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Frugal Homeowner®

 

 

Three Red Flags Too Many for Buyers


QUESTION:  We found a seller who was desperate to sell and offered us a deeply discounted sales price. But we thought it was really odd that he would only agree to sell the house “as is” and with no home inspection, so we walked away. We felt it was just too risky.----LR

ANSWER:  Good for you.  As my grandmother was fond of saying, “A dead fish stinks from the head”.  The red flags of low sales price, “as is” and not allowing a home inspection are a potential nightmare in the making. The seller most likely discounted the sales price out of guilt, knowing that the house had big, costly problems.

Let’s examine the home inspection process and why it’s not only in the buyer’s best interest, but the seller’s as well. 

If a buyer knows the physical condition of the house, it can provide a solid and “fair” negotiating edge.  Likewise, it can help the seller price the property and make it less likely that a sale will fall apart once a buyer is found.  In fact, a growing trend is for a seller to order a home inspection prior to listing the house.  It can later be the buyer’s choice to accept the home inspection, or order his own.  The seller can determine value upfront while assuring possible buyers that the house is sound.

Real estate professionals will tell you that the most treacherous part of the transaction often occurs right after the home inspection report comes in.  Adverse findings can crack open bi-lateral negotiations that sometimes can’t be remedied. By the seller putting the cards on the table upfront, the parties are more likely to close the transaction. Unfortunately, in today’s market of cash-strapped sellers and buyers, the home inspection can become an item that gets negotiated out of the real estate sale, especially where a new home is concerned.

For a few hundred dollars, a professional home inspector will review the major, visible and accessible components of the home and provide a detailed written report rating each element. Typically included are the heating system, central air conditioning system, interior plumbing and electrical systems.  The home inspector will also check the roof, attic and visible insulation, the walls, ceilings, floors, windows and doors.  Lastly, the foundation, basement and structural components will be assessed.  The objective report should include detailed information in a way that allows the customer to make informed decisions about the findings.

The home inspection is a valuable learning opportunity for the buyer to get to know how the house is put together.  It’s an opportunity to see the inspector demonstrate systems and to get acquainted with necessary maintenance chores. It’s also a great time to learn approximately how much shelf life various components have so that you can put a repair/replacement plan into place for the future.

By visiting The American Society of Home Inspector's site at (http://www.ashi.org/customers, you can learn more about the home inspection process, including view a virtual home inspection tour to see first-hand how the process works. 

You did the right thing.  Thousands of dollars off on a sales price might not even begin to cover the damages involved in this kind of purchase.

 



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