Don’t Let a Home Inspection Kill Your Deals

Realtors know that almost every home transaction requires home inspections.  When it comes to ways to kill a deal, home inspections are often a leading culprit, so it’s worth discussing the issues involved.  Over the last ten years, I was involved in over 350 transactions, so I’d like to share my experience with some of the issues and solutions I’ve found over the years.

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When it comes to home inspections, I like to categorize ‘inspectors’ into two categories: 1) the general licensed home inspector (or specialized inspectors) who provide an analysis and a report for a fixed fee and 2) contractors who are aren’t really inspectors, but are being asked to assess and estimate costs for a home’s specific issue.  This might include roofers, foundation contractors, plumbers, electricians, HVAC, chimney repair companies, etc. 

The first category of inspector is generally unbiased and is just being paid to provide a report.  However, the second category are professionals who are willing to come and look at the home in hopes that they will find some issue they can get paid to repair.  

Some contractors are totally honest and reputable and will give you a completely unbiased assessment… even if it means telling you there is no issue to repair. Unfortunately, there are plenty of guys out there who aren’t fully honest. These unethical contractors will always manage to find something wrong that they can charge you to repair or replace. Thus, it’s crucial that you find the right contractor for the inspection.

At Greatbuildz, a free service that connects homeowners in Los Angeles, Orange County, Ventura & San Diego with honest, reputable general contractors, we regularly speak with clients who aren’t sure how to determine a reputable contractor from a dishonest contractor. Let’s explore this below. 

Don’t Let a Home Inspection Kill Your Deals 2Don’t let a home inspection ruin your deal   |  Credit: consumerreports.org

Be Wary of Contractor ‘Inspectors’

Chimney ‘Inspector’ or Thief!?

I’ve personally encountered many request-for-repair issues where a contractor ‘inspector’ almost killed the entire transaction because of their dishonesty.  One such scenario involved a chimney problem, which comes up regularly for many real estate agents.

In this case, the general inspector found issues with 2 chimneys in a house built in 1986 and recommended further assessment.  The buyer, instead of getting a true chimney inspector, called out a chimney repair company, let’s call them Contractor X.  

Contractor X took a look at the chimneys and concluded that neither of them could be repaired because the parts were no longer being manufactured. Therefore both chimneys had to be fully rebuilt at a cost of over $35,000.

This didn’t seem reasonable to me because the house wasn’t very old, so I decided to call a different, reputable company for a second opinion, who we can call Contractor A (for A+). Contractor A inspected the chimneys and identified only minimal repairs. The total cost for everything to bring both chimneys up to code? Less than $3,000, total!

I shared this with the buyer, but they were still skeptical. How could two companies recommend such different solutions?! Once I showed them several Yelp reviews indicating that Contractor X had previously scammed people in the same way, they started to understand the situation better. Then I showed the buyer what I found about Contractor A – dozens of recent positive yelp reviews, a clean active license for 10+ years, and an active certificate of insurance. Needless to say, it was easy for them to make a hiring decision from there. 

This Estimate Was a Real SHOCKER

I had another situation where the buyer called a large electrical contractor (the kind that advertises on radio & tv) to check out the home’s electrical system.  After taking a look around the house, they gave an estimate of nearly $30,000. This contractor tried to convince the buyer that in order to bring this property up to code, they would have to replace portions of the wiring and replace the main panel. 

Fortunately, I knew a few things about electrical systems (my father was an electrician) – a main panel replacement is a quick and ‘easy’ job for an electrician. Depending on the size and complexity, they will typically run $3k-$10k.  Again, a second opinion showed that the panel was operating just fine and some simple repairs would be totally sufficient.

Don’t Flush Your Deal Away

Another common scenario I came across all the time involved the sewer lateral lines from the house to the street.  A plumber will generally run a camera through the sewer line to inspect for any issues, be it a crack/break in the line from some shifting or some tree roots invading the pipe.

Regardless of the issue, some plumbers will tell you the only solution is to replace the entire sewer line, which is an expensive repair, especially if its located under a concrete driveway. A more reputable plumber can often propose a much more cost-effective solution like inserting a new pipe ‘liner’ or replacing just a small portion of the line.

The ‘Foundation’ of a Good Contractor

Foundations are often a big concern for buyers because they’ve heard it’s such an important and expensive component of the home. Parts of Los Angeles and California have expansive or ‘swelling’ soils. This causes soil settlement below the house, which leads to drywall cracks and sloped floors.

This can obviously scare off buyers because they assume it indicates major foundation problems. Of course, foundations are to be taken seriously, especially for hillside homes and should be inspected carefully.  Yet again, the prognosis for any house will really depend on the contractor inspecting the home.

In many cases, drywall cracking from home settlement over many years (especially in homes in the flats) is quite common and doesn’t necessarily indicate a foundation issue.  An honest contractor might just recommend some drainage improvements (and gutters) to keep rainwater from running toward the foundation. Other contractors may recommend drastic foundation repairs & improvements, just to get themselves another profitable job.  

Most homeowners aren’t aware that the ‘slab’ (the interior concrete floor) is not the same as the foundation (the deeper concrete underneath the exterior and load-bearing walls).  Because the slab isn’t a component of the structural integrity of the home, small cracks in the slab are usually not an indication of major issues. These small cracks can often be resolved with a reasonably inexpensive, cosmetic repair.

5 Tips For Your Home Inspection

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Realtors deal with these kinds of home inspection issues all the time, so it’s a good idea to be prepared with some common sense solutions when problems arise.  Here are some ideas that I’ve used successfully in the past for my transactions:

  1. Be aware of all inspections and home inspectors that the buyer’s agent is planning for the house. 
  2. If the buyer’s agent plans to bring contractors to ‘inspect’ certain components of the house, make them aware that you will always be getting a second opinion from your own experts.
  3. If the general inspector suggests a further analysis of a certain component of the house, give the buyer’s agent the contact info for your own professionals (electrician, plumber, etc) and strongly suggest they call your contact instead of someone they find online.
  4. If the buyer’s agent doesn’t want to use your recommendation and feels more comfortable using their own contractor, ask them for the contractor’s information in advance.  Check Google/Yelp/Houzz reviews to make sure they seem reputable and not over-priced. 
  5. Compile a list of your trusted contractors. Ideally, you’ll need to know a reputable plumber, electrician, HVAC, chimney, and foundation/drainage company. It would also help to have a pool company and a roofer. If you don’t have a trusted network of contractors, ask other realtors for referrals until you’ve built out your list. 

 

I hope some of these ideas prove helpful in your future transactions.   When it comes to finding a reputable general contractor for your client’s major remodels – GreatBuildz is simplifying the contractor search.

GreatBuildz is a free service that connects homeowners in Los Angeles, Orange County, Ventura & San Diego with reliable, thoroughly screened general contractors and provides project support from start to finish. Call now (818.317.3567) to chat with a real person about your next renovation project or visit our website for more information: www.greatbuildz.com 

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