So, here we go again. The 2021 Buffalo real estate market, as in the past few years, has an abundance of buyers for a limited number of listings. Everyone is trying to put the best deal together, so their offer might be the lucky offer selected. Buyers are having to go to many extremes, and many deals are 20, 30, even 40 thousand dollars over listing price. Some buyers are even waiving the home inspection thinking this might be the edge needed to win and be able to purchase their dream home.
Unfortunately, there are problems brewing. Waiving a home inspection can and will eventually cost someone a lot of extra money. Money they were not expecting to have to spend, let alone figuring out how to come up with the funds. I am going to address the problem with not having a full home inspection. A home inspection that adheres to the NYS Department of State Division of Licensing Home Inspector Licensing Act, NOT these “walk and talk” things that some are attempting to do.
Just a very quick note – these “walk and talks” are bad. They do NOT adhere to any standards, and most importantly in our market, do not adhere to NYS Department of State Division of Licensing Home Inspector Licensing Act. And they are a complete disservice to the consumer. I am writing another article that covers this topic and how this is a disaster just waiting to happen!
Simply put, not having a home inspection is a bad idea and can be problematic to every single person involved in the selling and buying process. There can be harm and damage to all involved, but in this article I want to concentrate on the buyer.
You may or may not know this, but when a new buyer moves into their new home, they will likely live in the home differently…we have all heard the story about the little old lady. Let me give you this example. The little old lady took a shower daily and it was a quick shower and nothing ever happened. Now the buyer moves in and the showers are longer, the water is a bit hotter, the shower is being used multiple times a day and things start to happen. The shower starts to drain differently and begins to slow or not drain at all. The next thing that happens is the buyer runs out to the local hardware store and buys some drain cleaner and dumps it down the drain and hopes that will fix it. Unfortunately, nothing changes and now a plumber is called to investigate and discovers the sewer line is bad. I do not know about you, but I know what a sewer line repair and/or replacement can cost. It is not in the hundreds of dollars most of the time, rather it is in the thousands. So, now the buyer must come up with 2, 5, or 10 thousand dollars to have repairs completed. Here is the problem. Many buyers are overextending themselves financially on the purchase price just to get the home and have very little money available to have repairs completed. OK, you might be thinking that this example does not happen very often. You would be wrong, and I hope you never have to pay for this type of repair. What about a roof leak? Let us run through the scenario once again. The leak is not going to fix itself, so now a roofing contractor is called to investigate and discovers that the roof is bad because it was improperly installed or has damage. Ever priced out a new roof? It is not cheap! What about a furnace problem, or a kitchen appliance problem? I think you get the point! All these problems are going to cost money to repair or replace and if a proper home inspection was completed these issues could have been avoided.
Buyers not having a home inspection completed are setting themselves up for failure and potential unforeseen financial burdens. Remember, most offers today are going over listing price and the buyers are overextending themselves financially and many are becoming cash poor. Where is the money going to come from to fix problems that might develop if the buyer has overextended themselves? In most cases there certainly is not any equity available yet, because they just recently closed on the property. So, now what happens? Repairs do not get completed causing additional problems to develop, or the buyer pays for a big-ticket repair and must cut paying other financial commitments. Let us not forget about lawsuits! After buyers find themselves buried in debt, they are going to want someone to pay for the problems they are experiencing. So, both Realtors® and the brokerage have a target on their backs, and the seller will surely be included in the fun. Before everyone says, no liability here because the buyer opted not to have a home inspection completed. It is not our fault may not help your defense. Why, because someone told them to waive the inspection. We need to remember one thing, it will still cost you time, money, and even future referrals and the worst part is the buyer still has a problem. We are problem solvers and should be providing the best experience and resources for our clients.
There is a very simple solution - have a home inspection completed. While there are many good inspectors in our market, there is a huge difference in what is provided. Yes, the word provided is the key word to remember as you continue reading. There is not one person or inspector that can predict the future, but one thing most of us know is after someone moves in a home things happen, issues develop, and things may even fail. So even with a home inspection, there still could be a financial burden just waiting to drain money from a buyer’s checkbook. That is not the case with our clients.
Here is the difference, you need to hire a home inspection firm that provides solutions to your problems, like providing warranty protection. Here at All Pro Home Inspection, we provide over $100,000 in warranty protection with every home inspection we complete (single family up to a 4-family). Why, because like the old bumper sticker said “Sh*t Happens” and we want to have solutions to your unforeseen problems. After the inspection when you call our office with a problem, we will hopefully have a solution for you, and not just say, “Well I am sorry, but it was working at the time of the inspection.” This is coverage you deserve!
Recently, I received a call from one of our referring partners and she said, “John how long is that roof warranty good for?” After I corrected her and told her it was called a Roof Protection Plan, and it is good for 5 years from the date of the inspection and comes with $3,000 in coverage for roof leak repairs, I asked who was having a problem. She said, well 4 years ago you did an inspection for my client and she has a leak. I said, “no problem. In her inspection binder she will find the flier for the Roof Protection Plan, and she needs to follow the claim instructions.” Long story short – the claim was approved and a check for $3000 is being mailed out to help correct the problem.
Let me talk to you about another client of ours. He insisted on getting a home inspection and refused to purchase a home without one but knew his chances of winning the purchase offer would be slim, if he insisted on having a home inspection as part of his offer. His agent was able to secure enough time for me to conduct a full home inspection prior to offers being accepted and opened. During the inspection, I reported that a Federal Pacific electrical panel was present, and that the attic had microbial growth present. Two issues that will require money to correct. Of course, neither issue was disclosed on the Property Condition Disclosure. His plan was to get estimates for these two issues, so he would know what his repair costs were going to be and give him guidance during the bidding process. Ultimately, I his purchase offer was not accepted, because he stopped at $25K over list price. You see, he was willing to overpay to a curtain point and knew he had to invest between $4K to $5K to correct the issues discovered at the home inspection. Sadly, the winning offer waived the home inspection. So, when the new owner moves in and discovers these issues what do you think is going to happen? I hope they have an extra $5K laying around. Let me wrap this up and say there really is not a good outcome by waiving a home inspection. Those doing so and others that are promoting this practice are only harming themselves and eventually it will catch up with everyone.
If you are a Realtor® reading this let me ask you this. Is your home inspector providing this level of service and products for your clients? If not, give us a call at (716) 772-2548 and we can have a conversation. If you would like to schedule John to come in for an office presentation to discuss this topic or other topics, give us a call.
For you buyers out there. Do yourself a huge favor…do not waive your home inspection. If your offer of $40K over list price is not good enough to win, there is always another home for you to purchase. Also, if you want the service and protection you deserve – call us to schedule your home inspection.
John Villella, Owner and General Manager
John Villella is a NYS licensed home inspector and General Manager of All Pro Home Inspection where we have been serving Buffalo, NY and the surrounding WNY areas for over 20 years. Give us a call at (716) 772-2548 to schedule your home inspection or schedule online at www.allprohomeinspection.com