What is the home buyer’s due diligence period?

There seems to be a general misconception among some home buyers that the hiring of a home inspector is the completion of their due diligence, when in many respects it is just the beginning—or at best just part of the process.

The home inspector will expose the concerns, but often they will not be able to allay justifiable concerns related to those findings.

The problems arise when the buyer assumes that the inspector’s findings are enough. They make their decision to move forward with the purchase based on the inspector’s findings without following through on the various recommendations the inspector has made.

Admittedly, many of these things are probably of little consequence but others could result in the buyer taking possession with later regrets.

For example, getting the sewer scoped. It can be a very big expense to deal with problems with the drain between the house and the city sewer, and yet many buyers do not follow through on their inspector’s recommendation to have the sewer scoped. Some inspectors encourage their clients to get it done during the time of the inspection and sort of kill two birds with one stone in terms of time.

Other things that might need further evaluation outside the inspection include: property easements, clear title, neighbors, wood destroying insects, retaining walls/fences, trees, swimming pools, abandoned or used tanks (septic oil etc), wells, lead, asbestos, water quality testing, radon testing, conditions of the electrical system, conditions of the plumbing system, HVAC equipment issues, energy efficiency, indoor air quality, foundation/drainage issues, chimney issues, roof issues, window/cladding issues etc.

Basically anything that requires further evaluation, because it is either outside the scope of the inspection or outside the inspector’s areas of expertise, should be followed through with in order to do ones due diligence, but many merely see the inspection as completing that regardless the recommendation for further evaluation.

The bison in the china closet in all this is the enormous pressures present to “keep-the-ball-rolling” to closing. There simply is not enough time for a buyers to do their due diligence, so all parties to the transaction encourage seeing the property inspection as the final step in the process—the last big hurtle to vault over or limbo under.

In a seller’s market a lot of the blame for accepting shorter and shorter due diligence comes right back to the buyer—and of course their agent who support the idea as the only way the buyer has a chance of getting the house. Being more or less forced into this arrangement, it is only natural the buyer would expect perhaps a bit more of their home inspector than any home inspector can deliver.

It really is a no win situation for the buyer and they best find a home inspector that gets them as close as possible to all the pertinent information—and perhaps one that has the experience and is willing to guess a bit on their behalf.

You know the client has unreasonable expectations of the inspector when the inevitable question arises, “Would you buy this house?” It is actually quite a reasonable question in light of the position the buyer has been placed, it just does not have an answer unfortunately.

As a side note, and perhaps a topic for a post of its own, a buyer should never rely on an inspection report provided by a seller.  Use it as information on top of an inspection you procure on your own, but do not rely on it for your own due diligence.

Let the bison roam, and fix the yard afterwards.

Charles Buell, Real Estate Inspections in Seattle

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I often get requests for information and help with specific reader questions.  I enjoy doing what I can to offer my opinion or help.  If you find the information was useful and care to send a monetary donation of appreciation, I would really appreciate it.  I will leave the amount up to you, and of course not donating will always be OK.

Thanks, Charlie

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