I'm representing the Seller.

Buyer's do not plan on having an inspection and now it's time to go close.

We've done our disclosures.

It looks like they won't be asking for any repairs.

We're giving them a home warranty.

They signed the Buyer's Inspection Advisory with the offer.

Does this mean - the lack of an inspection is NOT SOMETHING I NEED TO WORRY ABOUT?

Thanks

Since you are in San Diego, I believe it definitely is something you need to worry about, unless, perhaps, you also are the seller and really did disclose everything you know.

I addressed a non-Client's question a couple of days ago where the seller's agent was the son of the sellers. Unfortunately, son had not lived in the house for 20 years and mom and dad's memories apparently were not what they used to be, so the disclosure forms left off a lot of what should have been disclosed. Unfortunately, this non-Client had waived his inspection, but now it appears that there are a lot of problems. And the thinking is, "How could someone who has lived in the house for 35 years not have disclosed the problems that the new owners were finding (backed up drains, windows that don't open, etc.)?"

The new owners wanted me to do a home inspection for the purpose of suing the sellers. I declined but tried to help them as much as I could without charging them for anything (they'll use me next time they buy). I don't do home inspections when I know the home inspection is for the purpose of suing someone; just not my interest. I'm a generalist, not an expert in anything, so I don't want to get in court for any reason whatsoever.

Too often, sellers don't disclose something that should be disclosed because they are so used to the condition that they literally have forgotten about it.

My domestic partner is a Realtor. When he does a listing and the buyers waive their home inspection, he comes to me and I do a free home inspection for the buyers. That's for newer properties, though. I do a pre-listing inspection whenever he lists something that is older than 10 years.

Our belief is that, since we both are in this for the long term, it is better to know everything up front and disclose it with either the qualifications that we know these problems exist and we're not going to take care of them, or we know these problems exist and we have either lowered the asking price or will provide escrow credits, or whatever. We believe such up-front disclosure will pay long-term dividends because the sellers and/or buyers will probably use either one or both of us for their next transaction.

I might work differently if I were back in Texas where I grew up and started my business career, but disclosure laws here are something else. And they can come back to haunt one many years later.

So the bottom line is, how comfortable are you that your sellers really did disclose everything? If you don't have that gut level feeling of comfort, spend $400 of your commission and get the buyers a home inspection. Do it now. They will respect you for it, and they'll probably come to you next time they sell or buy since their current Realtor "failed" them when it came to their own home inspection. ("Failed" meaning that even if the buyers were adamant about not "needing" or "wanting" a home inspection, the buyer's agent should have bought them one as a last resort to protect himself and his Clients, as well as you and your Clients, I might add.)

And since you and I "met" online, if you would like me to do it for you, I'll provide you with a $50 Agents Online discount. You can check out my company at www.BuyerPeaceOfMind.com. Note that many Realtors don't exactly like my company because they consider us too thorough and nitpicky. But I think that's probably what you want here.

Regardless of which direction you go, best wishes for everything.

ok - I have a different view. As a Listing Agent, my responsibility is TO THE SELLER. I am NOT responsible for buying a home inspection for the Buyer, who has his OWN Buyer's Agent, and may be violating my duty to the Seller if I do so. I just sold a home to a Buyer who did not do an inspection. Under our state contracts, that means the Buyer purchases the home "as is". We properly disclosed everything the Seller knew about that might be wrong with the home (wasn't much). I believe I properly represented the SELLER, who is my client!

I do a lot of inspections for listing agents here in San Diego, and they are getting more popular with each passing day. I think the reason why that is, is because when one lives someplace for a certain period of time, one becomes accustomed to all its quirks and idiosyncracies and forgets about them. So when one goes to "properly" disclose "everything the Seller knew about that might be wrong with the home," it turns out that everything that buyer might have wanted to know wasn't disclosed and, in many cases, are things that Seller would had to have known.

As an example, I did a condo inspection in a high-rise a couple of week ago. The sellers were the original owners, having bought when built in 2002. It was a huge 2400-SF downtown loft with two bathrooms. Being a loft, the arrangement of the furniture determined what was where. So we found that there was no hot water to the bathtub/shower in the left bathroom. They hadn't disclosed it; in fact, they were quite proud of the fact that they had taken such good care of the place during their three years of ownership and that "there's nothing wrong here" and that "you won't find anything wrong." When we found it, they said, "Oh, yeah. That hasn't worked since we moved in. That's why we created the master bedroom over there instead of over here."

If I were a Realtor, I would never list a property without having a home inspection done first so that I always knew everything there was to know, even if my Seller's didn't. For what Realtors get paid, I just think that's the proper way to go.

My domestic partner is a Realtor, and his listing presentation includes a free home inspection for the seller's. He wants to know everything there is to know about that home. No surprises in escrow or after escrow closes, and he doesn't want to depend on the buyer's home inspector to find everything. He feels more comfortable having two inspection reports anyway, since there is always the possibility that any individual home inspector could miss something of significance.

My domestic partner's a Realtor too, and there's no way she or I are paying for someone's Home Inspections.

No problems thusfar in 15 years.

Well I can say that pay for the inspection report can probably generate more listing business and depending on the volume you do it will pay for itself. I never thought about it, but because of so many "sue" happy people I may consider adding that to my listing presenation. If Agents would stop doing our business for almost "free", than pyaing $350 for an inspection is nothing but an added service.

The highest point in any transaction is the acceptance of the offer - both parties on a high. The lowest point in any transaction comes after inspections - both the seller and buyer are on the lowest point. The inspection can mean the deal goes away, or it can mean that the price everyone was previously thrilled with will now change (going down and upsetting the seller).

For agents who aren't familiar with doing whole house and pest inspections prior to listing, it likely isn't common in your area yet. But it is coming - having the inspection ahead of time does 2 things -One, the inspections sit on the table for the buyer, and even the buyer chooses to get their own inspections (which we encourge)we already had one so there will be NO surprises. The price we negotiate will stay the same because we already know.

If something large is found (like the home needs a new roof) and my seller won't have the money until the sale, we can disclose this and have money held in escrow at closing for the roof.

There are the naysayers who point out - what if the seller's home inspection finds expensive things wrong that now have to fixed and dislcosed and if the buyer would never have had an inspection? This could potentially cost your seller money that they would not normally have had to pay (fixing things).

Well, I am hoping that the day comes that there is no such thing as a buyer NOT having inspections. That is simply moronic and I am continually saddened when I see buyer's agents participating in the buyer not choosing inspections. The buyer can't afford $250 for an inspection, but can afford to purchase a home thousands and thousands of dollars that they might not have purchased at all! Makes no sense.

When you have the home pre-inspected, you remove buyer objections and sell for more, every time. It's possibly a "new" way of listing property, but it saves both sides a lot of stress.

What a very good post and a very intelligent way of looking at things. You should submit your post to the NAR magazine for publishing.

Wow, there is so much in this thread to absorb. I need to spend more time here.

Cheri, the point that sticks with me is this--if I am a buyer and visit a nice home with an available inspection, then I go to another home without an available inspection, I simply have to have a more assuring feeling about the first one. Even if I plan on getting my own inspection, the "up front" approach would impress me, even if subconsciously (hope I am spelling that correctly). I would think--here is someone who will be fair & easier to deal with. This does sound like an effective selling tool.

Russel Ray - I am wondering about the loyalty thing. Wouldn't the seller have to agree if the listing agent offered to pay for the buyer's inspection? Fiduciary and all that would apply, right? Am I following this correctly?

Thanks. Just trying to learn here.

Hey, Darlene.

If the seller trusts the Realtor that s/he hired, and the Realtor is 100% convinced that being upfront about everything, putting everything on the table, and the Realtor pays for the listing inspection (and even if the Realtor does not), then I would expect the seller to go along, particularly if the Realtor is paying for it. To me, it simply is a no brainer, especially in this day and age of full disclosure. Playing ignorant when one is expected to know isn't cutting it in the court system here anymore. In fact, I read a summary of one court case where the arbitrator (court forced them to arbitration) wondered why a Realtor, making 3% commission on the $800,000 house ($24,000) would not pay $399 for a home inspection in order to be as knowledgable as possible about the home. I like that arbitrator. Sure $24,000 is better than $23,699, but come one. There is a difference between out-and-out greed and being helpful. And everything I see from both home inspectors and Realtors using listing inspections indicate that there are fewer problems when using listing inspections, fewer negotiations over unexpected problems, and a higher closing price on the home. To me it seems to be a win-win-win-win-win situation (seller-seller's Realtor-buyer-buyer's Realtor-home inspector).

Home Inspection Waiver - It is usually a buyers agent that recomends an inspection and then obtains the waiver should the buyer decline. The same waiver could be obtained by the seller's agent in the event the buyer in not represented by an agent and is just a "Customer" as without the waiver, you may, at some point in your career have to defend yourself against allegations of misrepresentation of the condition of the property and remember Win, Lose or Draw, there is always those legal fees and disbursement to be avoided.

If one gets into a position where there are legal fees and possible disbursement, one probably already has lost.

I think that having a home inspection done prior to listing is a wise move for the Seller in order to know what to fix up prior to putting the house on the market. I disagree with providing the inspection report to the potential buyer because first of all, buyers will assume that the report is biased because the Seller paid for the inspection, and second, no two home inspections are identical. No home inspector is so thorough that they catch all the issues with a home. The point of a pre-listing inspection is to discover any issues that could hurt the marketing of the home or create unpleasant surprises at contract here in the Northeast.

I realize that the real estate laws in California may have different requirements, but here you are only required to disclose what you know about a property.

If a prelisting inspection reveals a new roof is needed, but the Buyer's inspector doesn't catch that, then the prelisting inspection could cost the Seller $10,000. I can't imagine a Seller being happy at getting that news and knowing that I encouraged them to do so and even paid for the inspection.

Your statement brings up a common misunderstanding about the home inspection industry.

It's not that no home inspector is so thorough, it's that, except for Texas and possibly a couple of other states, there are no true Standards of Practice for home inspectors. This probably results from the lack of licensing. Sure, there are national trade associations and state trade associations, but there happen to be about eight national associations and, of course, about 50 state associations. So an inspector in one state can belong to either a state association or a national association, but doesn't necessarily have to belong to both. And while all the assocations' Standards of Practice and Codes of Ethics are similar, the fact is that they are different. If they were not, there would be no need (and I use "need" very loosely) for so many trade associations.

Many of the problems within our industry stems from the fact that the industry is only about 30 years old, with ASHI, nationally, and California's CREIA being the oldest trade assocations, both founded in 1976. It's that youthfulness that has so many people—home inspectors, attorneys, E&O insurance companies, and, yes, Realtors—confused because there is no long track record about what to do, what to provide, what not to provide, etc.

So each home inspector has to determine his own business and inspection protocols and, as I regularly tell anyone who will listen to me, be persistent and consistent in sticking to those protocols unless new technology, new insurance requirements, new court cases, or new legislation require a change.

In my own area, Realtors (and Clients) want choices. So I developed a new mantra which I've been using since 1/1/05:

"One inspection does not fit all."

For example, many Realtors and Clients don't want a "thorough" inspection when they are buying a property to flip. They just want to know if the structure is sound (roof, walls, foundation) and whether the plumbing and electricity works. Everything else is going to be gutted and replaced, including appliances, exterior walls, windows, etc. So I created a BASIC inspection for them whereby we don't note the doorknob holes in the walls, the missing screen windows, the loose hardware on the doors/drawers/cabinets, and don't test any of the appliances.

For sellers, I have a LIST inspection whereby I don't describe their property to them (stucco walls, raised foundation, gable roof, composition roof covering, etc.). I simply note the major problems. It's a BASIC inspection for Sellers.

My "thorough" inspection is my STANDARD inspection. And then, for those who require a little more hand-holding (aka customer service) or who are not going to be at the inspection, I have PREMIUM inspections whereby I will represent them at the final walk-through to check on what the Seller claims to have had repaired and whether or not it was done properly. I'll also meet with the new owners as soon as they move in to answer any questions, introduce them to the intricacies of the home, etc.

And for the super rich (sports stars, movie stars, recording stars, etc.), I have my TECH inspection whereby I take licensed professionals (plumbers, electricians, roofing contractors, etc.) to the inspection with me. I do that because California has no licensing for home inspectors, and the super rich seem to want that extra level of knowledge / professionalism / customer service that a licensed expert can bring and which an unlicensed generalist home inspector many times cannot.

Sample prices for 2,500 SF
--------------------------
LIST - $349
BASIC - $389
STANDARD - $519
PREMIUM - $1,019
TECH - $1,819


It's the same here, and many Realtors fall back on the "ignorance" plea when problems arise. However, with more and more home inspectors offering pre-listing inspections, more and more courts are ruling against the ignorance defense. They seem to be stating that if a Realtor, who, here in San Diego, stands to make a 3% commission on a $500,000 average house, or $15,000, they should be spending a mere $349 on a pre-listing inspection to become knowledgable about the house. Knowledge is power.


Exactly.


Then our industry has real problems. However, so far I have never heard or read about a case where either the seller, seller's Realtor, buyer, buyer's Realtor, or a home inspector failed to catch a roof problem. I have read lawsuits where the buyers ignored a home inspector's recommendation for further evaluation by a licensed roofing contractor before close of escrow. And I have read lawsuits where the buyers took a $10,000 price reduction or escrow credits, ignored the roof, and bought new furniture or a new car instead, only to have the roof fail at the first rain and then sue everyone involved. It's a great society we live in (insert sarcasm here), but there is none better, either.

But the roof analogy is not a good analogy because of the fact that it is so visible. A better analogy might be if one of the two home inspectors missed the lack of firestopping around the chimney in the attic and the house burned down. But that's why home inspectors carry E&O insurance--well, some of us anyway--even E&O insurance is not required except in a couple of states.

Realtors, here's some help on finding a good home inspector. Rather than calling home inspectors to ask for price and then taking the lowest price (this might be one of those industries where you get what you pay for), do this for me:

Ignore the marketing materials that home inspectors send you, including mine. Simply call all the home inspectors in your area (or have your team members call) and ask them to fax you proof of E&O insurance, liability insurance, and trade association or business association memberships. You'll probably find that the great majority, perhaps even a supermajority, does not carry insurance and belongs to no associations. Why? Because at an average of $349 per inspection (if the average home inspector could maintain an average that high), most cannot afford it, particularly when just getting started. I, on the other hand, have business experience, so the first thing I do when founding new businesses is join an appropriate trade/business association and hire a good CPA and attorney familiar with the business. Unfortunately, about 70% of people who go into business for themselves don't have that type of business experience, so they shoot from the hip hoping that everything works out. As research reports will tell you, they often don't, to the tune of about 70% of businesses failing within five years. I wonder why (slight sarcasm).

My own E&O/liability insurance is $4,400 per year, and that's only because I am a franchise, so the insurance companies see me as one of 5,000 HomeTeam franchisees rather than a single inspector. I go out and get quotes each year as an individual, and they range from $5,600 to $17,600 per year. Yes, you read that right.

My BBB membership is $350 a year, and my membership in the National Association of Certified Home Inspectors (nachi.org) is $289 a year.

Now add the cost of marketing materials, CPA, attorney, tools of the trade, truck with graphics, etc. If one is lucky enough to do 100 inspections that first year and to average $349 per inspection, one just grossed $34,900. It's going to be very difficult to pay all the company bills, taxes, etc., and have enough money left over to pay oneself. So home inspectors will forego the big-ticket items (CPA, attorney, insurance, and memberships).

E&O insurance companies require several things, including, but not limited to (or not even including, in some states), trade assocation or business association membership, résumé showing knowledge and/or experience in construction / plumbing / electricity / whatever / etc. and/or appropriate training by the company and/or university and/or specialized home inspector training schools.


It seems to me that making those Sellers happy is why Realtors get paid such a nice commission. Surely it's not just because Realtors can sit down, fill in a few blanks on a purchase contract, throw a bunch of disclosure forms at the buyer, and then say yea or nay to the other side's requests, is it? I give Realtors more credit than that, perhaps because I was a Realtor in a different state a couple of decades ago and because my domestic partner is a Realtor with Century 21.

Also remember that knowing about a problem doesn't mean that one has to fix the problem. Here we call it selling "as is," which has a totally different connotation than it did when I worked in Houston in the late 1970s. Here it simply means here are the problems I know about and, along with any problems you or your inspections discover, we're not fixing anything unless it's legally required (smoke alarms and water heater seismic straps). So take it or leave it.

However, as I stated earlier, I believe that knowledge is power, so knowing about as many problem areas as possible allows a Realtor to price the property more appropriately, which probably translates into a faster sell, fewer surprises during escrow (resulting in fewer hard negotiations), and a faster (and more pleasant) escrow.

A long diatribe so early in the morning, and just my opinion, but I hope it helps those reading.

Happy Holidays!

There are home inspectors here who have missed the need for a new roof even after walking on it!

I think it is helpful for buyers to know what the home inspection covers and what it doesn't. Around here what you call a Standard inspection also includes the final walk through at closing for under $500. I have seen the team approach on some inspections and I think it makes a lot of sense, but the price you quoted is more than most of my clients would be willing to pay.