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Sun, Dec. 08

Pre-offer home inspections are not a good idea

I have been asked numerous times to perform a home inspection before the client writes the offer on the home. This happens more frequently lately with all the bank-owned properties on the market. The clients want to know if there are major defects before they write an offer.

I always try to talk the client out of this. I explain that their purchase agreement to buy the house has provisions for them to have a home inspection, and any other inspections they may need or desire (for example, termite, well and septic). If I inspect the home on Monday and deliver the report to them on Tuesday, and they decide to make an offer, there is no guarantee the home will still be available. An offer can come in at any time. Or the sellers could change their mind and take the home off the market.

So while it may seem to make sense to find out about the home before you write an offer, it really does not make sense to pay hundreds of dollars for a home inspection when you have no guarantee you can even buy the home. But, as the saying goes, the client is always right. If they still want a home inspection before they write an offer, I will do it.

I have also been asked to do a "walk-through" inspection before the client writes an offer. Usually they say they will pay for a full home inspection once they have the home under contract. I will not do this for a couple of reasons. First, what if there are major defects that you do not discover in a walk-through inspection? You can't tell if a furnace and air conditioner are operating correctly (or at all) by a visual inspection. You have to do various tests while they are operating. You can't tell if there is moisture, fire or structural damage in an attic or crawlspace without entering them, and I'm not going into them for a walk-through inspection. Everything could look fine at a walk-through inspection, but there could be major defects or the need for expensive repairs that would not be discovered.

A more important reason to not do walk-through inspections is they may not be legal. Home inspectors are regulated in Arizona by the Board of Technical Registration (BTR). The Arizona Statutes and Rules describe what a home inspection is (and isn't), and inspections have to be performed in compliance with the Standards of Professional Practice for Arizona Home Inspectors. An Arizona Certified Home Inspector (CHI) may get away with doing walk-through inspections in some instances. For example, if a client wants an inspection just for their own benefit - they are the owners and are not intending to sell the home. Or they are going to lease the home for a year and are not concerned with costs of repairs or life expectancies; they just want to know if everything works. If someone filed a complaint against a home inspector for an inspection like this, the BTR likely would not review it or discipline the CHI. This is assuming the CHI clearly disclosed in a written agreement the purpose and scope of the inspection.

Most home inspections are pre-purchase home inspections, performed for a client who is buying the property. So if the inspection involves a real estate transaction, I always advise home inspectors to only do a full home inspection in compliance with the Standards of Professional Practice. If it looks like a lemon, smells like a lemon, and drives like a lemon, then it's very likely a lemon. If someone files a complaint against a CHI, and the inspection involved a real estate transaction, the BTR may consider this a home inspection no matter how many disclaimers there are in the inspection agreement.

There are exceptions to this. For example, in Phoenix there are investors who like to have a CHI do a walk-through inspection before making an offer at an auction. These auction homes are often only available for viewing for short times, and the utilities are rarely on. With these limitations it would be impossible to perform an inspection that complies with the Standards. Home inspectors can legally do walk-through inspections on these type homes, but again it is critical the inspection agreement describes the scope and limitations of the inspection.

It is legal for a home inspector to not inspect a component during a home inspection. This is in the Rules for a good reason. A few times (especially after our 1999 hailstorm) I had clients tell me they know the roof shingles are beyond repair. The seller had already contracted and paid for a licensed roofing contractor to replace the shingles. So there is really no reason for me to go on the roof and inspect the roof shingles, because they wouldn't be there next week. I would lower my fee a little and, as required by Arizona, I would have the client request in writing that I not inspect the roof.

Some inspectors are using this rule to do walk-through inspections. They have a written agreement in which the clients request that they don't walk the roof, enter the attic, operate the furnace and air conditioner, test all the windows, and look at other components that are required in the Arizona Standards. Technically, an attorney could argue the inspector complied with the Rules by having the client exclude all these items. But what if an unhappy client files a complaint with the BTR? If it smells like a lemon...

Randy West owns Professional Building Consultants in Prescott. He is state-certified and has performed more than 6,000 home inspections in the Prescott area. West serves on the Home Inspector Rules and Standards Committee for the Arizona Board of Technical Registration. Contact him at randy@inspectprescott.com.

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