In negotiating an inspection release with a seller, does anyone have written material that points to the value of our buyer-client being reasonable with the seller, by concentrating on significant items rather than nitpicking a laundry list of small items as well as major issues?

I have a great piece for you. Let me go find it.

These are from the California Real Estate Inspection Association (creia.org).

This is the best: http://creia.org/oldpressreleases/050102.htm

This might also help you: http://creia.org/oldpressreleases/040102.htm

They have their press releases archived for the last five years or so. They are monthly press releases, and many of them are very helpful.

http://creia.org/press/index.htm

I like your articles Russel they are right to the point. I tell all of my clients that the seller is responsible for full disclosure only. They do not have to repair anything and for that matter they do not have to sell you their home. The report can be used as a great bargaining tool, but it only has teeth if you are a good negotiator!

I for one am a seller who fell victim to the "I want out due to the inspection." The purchase agreement and counter offer the buyer accepted stated they would make repairs to the garage door. Ok, inspector comes, finds a handle missing on our pool equipment and some burned out light bulbs. Seller decides they are "concerned" with results of inspection...and cancel the contract. The buyers were realtors, obviously found another home they liked better, and used the inspection clause as the way to cancel. Their inspector could not believe it himself, as we called him to see if we had misread the inspection. Sickens me that realtors use that clause and get away with it, and there is no protection for the sellers on this. This is a 3 year old home, with 7 years left on the structural warranty, 2 years left on the pool. Burned out light bulbs are a reason for a buyer to cancel? There should be a law against it. Oh, and guess what? I don't get to keep the earnest money either, according to my realtor and broker...unbelievable!

I recently did an inspection on a home where I found numerous defects, including two roofs (home and garage) that were in need of replacement. Also many numerous smaller items in the home. Septic inspector also found the septic in need of replacement. Bug inspector found signs of carpenter ant damage as well as myself seeing carpenter ants in the home. Seller also balked at my report stating that I didn't know what I was talking about on many items (but that's neither here nor there as he has no choice but to accept the report as he is not a home inspector), Seller balked at the septic inspection report, and seller balked at the bug inspector report. Seller wished to fix the smaller items but only repair one roof and not touch the septic. My client decided to walk. Seller balked at the withdrawl, and after attorney's went back and forth, the seller got to keep the earnest money because the cost of legal fees to get the money back would have exceeded my clients earnest money quickly.

I guess it all depends on how much you are willing to fight and go the distance as to who may ultimatley win. Of course each state's laws are different.

Unfortunately, the purchase contract that most buyers and sellers sign give the buyer the option to cancel the purchase contract if the buyer isn’t satisfied with the inspection report. Also unfortunately, there is no definition of “satisfied” anywhere.

In a sellers’ market like the past six years here in San Diego, many buyers seem to put forth purchase contracts just hoping to get a home, any home. A week after making one offer, they find that the other home they really wanted is now available because the first buyers couldn’t get financing, or they kept looking just in case their offer wasn’t accepted and found something they liked better. There’s just any number of reasons. Everything that that I’ve been reading indicates that Las Vegas is a very hot sellers market just like San Diego, perhaps more so. So although it is an inconvenience to sellers, more so in a buyers’ market, houses eventually do get sold.

Perhaps sellers’ Realtors should start inserting a clause that says, “Buyer may not cancel the purchase contract based upon the home inspection report unless major defects are discovered which would require an estimated minimum of $1,000 in total to correct AND seller refuses to correct major defects, unless both seller and buyer agree to such cancellation.” Or something like that (I’m not a Realtor or an attorney; just a lowly home inspector).

I did an inspection a couple of years ago for some people relocating from Boston. Absolutely nothing wrong with the two-year-old house except that the view of downtown San Diego, the ocean, and the Mexican islands was so nice that they had removed all the screen windows and sold them. Buyers canceled the contract. I did another inspection for the same buyers, same neighborhood, same view, three blocks away, six weeks later. A few different problems, but the screen windows were there. Now any good Realtor, especially here in San Diego with that house going for $780,000, would have paid $500 to have screen windows installed. Missing screen windows, though, was not the story in and of itself. Turns out that buyers were moving here from Boston because (1) San Diego was as far away from Boston as they could get without leaving the mainland, and (2) Boston had bad memories. Why? A year earlier their young child had fallen out of the third-story window of their brownstone and died. So when all they saw in my home inspection report was missing screen windows, they just couldn’t handle the emotions, regardless of how easy it would have been to have screen windows installed.

You never know. And I quit pretending to try to determine people’s reasons for doing things. I accept them and move on. So I’m not going to pretend that I know why burned out light bulbs might cause a buyer to cancel, although based on the screen window scenario, I can imagine any number of possibilities. That’s why I send this email to the listing agent well before the inspection:

quote

Dear [listing agent name}:

This is confirmation that The HomeTeam Inspection Service is scheduled to conduct a home inspection at [time] on [day, month, date, year] on the property you have listed at the subject address.

The following ten tasks will ensure a better inspection for your buyers, thereby creating fewer items of note in the report and making escrow go more smoothly for all concerned:

1. Confirm that gas, electric, and water service are on, including the main gas and water shutoff valves, and the main electric circuit breaker.

2. Confirm that gas and water shutoff valves for individual appliances and components are on (furnace, wall/floor heaters, cook tops/ovens, sinks/toilets, etc.).

3. Confirm that all circuit breakers in the electric panels are on for circuits in use.

4. Replace burned out light bulbs, screen windows, and screen doors.

5. Have excessive storage and/or furnishings moved away from interior/exterior walls.

6. Replace or clean dirty heating and cooling filters.

7. Replace dead batteries in smoke and carbon monoxide alarms.

8. Ensure that pets are secured or removed at time of inspection.

9. Notify alarm services of the date and time of inspection.

10. Ensure that inspectors will have access to all areas. Locks should be removed or keys available.

Please feel free to contact us if you have any questions or if we can help in any other way.

Russel Ray, President and Owner
unquote

Russel,

Very well said, I sure do wish my agent had inserted the clause above. I do know that it was nothing like that, I live in Vegas, and the buyers were realtors from California. They know the ins and outs of how to get out of a contract, apparently. I even read a realtor on this board somewhere asking how to get their clients out of a contract. They said, well, I could always resort to the "I don't like the inspection results." That infuriated me, confirming my belief that it is a widely used way to get out if you change your mind. I will see to it, the wording you used above is inserted into any offers going forward. The story you told is heartbreaking, but I believe that scenario is the minority, not the majority. I hope soon that a clause similar to the one you stated above can become part of a purchase agreement permanently so as to make unscrupulous realtors think before they resort to that.

Not only unscrupulous Realtors, but simply unscrupulous people. Here in San Diego, it is very much a me, me, me society. I grew up in the South, and although I've been here for 12 years, I'm still not use to that type of attitude. I bought my first home on a spit and a handshake (he spit, I shook hands). Doesn't work that way anymore.

Many buyers, especially here where a 640 SF shack on 641 SF of land in a bad neighborhood goes for $500,000, get buyer's remorse and use the inspection to get out of the contract. Too many people also think that any home they buy should be absolutely perfect, and if it's not, then the sellers should make it so. When sellers balk about every little thing that some of these buyers ask for (like burned out light bulbs), then the buyer walks. Buying and seller homes ranks right up there with used cars, I think.

In a sellers market, some Realtors also request more money than typical as earnest money. There's just any number of ways to do things. Hopefully, though, everyone wins, but there are times when that doesn't happen, and that truly is frustrating. By the way, I was a Realtor a couple of decades ago in a different state.