The Burbank Association of REALTORS® shared this on their facebook wall and we liked it so much we thought we’d share it here!
“From understanding licensing to hiring specialized experts, prepare your clients for the home inspection process. These six tips can help.`
In the typical home purchase, the buyer receives only one expert review of the residence prior to purchase — the home inspector report. While economical and useful, these reports have limits that must be acknowledged. Too often, the significance of this report is overstated, leaving the buyer and seller exposed to unreasonable expectations, which can lead to unhappy clients, disagreements, and even lawsuits. There are several important considerations that you can help your clients understand about their home inspector.
1. Some home inspectors are not licensed
Some states, such as California, have no licensing or state certification for home inspectors. Others, such as Arizona, certify but do not license home inspectors. Many states, including New York, New Jersey, Mississippi, Washington, and others, require home inspectors to be licensed. A license or credential is not a guarantee of competence, but an indication the inspector has completed a minimum level of education.
There are a number of credentialing organizations, including California Real Estate Inspection Association, American Society of Home Inspectors, and the National Association of Home Inspectors. These organizations each have their own qualifications, exams, and code of ethics. Your client should look for an inspector certification by one of these major organizations. Do not accept so-called “company certifications,” which are simply in-house programs and not subject to any industry oversight.
2. Insurance is important
Unfortunately, an inspector can occasionally miss important items that could point toward a significant repair issue. In the event this occurs, your client will be disappointed if the inspector is unable to pay for the repair of the neglected item. Your client should hire an inspector with current liability insurance.
3. Be prepared to recommend a specialized expert
An inspector will sometimes report on a significant item that requires particular expertise. For example, if a question is raised regarding soil stability, your client may need advice from a soil engineer. If a floor seems too bouncy or there are cracks in walls, a structural engineer may be needed. An architect or general contractor might be needed to determine how an unpermitted addition might be legitimized with the building department.
The home inspector is the first but not necessarily the last word on things. Recommend your client bring in further expertise if the report indicates a problem.
4. Home inspectors do not eliminate all risk
The home inspection is only visual. The inspector cannot see inside walls to confirm that the framing is solid or that the plumbing or wiring was properly installed. Exterior finishes typically cover a home’s most important elements, so inspectors look for clues. However, the absence of cracks does not mean a wall is strong, and the absence of stains on the ceiling does not guarantee the roof is watertight.
The typical home inspection contract alerts your client to these limitations. Be sure your client reads and understands this. This is critical to help remind them that the inspector will not tear open walls, expose the waterproofing of windows, or remove any part of the home. The risk of potential hidden problems remains, even after the best visual assessment of the property.
Your clients believe that your visual inspection (“AVID”) and the home inspection protects them from any problems with the home — but it does not. Help them understand, so their expectations are reasonable.
5. Pick the best, not the cheapest
Your client is hiring expertise and presumably wants the best. Home inspection prices vary and it can be tempting to hire the cheapest. There may be a reason a company’s price is low. Are they new? Do they take far less time on the inspection? Do they have a poor reputation and need a catchy low price to get business? Home inspections are a minuscule cost relative to the total price of a home. Encourage your client to not worry about the price and hire the best available.
6. Let your client analyze the report
Real estate agents are not construction experts. Your expertise is in finding properties for buyers and finding buyers for sellers. You may want to consider offering an opinion or suggestion about the content of an inspection report. That advice should come from a construction expert. Your client should talk to a contractor or other expert about the report if there are questions.
Home inspections are a valuable tool for the home buyer and should be a routine part of the homebuying process. Manage your client’s expectations to enhance a successful relationship. The risk in buying something built by someone else can be reduced, but not completely eliminated. With a qualified and competent home inspector, your client is doing what can reasonably be done.”
I heard nothing but great things from everyone who attended… I was even tagged in a post which claimed, “I had a ton of fun and absorbed a lot of useful information. I recommend everybody in the Real Estate Business to go listen to Matt!”
I had the pleasure of organizing the program for this event and I want to say thanks to everyone who made it a success: our YPN committee (big thanks to Ramiro Rivas for finding us the space, and hauling over chairs from your office with Mark Van Dellen, and to Richard Kim from B&O for the space, the sound, the TV screens… We were so lucky you allowed us your amazing space for our event. A huge thanks to Jim, Jamie, and Matt for what I thought was the perfect amount of information, I had some great take-aways from both of your presentations. And of course to everyone who came out, and dealt with Pasadena parking to get some education, and those who trekked over to Picnik pasadena after to socialize.
Good times y’all! I hope you all Save the Date for our next YPN event. DODGER NIGHT on July 29th. (And we are looking for one or two sponsors for that event to cover the cost of the Bus. Let me know if you’re interested in sponsoring!)
Bang & Olufsen in Pasadena is lending us their new showroom for a special YPN “TECH TALK” event! Learn about marketing in the age of technology with expert tips from the best in the industry:
Keynote Speaker: Matt Ahlman (aka Mr. Facebook) – VP of Social NetworX, a leading social media company, which provides tech training to real estate professional across the nation – will be sharing his top apps for REALTORS@ and discussing strategies for utilizing Instagram, Pinterest, Video, etc. to generate leads!
Then veteran digital marketing professionals Jim Gibson & Jamie Avera from ReachLocal – a globally recognized online marketing company specializing in marketing local businesses online – will be sharing some simple tips on how to significantly improve your online marketing!
As if that’s not enough to pique your interest, we’ll be heading over to Picnik Pasadena directly afterward for our monthly Happy Hour Networking Mixer!
Every week we teach classes at real estate offices and associations across Greater Los Angeles. Feel free to join us on June 13th at the Arcadia Association of REALTORS@ for one of our most popular classes as of late, “Dealing With Unpermitted Construction.” John LaRocca will be the instructor and will be sharing his knowledge regarding when a permit is required, the steps needed in order to legalize a unpermitted work, and much more.