When I was inexperienced buying homes and before I took up real estate as a sideline business, I used to think that home inspections would protect me from making a bad deal on a house. If you get a good inspector — someone with actual building experience — who does a thorough job of inspecting the home, it can be a lifesaver. Unfortunately that’s seldom the case, and more often the home inspection turns into a nitpick-a-palooza, as an overzealous inspector tries to prove his or her value to the buyer.
One of my first experiences as a homebuyer was a case study in everything that can go wrong with a home inspection. My first mistake was letting my real estate agent, a friend of a friend (another rookie mistake), suggest a home inspector from a nationally-known American company. The first red flag was in the inspection report, which was loaded with page after page of caveats like, “To get a more detailed evaluation of the electrical system we suggest an inspection by a certified electrician.” The preamble to the report on every major system in the house started with the same type of language. The question I should have asked myself at the time was that if I needed an electrician, a plumber, and a roofing contractor, then why exactly was I paying the home inspector?
It’s no surprise that house ended up being an endless parade of annoying repairs. Within three years first one furnace failed, then the other. One thing the inspector should have caught was that the siding was a brand involved in a nationwide class action lawsuit for warping, a major detail that somehow escaped his attention. Eventually we turned that house into a rental, used the rental income to pay down the mortgage principal, and dumped it for a loss.
Here are five potential pitfalls of a home inspection I learned the hard way.
Your Home Inspector May Know Little About Building Homes
Contractors make the best inspectors, but it took me a long time to learn that. Depending on which state you live in, a home inspector may have only a minimal amount of training and 120 hours, about three weeks, of field experience.
You End Up Focusing on the Wrong Things
Besides the siding, the biggest handicap of that house I bought was that the neighborhood was going to be annexed by a nearby big city and, when that happened, the property taxes would nearly double. A home inspection frequently overlooks the most unattractive qualities of a home, which include the neighborhood, the schools, taxes, and a hundred other factors not contained in an inspection report.
Strain Out a Gnat, Swallow a Camel
When my HVAC guy was replacing the furnace units in my old house, he pointed out interior rust on the burners, and several other indicators of imminent failure that the home inspector should have caught. Instead the inspection report noted only that the A/C unit’s grounding wire was not properly wrapped.
The Inspector Owes More Allegiance to the Agent Than to You
Letting your real estate agent suggest the home inspector is a bad idea. They’re not going to recommend home inspectors with a history of tanking deals. You should be especially wary of the inspector discussing details of the inspection report with your agent before you get to see it.
We’ll Try to Schedule the Home Inspection a Week Before Closing
Like any complicated moving thing, real estate deals have inertia — and the closer you get to the closing, the more pressure there is to keep things moving. A week before the closing, both parties are already packing and getting ready to move. If possible, schedule the inspection and ask for a copy of the seller’s disclosure before making the offer. Then you know up front about potential problems, and can figure the cost of repairs into your offer, or make it contingent on the seller addressing those issues.
In hot real estate markets like California, where sellers may have multiple offers to consider, asking for an inspection can be a deal breaker. Other times it can turn into a bug hunt, that causes everyone stress over relatively minor issues. A better strategy may be volunteering with Habitat for Humanity and learning how homes are built. You’ll work side by side with people who know what they’re doing actually building homes. What you learn in that environment will be invaluable when it comes to evaluating a property you want to purchase.