When purchasing a home or selling a home, both buyers and sellers should do their own inspections. On the seller’s side it’s prudent to do a pre-sale inspection, where you know the conditions of your property before going on market. This gives you the opportunity to either repair some of the items in order to make a sale happen faster and with less headaches when you have a buyer in hand and it avoids the blindside of something coming up in a buyers home inspection report that can be an unexpected cost or repair that you as seller where not anticipating. No one wants to lose a buyer.
On the buyer’s side it’s prudent to do your own home inspection as well to help avoid a money pit situation or costs and repairs that you weren’t expecting to fork out after down payment and standard costs to purchasing a home. We will discuss three inspection reports to help guide you through the process.
Why do I need to do my own inspection?
A: As a prospective buyer, you obtain and review a home inspection report (HIR) prepared by an independent, neutral home inspector.
The home inspection is a non-invasive examination of the mechanical, electrical and plumbing systems of the dwelling, as well as the components of the structure, such as the roof, ceiling, walls, floors and foundations.
A Home Inspection Report from a competent and certified inspector assures you the property is free of defects, except those listed on their inspection report. The inspector is paid a fee for their services on delivery of the Home Inspection Report.
The Home Inspection Report:
- identifies each system and component of the structure inspected;
- describes any material defects the home inspector finds or suspects in the condition of the structure and its systems and components;
- makes recommendations about the conditions observed; and
- suggests any further evaluation other experts need to undertake to clarify the home inspector’s suspicions.
Material defects are conditions which affect the property’s:
- market value;
- desirability as a dwelling;
- habitability; and
- safety from injury in its use as a dwelling.
Defects are material when they adversely affect the price a prudent and reasonably well-informed buyer offers to pay for the property when entering into a purchase agreement.
In contrast to the assurances of an HIR, the mandated transfer disclosure statement (TDS) you receive from the seller on which they disclose property information — a disclosure limited to the seller’s and their agent’s knowledge — may not be relied on as fact unless the TDS has an HIR attached to it and the seller and their agent obtained information from it to fill it out.
However, when the seller’s agent does not hand you an HIR before you submit a purchase agreement offer, it is imperative you condition your offer on either the seller or you obtaining an HIR to confirm the property’s condition as disclosed on the TDS. The cost of the HIR is the premium paid to eliminate the risk of later discovery of undisclosed defects in the improvements.
Your agent will review with you the advantages of selecting an experienced, insured and preferably certified home inspector. When the seller’s agent has not obtained an HIR to hand you along with the TDS, it is your agent you turn to for expertise regarding the home inspection process and selection of a qualified home inspector.
How do I use a pest control inspection report?
A: A Structural Pest Control (SPC/Termite) inspection report is not a legislatively mandated seller disclosure in a California real estate transaction, unlike a Transfer Disclosure Statement (TDS) or a Natural Hazard Disclosure (NHD). Most conventional lenders do not require a Structural Pest Control inspection report or termite clearance.
However, the existence of pests such as termites adversely affects the value of property. Since this fact relates to value, the seller is compelled to disclose their presence before the buyer makes a decision setting the price and closing conditions in an offer submitted to the seller.
To best disclose a pest infestation, the seller orders an SPC report. The report is included as part of the marketing package for delivery to prospective buyers or their agents when they inquire about the property — before the seller enters into a purchase agreement with the buyer.
A Pest Control Certification — a certificate of clearance – is issued by the SPC company to indicate the property is free of infestation or infection in the visible and accessible areas. This certification is commonly called a termite clearance. If any infestation or infection is not corrected, it will be noted in the certification.
The SPC report separates the findings and recommendations into two categories:
- Section I items, listing items with visible evidence of active infestations, infections or conditions that have resulted in or from infestation or infection; and
- Section II items, listing conditions deemed likely to lead to infestation or infection but where no visible evidence of infestation or infection was found.
If a seller has obtained a Structural Pest Control inspection report which discloses the existence of conditions that have an adverse effect on value and does not inform the buyer of the contents of the report, the seller is defrauding the buyer. Therefore, the buyer may pursue the seller and the seller’s broker/ agent to recover the cost of repairs, either prior to or after the close of escrow. Provisions in the purchase agreement allowing the seller to entirely avoid the cost of termite clearance and repairs are not enforceable when known defects go undisclosed at the time the buyer and seller enter into a purchase agreement.
Further, when the seller does not provide an SPC report, the buyer needs to consider ordering their own Structural Pest Control inspection report.
Who pays to cure any safety hazards on the sale of a home?
A: Safety hazards are an important aspect of ownership a buyer needs to consider when looking into purchasing a home.
Safety hazards typically include:
- automatic garage doors that do not have a reverse safety device;
- garage door openers that are not installed with a sensor which, when interrupted or misaligned, prevents the door from closing;
- a water heater that is not anchored, braced or strapped;
- window security bars that do not have emergency release mechanisms;
- the absence of a carbon monoxide detector in a home that contains a fossil fuel-burning appliance, heater or fireplace;
- a lack of properly placed smoke detectors; and
- a pool which does not include any of the following:
- a surrounding fence at least 60 inches tall;
- a removable mesh pool fencing with a self-closing and self-latching gate that is key lockable;
- an approved safety cover installed for the pool;
- an up-to-code swimming pool alarm that sounds when it detects accidental or unauthorized water entrances; or
- doors of the residence providing access to the pool that are equipped with exit alarms or a self-closing, self-latching device with a release mechanism placed no lower than 54 inches above the floor.
As with any property defect, sellers are mandated to disclose safety hazards to prospective homebuyers. Sellers make these disclosures when preparing a Transfer Disclosure Statement (TDS). The seller’s agent also conducts a mandated visual inspection of the property and notes any property defects they observe, including safety hazards, on the TDS.
The seller’s agent hands the TDS and all other seller disclosures and property reports to prospective buyers who show an interest in purchasing the property. When a buyer submits an offer to purchase, they acknowledge receipt of the TDS and each additional disclosure they have received in the offer. Through the purchase agreement, the buyer negotiates to have the seller correct or pay the costs to bring the safety hazard conditions up to building codes.
If the prospective buyer, chooses not to negotiate for the seller to cure any disclosed defects as a condition of paying the price offered in the purchase agreement, the buyer has agreed to acquire the property “as disclosed” by the seller. Here, the buyer assumes responsibility for curing safety defects.
However, when the seller and the seller’s agent fail to disclose the safety defects prior to entering a purchase agreement with a buyer, the buyer has several remedies:
- demand the defects be eliminated by the seller before closing;
- call for the seller to provide a monetary concession in lieu of the repairs;
- renegotiate the purchase price; or
- cancel the purchase agreement.