Inspections are a crucial step in buying a home. Even though some buyers have waived home inspections to compete in intense bidding wars, it’s always a risky decision.1 While the vast majority of homes under contract do reach the closing table, no one likes to see transactions fall apart. Home inspections can play a significant role in moving properties back on the market. Even if the inspection doesn’t sink a deal, you want your buyers to feel confident that you’ve got their back during every step in the buying process. Since inspections affect buyers’ opinions about what they’re purchasing, it’s essential to fine-tune this aspect of your work.
Counsel Your Buyers
When buyers ask for professional recommendations like inspectors, you should always give them options. That way, in addition to offering superior customer service, you’re limiting your liability. You won’t be staking your reputation on one individual or tempting buyers to wonder if your inspector has a vested interest in helping move the transaction forward instead of pointing out issues with the home. Preface your list with a statement similar to this: “Here are several inspectors other clients have used with satisfaction. Feel free to select any of them or retain another inspector of your choosing.” Ideally, you should provide different lists for different situations. Older homes, for example, aren’t typically evaluated against today’s construction standards and building codes. Only an inspector with expertise in older construction techniques can accurately assess their condition. Likewise, condominium inspections require different expertise than single-family homes. A qualified inspector will look beyond the unit’s walls and assess other areas of concern like attached crawl spaces, firewalls, common-use zones adjacent to the unit, etc. Also, be ready to suggest specialists who can evaluate particular issues and concerns, such as:
- Structural engineers
- Roofing experts
- Mold, asbestos, and other toxic substance specialists
- HVAC inspectors
- Flooding experts
- Septic system inspectors
- Arborists Pest inspectors
Which inspectors belong on your list?
Sometimes, it’s challenging to find excellent inspectors. For example, roughly half of U.S. states don’t require home inspectors to be licensed. In those locations, it’s particularly critical to research qualifications. Where home inspectors are regulated, license requirements vary by state (in the U.S.) and Canadian province. Two popular certification programs—ASHI and InterNACHI—can help you identify credentialed inspectors. See above. In addition to consulting these organizations’ membership directories, ask other agents in your office who they’ve used and recommended. Since inspectors can significantly impact buyers’ attitudes toward a house, it’s essential to evaluate their “people skills,” too. For example, are they adept at answering buyers’ questions and managing expectations and interactions during the inspection? Finally, does the inspector encourage an atmosphere of mutual respect and collaboration with real estate agents? The best ones recognize that various agents like to handle inspections differently and aim to make reasonable adjustments.
Should you attend the inspection?
Real estate professionals often hold strong and differing opinions about the best way to manage their buyers’ inspections. Ultimately, the decision to attend—or not—may hinge on what the seller requires and what your broker prefers. If the seller wants an agent to watch over the property, you don’t really have a choice. Would you rather see your buyer spend a couple of hours alone with the listing agent and possibly the seller too? (Sellers who are remote workers may be reluctant to leave.) TBR March 2022 page 5 When attending is optional, the decision involves weighing your duties to buyer-clients against potentially increasing your liability. ABR® Designation Course instructors also have differing opinions about handling buyers’ inspections. For example, Gonzalo Mejia, ABR®, AHWD, CIPS, CRB, CRS, e-PRO®, GRI, PSA from Jacksonville, FL, believes it’s better not to participate.
“Too often, I’ve found that agents are tempted to step outside their area of professional expertise and answer questions that belong with the inspector,” says Gonzalo. “Sometimes, I’ll step in for the second half of the inspection so I can hear the key findings.”
On the other hand, Brian Finley, ABR®, e-PRO®, SRES®, and 2011 REBAC Hall of Fame inductee based in Edmonton, AB, thinks buyer’s reps should always attend their clients’ inspections. “We should be there to assist, but not to be a party to the inspection,” says Brian. “If an issue comes up and I didn’t attend, how can I claim I was working in the client’s best interest?” says Brian. “It’s much harder to convey the exact nature of the problem if I haven’t seen and discussed it firsthand.”
Brian and Gonzalo acknowledge that there are valid points on both sides of the debate. And they agree on the core issue: it’s not about whether you attend, but what you do while you’re there.
Best practices at inspections
Ideally, you already know the inspector your buyers have chosen. If not, give them a call to learn more about how they prefer working with buyers and share any concerns you may have. Home inspections should always be a collaborative effort that helps buyers become familiar with the inner workings of the property they plan to own, while also acknowledging the inspector’s and the agent’s respective areas of expertise. Don’t try to “run” the inspection. Instead, let the inspector set the ground rules with your buyers and answer their house-related questions. Facilitate the inspector’s ability to do their job. Some inspectors welcome buyers tagging along, but others find this distracting, potentially causing the inspector to overlook details or run out of time. Bring useful tools. One way to help buyers benefit from their time in the home is to bring a spare notepad, a tape measure, and a fan deck of paint colors so they can measure rooms for furniture or imagine new colors for their walls.
Responding to the inspection
Depending on the circumstances, you may need to remind buyers that inspections are not done to renegotiate the contract. Instead, they are meant to alert buyers to expensive repairs or significant issues that might affect their safety. How should your buyers respond? It depends. Each market operates under different conventions. Typically, buyers ask the sellers to make repairs before closing, although it’s important to consider the potential quality of the repair—will it be a cheap, quick fix? It may be preferable to seek a price adjustment or closing credits and let the buyer make the repair. Buyers should also consider the implications of asking for “too much.” Sellers can counter with an offer to do something less or completely decline the buyer’s inspection requests. In some cases, declining the buyer’s inspection requests can terminate the contract. In terms of seeking price adjustments, it can be helpful to ask the listing agent if they are aware of any issues with the home before submitting your buyer’s initial offer. That way, it’s easier to justify a price reduction if problems are found. It may be challenging to navigate this stage of the transaction. Still, inspections offer valuable opportunities to cement your role as a buyer’s advocate, helping clients feel confident that you stand by them in every step toward reaching the closing table!
5 THINGS Homebuyers Need to Know About Inspections
A home inspection provides a valuable opportunity to learn about the property you want to buy and how to care for it. Inspections also help you identify red flags—problems that could affect your safety or require expensive repairs.
If you’ve included an inspection clause in your purchase contract and the seller has accepted your offer, here’s what you should know about what happens next:
(1) You must select your home inspector. Your buyer’s rep can provide a list of inspectors they know and respect, but the choice of inspectors is entirely yours, and you aren’t limited to your agent’s list. Regardless of who you select, you must call and schedule the inspection.
(2) You’re working under tight deadlines. A standard inspection contingency clause allows five to seven days from the contract date. However, buyers may shorten that window to two to four days in competitive markets. Regardless, you need to move quickly to complete the inspection.
(3) You might need more than one inspector. For example, a radon inspection is standard in many areas and must be scheduled immediately. It’s also possible that your home inspection reveals areas of concern that require additional expertise, such as the presence of mold or pest damage. Ideally, you want to complete all inspections within the inspection period instead of asking the sellers for an extension. But, again, your buyer’s rep can advise you on your options in situations like this.
(4) How to get the most from your inspection. Most inspections last two to three hours. During that time, the inspector needs to cover an extensive list of details. Some inspectors welcome buyers’ questions during the inspection. However, others find questions distracting, making it harder to concentrate on their job. For the best results, ask your inspector how they prefer to work. Also, limit your questions and comments to specific points concerning the home inspection.
(5) Work with your buyer’s rep to respond to the inspection. All homes require periodic maintenance, so don’t be surprised when your inspector points out numerous details and suggests minor repairs and updates. If the inspection didn’t disclose any significant issues, you can feel comfortable moving forward and completing the sale. However, if substantial concerns are revealed, you’ll need to consult with your buyer’s rep on your options, such as requesting repairs or closing credits, or even terminating the contract. At this point, your decisions depend on the magnitude of the issues and how badly you want to purchase the home.
