Is what you see what you get, upside down or right-side up? When a buyer goes under contract on a home or commercial building, the due diligence period begins. Now it is the buyer’s chance to unearth anything that needs repair or replacement. An attorney or title company will look for defects in the title, encroaching lot lines, hidden easements, etc. Most of the time it’s a material defect that needs attention, and this can only be revealed by home inspection by a knowledgeable inspector. Sometimes, even an experienced inspector can get lazy and make a mistake.
I once represented a buyer who was under contract on a home in Kennebunkport. The inspector, whom I’ve used many times, claimed some of the basement sills were “punky” citing “moisture deposits” as definitive evidence. I trusted him, so we went down the road of getting estimates for repair. Before the estimated $18,000 was presented to the buyer we took another look. With the owner hammering, or at least trying to hammer a 20d four-inch nail into what was supposedly “punky”, we discovered the sill did have the moisture deposits, but this retired fireman could not drive the nail in more than half of an inch. The sill could not have been more solid. In fact, a new sill would be less dense than this 200-year-old one. Old wood used in the days when this house was built came from trees that grew at their own pace, not accelerated by fertilizers. So, their rings were closer together and they were higher denser than today’s wood. Needless to say, I never used that inspector again, and I’m still amazed he made the diagnosis without further investigation. If something looks punky, you find out for sure!
The price agreed upon in the purchase and sale agreement reflects all the known defects, visible wear, and all obvious conditions regarding the property. The buyer expects that if no further defect is found, the sale will close at the contract price. If the septic system, for example, is inspected and deemed at “end of life,” another negotiation begins. Since the buyer’s expectation was that the septic was in good working order, a major repair must be factored in, usually with a price reduction to match the cost of replacement. The unhappy sellers will likely balk at footing the entire bill knowing they will not benefit at all from the replacement (except to sell their home!). Then, it comes down to who wants the sale more, buyers or sellers. Some compromise is likely, but the seller really should pay for it because the contract price reflected a working septic system, and that is not the case now—there’s virtually no septic system at all.
I often recommend homeowners pay for their own “pre” inspection, a practice that has yielded a number of benefits. Firstly, a pre-inspection will reveal any issues that the owner was unaware of that should be addressed. This reduces the list of negatives buyers subconsciously count up in their minds. Some inspection companies will offer to re-inspect after repairs are completed, for a nominal fee. Secondly, a pre-inspection is welcomed by buyers who will have a higher level of confidence in the sellers’ integrity and may even forego their own inspection, although a seasoned buyer agent would recommend getting an independent inspection. Lastly, a pre-inspection brings peace of mind that can’t be discounted, for buyer and seller.
Home inspections are essential, in any case. Commercial inspections are more complex and expensive. In commercial inspections, the myriad of systems that need to be looked at requires a deep knowledge base, otherwise costly mistakes can happen. My first commercial purchase was a mixed-use building in South Portland which had a flat rubber roof inspected by someone from the “best” inspection firm in Portland who had no idea what he was looking at. He blessed it as having “at least ten more years of life”. Ten minutes was more like it. Leaks and endless patches ensued. Having closed on the property I had no recourse except to demand my $5,000 inspection fee be returned. For future purchases, I always used multiple inspectors who were experts in their respective fields, and the cost of inspections was much less as well.
It all comes down to trust. Before you select your home or building inspector, either as a buyer or seller, get as many reviews on that inspector as possible. His mistake could become your biggest headache if you don’t.