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

Your attic access is smiling?

People love to install pull down stairs as the means of attic access,  Stairs tend to make the attic space more useful as one is not teetering on a step ladder to get things up and down.

Before I go further in this discussion, I want to state that attics are for insulation–not storage or other purposes even though commonly done.  There are numerous problems with using attic space for things other than insulation and this article is NOT about all of those things.

At this time I only want to discuss the pull down stair attic access.

As you can see by this infrared picture, the pull down stairs is staring right at us and gives away the problem.

I am smiling because of how much I am costing you!

The two beady white eyes are all that shows of the zipper seam of the insulating cover between the poor seal of the lid.  This picture is what the lid looks like without the infrared.

Pull down stairs

The foam zipper cover made to improve energy efficiency is a whopping R-3.8 at a cost of around $116.00 from the Big Orange Toolbox.  Modern standards require that attic hatches be insulated to the same level as the rest of the attic.  In other words R-38 to R-49.  Some sort of thick foam cover would be necessary.  And, of course with that much insulation in the attic any storage floor system gets quite complicated.

This next picture is what the R-3.8 foam cover looks like with the infrared camera and with the stairs pulled down.  As you can see, it represents little resistance to heat flow from the warm attic. 

This greatly increases energy consumption due to heat loss in the winter and heat gain in the summer.

Like I started out at the beginning of this conversation, it is best to leave the attic to insulation–and find a better place for the Christmas decorations and stuff your kids will have to deal with when you are gone.

 

Charles Buell, Real Estate Inspections in Seattle

Going above and beyond

As home inspectors we hear over and over that if we go outside the standards of practice we open ourselves up to more liability. 

Let’s put liability aside for a moment (or at least come at it from a different angle) and discuss another good reason for going beyond the standards of practice.  To the degree that we provide a level of detail beyond the sop’s we can have a pool of information to better support what we did or did not do during the inspection. 

This can be accomplished not only by providing more detailed information in the report itself but also by having a large number of pictures that support both the written report and also provide a resource that one can go back to if questions arise.  With excessive pictures (350 to 450 for the “average” home) the inspector can essentially repeat the inspection from their computer.

greatbeyondWe all hate those calls that begin with: “A couple of months ago you inspected my home……..” 

Ninety-nine percent of the time the rest of the sentence goes something like, “…..and now we would like you to inspect another one for us.” 

We keep our fingers crossed about the sentence not continuing with, “…..and you missed XY & Z and we want to know what you are going to do about it.”

I can argue that the number of calls like this goes way down as the level of detail in the report goes up. 

I witness this in the discussions I have with other inspectors that strictly adhere to the sop’s and who routinely surrender the cost of the inspection back to their clients, or pay even larger amounts in claims for things actually missed or that they had no way of “proving” that they did not miss. 

I have even known inspectors that just consider some amount of reverse flow of money a “normal” cost of doing business.  I think it is important to keep this reverse flow of money to a minimum.  I have always been able to support either in the written report or in photos what the “truth” of the matter was.  Given that in 13+ years I have only had two such incidents, I jump to the conclusion that I am doing something right.  In the first of these incidents there were four items that were claimed to have been missed and all were sufficiently covered in the report–and in redundant fashion–and were even in the summary.  Sometimes it is helpful to read the report.

In this case, the client simply did not sufficiently read the report, but instead relied too heavily on what was discussed during the inspection.  While tons of stuff will be discussed during the inspection, it is fairly typical for issues that are not deal breakers to either not be fully discussed or possibly not be discussed at all during the inspection and only fully revealed in the context of the completed report.

In this one instance I should have perhaps made it clearer that the report was paramount to the most complete understanding of the house’s condition.  In any court of law, it is the written report that will largely be relied upon to either support or refute either party’s claims.  I for one would rather know in my heart that in fact the consumer was actually taken care of, even if at first they were not aware of it, than to fall back on a SOP that allowed me to not say anything about something, or did not specify a higher level of detail. With this detailed approach, all parties of the process, agents, buyers and inspectors, are best protected.

In the second incident, the glare of the sun prevented me, or allowed me, to miss the gutter was hanging off the fascia at one end, and I had the washed out picture to show for it.  Unfortunately, the cover picture of the report itself showed the hanging gutter quite clearly.  That cost me $75.00 for client to hire a handyman to reattach the gutter, but was not enough to clean the egg off my face.

While some Home Inspectors will choose to use the SOP as an “out,” I would much rather rely on my report–and of course the minimum Standards of Practice are easily covered by the report anyway. 

Just like the Building Codes are the worst house we are allowed to build, so to the Standards of Practice define the worst inspection we are allowed to do.

By Charles Buell, Real Estate Inspections in Seattle

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