer ones, is perfect. There should be some give and take there, especially with older homes. You are, after all, buying something that’s been lovingly used; some wear and tear and maintenance issues are going to come up. I do always tell people who are interested in much older properties, though, to search for Realtors and home inspectors who have experience in historic or older properties because there are unique factors with those properties and inspections,” says Ms. Smith, who has taken the training necessary to earn the designation of a certified historic property specialist.

“Luckily, it’s up to the buyer to pick their home inspector, so they have the opportunity to do thorough research and come up with experienced home inspectors and other specialists for any areas about which you have specific concerns to make sure you’re purchasing a good piece of real estate,” Ms. Smith says. “That being said, again, I urge people to understand that no house is perfect and sometimes those imperfections, aside from major faults like structural damage, faulty wiring or a bad roof, add character and can be taken as is or with minimal changes and minimal expense.

“If the seller does end up choosing to make the needed repairs to things found during the home inspection process, though, the good news is that it’s up to them, their choice totally, to secure the professionals who will be fixing things for them,” Ms. Smith says. “Then they get that in writing, documenting the improvements, to show the buyer.”

The bottom line, says Ms. Smith, is that everything in the sale of a home is negotiable, so a seller shouldn’t balk at some expensive repair because there are ways to work that out with the buyer. Ms. Zoorab-Shreck agrees.

“The home inspection and home closing process should never frighten prospective buyers and sellers,” Ms. Zoorab-Shreck says. “Even if there are home inspection problems, ultimately everything comes down to negotiation, and things can be settled in a professional, fair, mutually agreed upon and expeditious manner.”

“The home inspection process,” says Ms. Smith, “while it can be daunting when unexpected expenses come up, is really there to protect everyone involved. With experienced Realtors and other professionals to help ease the process, along with a little willingness to negotiate and a little planning, both buyers and sellers can be accommodated and the sale of the home will go through relatively painlessly, making a success for everyone in the end.”

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