Are home inspectors deal killers?

Of course they do. But my definition of a deal killer may be different from yours.

A deal killer is not a home inspector who objectively discloses the condition of a house in a balanced and unemotional manner . A deal killer is a home inspector who makes mountains out of molehills and doesn’t know how to report defects in the context  of the reality that “no house is perfect” and that  if you try hard enough then you can find fault with just about anything.

Here is how a good home inspector would disclose, say, a problem with cracked walls:

• There are several cracks on the exterior walls on the south side of the house.  These appear to be old settlement cracks – probably a result of early foundation settlement.

• The observed cracks are all less than 5 mm wide and would be classified by the NHBRC as “slight” cracks which can be easily repaired and filled.

• Foundations and slabs of houses, which are often unavoidably built on problem soils in South Africa, often tend to “settle” during the first few years after construction.  This problem can be worsened if the concrete footings were too shallow, or too weak, or if the footings did not rest on virgin or well-compacted earth.

• It is suggested that these wall cracks should be repaired by removing all loose debris and then filling the cracks with a suitable flexible crack filler. This repair, together with repainting, should not cost more than R3 000.

•  If the cracks reappear or widen, then it is recommended that an engineer should be consulted  – who may suggest underpinning of the foundations.

A deal killer home inspector, on the other hand, may approach the same situations like this:

• The walls of this house have serious, fairly wide cracks which could be structural.

• The buyer should be extremely cautious and is advised to demand a large price reduction from the seller in case the walls collapse in the future.

Ethical estate agents are increasingly recommending home inspectors who they find to be reputable and who provide balanced and factual reports for buyers.

Leading estate agencies like Chas Everitt now regularly recommend that buyers should get a home inspection before signing an agreement of sale.   Reputable estate agencies want their  buyers to be fully informed because those who aren’t will come back to haunt their agents if defects are discovered after the sale has been finalised and the buyer has moved in.

Estate agents who have longevity and who are successful year after year do so because their buyers and sellers refer more business to them. Duped clients don’t refer.

A good estate agent treats a property inspection report as a useful tool to facilitate a fair and transparent deal between seller and buyer.

If the house has serious problems then the agent will help the parties negotiate a price reduction.  If a seller is unreasonably greedy and  refuses to budge, then the agent should consider advising the buyer to walk away.   By doing so the agent gains huge credibility from the buyer and will probably be involved in finding this buyer another suitable house.

A largely overlooked benefit of a home inspection is that, if the buyer walks away from a greedy seller on the basis of defects disclosed in a home inspection report, then these defects so disclosed become material facts which the seller is now legally obliged to disclose to the next potential buyer.

This is one reason why HouseCheck, as a matter of policy, retains ownership of all of its reports and routinely makes  HouseCheck reports available to the estate agent involved in the deal –  even though the buyer has paid for the report. The agent will naturally  show the report to the seller who then has to deal with the true condition of the house as revealed in the inspection report.

John Graham CEO of HouseCheck believes the factual and open disclosure of defects to all parties goes a long way to help make property deals transparent and fair and greatly reduces the possibility of nasty fighting between buyer, seller and agent post-sale.  “Factual home inspection reports shouldn’t give any party an unfair negotiating advantage,” says Graham.

Estate agents also don’t want to be blamed  if the home inspector misses a serious defect.  This is why a good home inspector is important to an estate agent’s business.

Graham says that if you as a home buyer don’t trust your agent to refer a competent home inspector  then you may want to consider engaging a different estate agent whom you do trust.

John Graham is the CEO of HouseCheck and is dedicated to making the property market place more transparent and fair for buyers, sellers and estate agents.  He can be contacted on 083 3109 766 or by emailing john@housecheck.co.za