Tuesday, September 7, 2010

“Is a Property or Home Inspection Report a repair list?”

There is a common misunderstanding by buyers about the purpose of a home inspection report. They often view it as a list of items the seller is obligated to fix, rather than as a list of items which may need immediate or future attention. The fact is sellers are not required to deliver a perfect home, either by law, or by contract.

With a termite report, the requirements are different. Real estate contracts customarily obligate the seller to repair conditions classified as “Section One” items in a termite inspection report. Section One includes the problem of active infestation, i.e. termites, fungus, dry-rot, etc. Other “Section Two” types of conditions, which may lead to active
infestation, such as earth-to-wood contact, are not required to be fixed by the seller.

With a home inspection, most items noted for attention are subject to negotiation between the parties. Typically, buyers will request that various conditions be repaired before the close of escrow, and sellers in many cases will agree to fix some of these items in order to preserve the sale and/or foster good will. However, there is no obligation for the seller to do so, unless these items are required by state law, local ordinances, or set forth specifically in the purchase contract. These “obligations” include things like earthquake strapping for
water heaters and smoke detectors. Standard purchase contracts further provide that all fixtures and appliances, plumbing, electrical and mechanical systems be in good working order, that windows not be broken, and that the roof does not leak.

Before you make any demands of the seller, try to carefully evaluate the inspection report with an eye toward the problems of greatest significance and those items that may compromise health and safety. Routine maintenance items warrant a lesser degree of concern. Unless a home is brand new, it is unreasonable to insist upon the correction of every defect. Such demands can alienate the seller and kill the deal. On the other hand
your willingness to accept minor problems may persuade the seller to correct more serious conditions, even though he may not be obligated to do so.

The purpose of a home inspection is not to “corner” the seller with a repair list. The real objective is to know what you are buying before you buy it – and what you may need to fixin the near future. All homes have defects. “It does not matter if your boat has few small
leaks, as long as you know it is leaking.”

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