What Sellers and Buyers Need To Know About Property Inspections

In the article dated July 2, 2013, I talked about contingencies in a purchase contract and that one of the most common and important is “property inspection.” This article will go more in-depth to what a property inspector is looking for and some of the things a seller can do to be prepared.

The buyer hires and pays the property inspector to examine the following:

• Structural Components – such as the roof and foundation.

• Exterior Faults – such as places where water can seep in, broken and cracked glass and rot.

• Plumbing – such as drains, vents and waste systems

• Electrical – such as conductors, grounding equipment, distribution panels and even smoke and carbon monoxide detectors.

• Heating/Air Conditioning (commonly known as HVAC).

• Insulation/Ventilation – such as venting fans, attic and under floor insulation.

• Interiors/Appliances – such as doors, floors, stairways, counters, cabinetry, windows, all appliances that are built in or staying as part of the purchase agreement.

Property inspectors are considered an “expert generalist,” they don’t typically have specialized knowledge in areas such as termites, swimming pools, septic systems, landscaping, underground tanks or storage units (bunkers) and not all are experts on appliances.

An inspector is someone you want as a team member (creating your team is one of the focuses of the Professional Real Estate Investor Class). How do you find one? I would start by asking for a referral from your agent/broker. You could also contact ASHI (American Society of Home Inspectors) or the NAHI (National Association of Home Inspectors). Both of these associations require inspectors to pass test(s) and have performed a large number of inspections before they are certified. If you are buying rental property (more than one unit), you would also want to request a professional with this experience.

As a seller, here are a few things you can do to make sure you are prepared for the best possible property inspection:

1. Check all around the property to make sure all trash, debris, leafs and wood are cleared from crawl spaces to allow the inspector a clear view of the foundation.

2. If the property has been vacant or been rehabbed, make sure that the water, electrical and gas are all turned on and that all pilot lights have been lit.

3. Make sure that all light fixtures have bulbs to make it easier for the inspector to verify that they work.

4. Remove all dead trees and plants. Make sure that all tree limbs are trimmed at least 10 feet away from the roof. Trim all plants that are close to the house so that they aren’t hiding pests or moisture.

5. Check and make sure there is easy access to all HVAC equipment, water heater(s), electrical panels, sprinkler controls, crawlspace and attic.

6. If there are any animals that live at the property, make sure they are removed from the property. The idea is to make it as easy as possible for the inspector to do their job.

7. Have all filters (HVAC, stove, pool etc…) replaced or cleaned. This really helps the inspector believe that the property is well maintained.

8. Test all smoke and carbon monoxide detectors. Make sure they are located in the correct spots.

9. The likelihood is that you have already replaced anything broken or missing, for example: windows or windowpanes, screens, doorknobs, locks, light switches, other knobs, etc.

10. Make sure that the inspector can easily access all areas of the property, all exterior gates, and basement and attic doors unlocked, garage door, garage door openers.

The inspection is one of the biggest hurdles to get over in finalizing a deal, so it shouldn’t be taken lightly. Also, if you are a back-up offer and you are later offered the property, have your agent/broker ask if an inspection has already been done. You will want to have your own done, but having access to a previous inspection can help you determine if you do want to move forward.

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