To inspect or not inspect?

Asked by Heather Humphries, Lakeville, MN Thu Feb 11, 2010

I'm poised to pounce on a home I've been sitting on for 6 months and I'm debating whether or not to have it inspected. At first blush I realize that sounds fairly counter-intuitive being that its a foreclosure. Here's the thing, I happen to know first-hand that the owners were living in it until mid-January, that the ALL of the utilities are still on, and most of the mechanicals were less than 6 months old when I first viewed the home in August. I want my offer to be as strong as possible since I'm in need of financing and I am in the dreaded, highly competitive, low inventory price and location of under $150K in Crystal, MN. I'm putting in a high earnest deposit and would like opinions on whether or not this is a good idea. I haven't discussed it with my agent yet because I don't want him to have a heart attack (he's an inspection die-hard(I am too for that matter but still))....Thoughts?

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23
Ron Rovtar, Agent, Boulder, CO
Fri Feb 12, 2010
BEST ANSWER
Hi Heather:

Have it inspected! Even though you know a lot about the home, there could very well be problems that are not obvious to you. A good inspector will find issues you never thought of, including some that could make a big difference. I can imagine few things worse than getting into a home and finding I need to make major repairs. This Old House has been running a series about inspection nightmares. You can find the articles at the link below. Some of these are really funny, but you should take this issue very seriously!

Best,
Ron Rovtar
Prudential Real Estate of the Rockies
Boulder, CO
303.473.1926
0 votes
Nicole St. A…, Agent, Pensacola, FL
Fri Feb 12, 2010
The home inspection is the most important part of the home buying process if you ask me- choose a detailed inspector with proper certifications and never rely on a contractor to tell you what's wrong or not with your home.

A home inspection is a tool for negotation- in fact I just used it to get a brand new heater and hot water heater for a client of mine!

I actually bought a foreclosure myself without a home inspection (silly, I know) and still find problems that I never knew existed.

Think of how many people have been in and out of the house in the last 6 months.. that alone can cause problems.

I agree with keeping a short time frame for home inspection, as banks usually don't want to allow more than 7 days for inspection periods. Should you miss out on the time frame and get an inspection, you will lose your EMD if you back out. Just because problems arise, I never suggest putting up too much of a binder. At least 1% is minimum usually- and I have seen some banks with foreclosures requiring atleast 1.5% of purchase price as EMD. I agree that a faster closing and shorter home inspection time frame would do better than rasing the EMD.

Anytime you have a contingency, you do risk the loss of the earnest deposit. Just make sure if you choose a short inspection period, that you read the entire clause surrounding the inspection period. Some clauses require that you submit a copy of the home inspection as early as 2-3 days PRIOR to the end of the inspection period! Make sure you know your obligations under the contract and can fulfill them, especially as you decide to raise the binder, because you don't want to lose it due to a technicality or poorly written contract! If you are putting more than $5K down, it may be wise to consult a real estate attorney!

Don't be scared to ask your realtor anything- he or she is there for you. I would always suggest getting a 2nd opnion like you have here. =)

Good luck! Make sure you make the deadline of the tax credit if you haven't owned in the last 3 years- you must have your contract bound by April 30, 2010 and ready to close before June 30, 2010!
1 vote
Pelin Guzel, Agent, Dallas, TX
Fri Feb 12, 2010
Heather,

You will learn a lot of different information about the home with inspection that you will be amazed.
When buying a house, ALWAYS get an inspection.......
Good Luck,
Pelin
http://www.dallashomelist.com
1 vote
Jerry Cliffo…, Agent, Eden Prairie, MN
Sat Apr 10, 2010
Sure you want to save the $350.00, we all want to save and cut corners where we can. Consider what percentage of the overall financial committment being made you are talking about for a little more confirmation the property has no major hidden defects. Watching the property for 6 months does not give you the confidence there are no deep dark flaws does it?.

Get the inspection to re-assure yourself the sub-flooring isn't sub-standard, hidden mold, or hundreds of other potential things. It's cheap in the long run.
Web Reference:  http://bit.ly/d3gRrd
0 votes
Dianne Hicks, Agent, Rancho Bernardo, CA
Mon Feb 15, 2010
Heather
It idoesn't matter how tight the market is, many people who pay cash... still INSPECT.. INSPECT... INSPECT. That being said INSPECT (lol). You can remove inspection contigency in 5 days(so it is no big deal) but do it!!! All Realtors expect that you will inspect the home so no worries. That way if there is a major problem, you will know. For a few hundred dollars could save you tens of thousands down the line. It doesn't mean don't buy it, it just means know what you are buying.

cool pic by the way

Good Luck!!!
0 votes
Lenny Frolov, Agent, Brooklyn Park, MN
Mon Feb 15, 2010
$350 will seem dirt cheap if that inspector discovers something big. No matter who owns the property not everyone is aware of everything. Most REO's will give you a time frame to do an inspection even if you don't ask for one.
Web Reference:  http://www.lennyfrolov.com
0 votes
Mary Jo Daly, Agent, Chicago, IL
Sun Feb 14, 2010
Contact a good inspector in the area to find out any items that maybe hidden. The standard small fee for which you will be paying will give you peace of mind knowing what should be fix or could be wrong that need's to be repaired. A good inspector will explain items that are out of code or unsafe or just things to do so that you may save money on your heating bill. A good insoector will always have the clients best interest and explain in detail any all all faulty items that they can find and even help on items that may be a problem in the future. Main point GET IT INSPECTED! Good luck with this and and your future real estate deals!
Mary Jo Daly
Sudler Sotheby's
Web Reference:  http://www.maryjodaly.com
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Sun Feb 14, 2010
You're right - knowledge is power......you have gotten numerous "second" opinions (and 3rd and 4th opinions!!).......now you may proceed as you see fit, with that knowledge in hand...................you certainly have entertained all points of view............and are moving forward with your eyes wide open.......go for it!

Good luck with your new home.................let us know how it turns out!
Best wishes..............
Debbie Rose
Prudential NJ Properties
0 votes
CCC, Home Owner, San Diego, CA
Sun Feb 14, 2010
good, best on your purchase.
0 votes
Cameron Piper, Agent, Forest Lake, MN
Sun Feb 14, 2010
Heather,

Do the inspection, it will inform you now and will assist you in the future should litigation or arbitration arise.

Cameron Piper
Web Reference:  http://www.campiper.com
0 votes
Heather Hump…, Home Buyer, Lakeville, MN
Sun Feb 14, 2010
Actually, I wouldn't sue my agent. I wouldn't sue anybody. I want the house even if serious problems exist. My agent is recommending an inspection, not having an inspection would be my decision as a buyer, that leaves me culpable, not anyone else. Hence the reason for asking for a second opinion. I would have asked the same question even if my agent wasn't recommending an inspection, knowledge is power right?
0 votes
Ron Humes, , Lexington, KY
Sun Feb 14, 2010
Any Realtor that would recommend that you do not need to inspect needs to go ahead and turn their license into their state Real Estate Commission to spare their Broker the inevitable lawsuit.

Whether or not you inspect is your right but you cannot ask Agents to give you any advice to the contrary. Way too much liablility here. I don't always have my own personal investment properties inspected but, then again, I have been a Builder, my family is in construction and I can get a good idea of needed repairs on my own to determine financial liability. Every one of my clients and my Agents' clients have to sign a form with us that recognizes our Recommendation for them to inspect the property they are purchasing. It is called CYA.

Question for you: "If you purchased this property without an inspection, then found that something was horribly wrong with the property and you were going to lose money, would you sue your Agent if they did not think the inspection was necessary?" Dig deep for the answer. I think you will understand what I am getting at here.

Good Luck.
0 votes
Richard Leci…, , Tucson, AZ
Sun Feb 14, 2010
You need to protect yourself. Inspect!!!!
0 votes
Heather Hump…, Home Buyer, Lakeville, MN
Sun Feb 14, 2010
I will definitely get the home inspected. Thanks for all of the input. :-)
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Fri Feb 12, 2010
Sp Heather..........you must have gotten the point by now..........have the home inspected!

Now that the jury has spoken........what will you do??
0 votes
Jennifer Ric…, Agent, Valencia, CA
Fri Feb 12, 2010
Always have a property inspected its for your protection no matter the age of the property!
0 votes
LeAnn Czech, Agent, Edina, MN
Fri Feb 12, 2010
Having the home inspected is never a bad thing. You can look back after the inspection and say well I could have gone without and know your didn't miss anything. You cannot however go back if you didn't have an inspection. If you don't have one and something is discovered later you will kick yourself and possibly always wonder why you didn't just have one.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Fri Feb 12, 2010
Do the inspection--you may end up thanking yourself later.
0 votes
Brian McMurr…, Agent, Tawas City, MI
Fri Feb 12, 2010
Have the inspection. The strength of your offer will be in Price, Closing Timeframe and Cash vs. Mortgage. A strong EMD can also be positive as long as you have your contingency on Inspection & Financing.
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Thu Feb 11, 2010
So Heather, if I understand you, you want to waive the home inspection contingency?

I would have to agree with your realtor, I would never even suggest my buyer do that unless he or she was a builder who planned to tear the house down!! :)

If you want to strengthen your contract, maybe just shorten the time period for the inspection, and get one done quickly. Or, accept the house as is, but with the right to walk away if the inspection is unsatisfactory.

Just because people were living there with fairly new mechanicals, doesnt mean there might not be underlining issues - maybe the foundation has cracks or there are signs of leakage in the attic - things you won't know without an inspection, that could be very costly for you to repair.

Do yourself and your agent (we don't want him to have a heart attack, do we? ) a favor.....and have an inspection.
If you are putting down a large earnest deposit, that's good..........and should help you stand out from the others, but to risk buying without an inspections is a real gamble.

Best wishes................hope it works out!
Debbie Rose
Prudential NJ Properties
0 votes
Patrick Thies, Agent, Anytown, IL
Thu Feb 11, 2010
Regardless of what you may think the condition is, I myself would never buy a house without an inspection nor would I recommend that anyone else do that. It's not that expensive and worth the peace of mind to know exactly what you are getting. I have seen many homes that appear to be in great shape and come to find out that they have major problems after doing an inspection. Even if the report comes back clean, it's worth having the inpection done.

Just a side note. You mention this is a foreclosure. Most people that get foreclosed on are not happy about loosing their home. Some have gone so far as to leave little surprises for the next person. I have had situaltions where things were put down the pipes and toilets that caused major problems down the line. I've seen houses that have had small sections of pipes removed. This is not always the case with a foreclosure, but I certainly wouldn't count it out.
0 votes
CCC, Home Owner, San Diego, CA
Thu Feb 11, 2010
Inspection is more than than, it is also used as a tool to negotiate a lower price in some cases.

Inspection will cost from $300 to $500 (maybe more depending on property sq ft), but I believe it is cheap compared to a $150,000 investment. It is kind of a paid at front insurance.
0 votes
Dan Chase, Home Buyer, Texas City, TX
Thu Feb 11, 2010
I can think of a house that was being lived in. It was for sale. In the description the listing agent said " should be torn down".

Just because it has been occupied does not mean it is in good shape. An inspection is cheap insurance.
0 votes
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