Lake Geneva Home Inspections

Lake Geneva Home Inspections

Lake Geneva Home Inspections

I feel as though I’ve been writing more admonitions than entertainment lately. It must be the time of year; the swelling of interest and enthusiasm in the housing markets has me seeing things that I really don’t like.  I don’t like sellers who are pricing their homes as though they’ve uncovered a patch of ground with air rights adjacent Central Park, and I don’t like the general attitude that I’m seeing in the market. While buyers are making mistakes aplenty, it’s the sellers who are working overtime to make a mess of the market.

That brings us to the home inspection contingency as written into a standard Wisconsin Offer to Purchase.  I’ll add here that I’m not an attorney, not even close, so if you’d like legal advice please consult your attorney. Even though I’m not a lawyer, I do understand a few basic conditions of the offer to purchase. This is good, since I’m a Realtor, and I’m supposed to understand what it is that I’m asking you to sign. The inspection contingency, as written into most offers, is a contingency designed to allow a contracted buyer time to look over the house they’re buying, just to make sure there aren’t any skeletons, figurative or literal, hiding in any closets.

The inspection is well intentioned, and it’s necessary, and I’m glad that there are home inspectors to shine flashlights into crawl spaces and jiggle the handles on toilets. Some home inspections do turn up serious conditions- like a moldy attic (I’ve seen one in 21 years at this desk), or a moldy bit in the back corner of a carpeted basement. These are things that are not obvious and they are important to uncover. But the inspection contingency has become something different, something worse. The inspection contingency has become a license to concoct a wish-list.

That stove, it’s 8 years old. Did you know the average life of a stove in these United States is only 8 or 9 years? Neither did I, except that some inspectors will make notes of that on an inspection report and the notes cause a buyer to seek a credit for a stove that is, quite obviously, nearly dead. Or is it? If the stove works, is it worthy of replacement? Or a furnace that is 11 years old, and looks shiny and new. Whoops, don’t get ahead of yourself, that furnace is designed to only last 12-13 years, so a new furnace purchase is something the buyer must budget for. Or is it? The buyer finds a list of aging or dated appliances and mechanicals and combines that with a list of outlets that need $17 GFI’s installed, a drip leak under a bathroom vanity, three lightbulbs missing from the attic (possible sabotage by the seller??), and throws a wish list at their agent, and into the lap of the seller. I want a new furnace, a new stove, and all those GFI’s replaced. The inspection contingency, engineered to find faults that aren’t so easily noticeable, has become a weapon against a seller, and in turn, has become a weapon against the deal itself.

Sellers everywhere are cheering now, happy that someone has finally pointed out the flaw in the way this contingency is being used. But there’s admonition here for both buyer and seller. If you’re a seller, and a buyer sends you a ridiculous inspection repair list, it will likely contain some actual defects. The furnace has a cracked heat exchanger, and it’s leaking carbon monoxide. This explains those long naps you’ve been taking, and it’s also an issue. A seller would be wise to repair this for a buyer. In the same way, a stove that is 11 years old and has therefore outlived its usefulness according to Mr. Serious Building Inspector Guy, this is not a condition worthy of a credit. The key to any successful inspection and subsequent negotiation is to be reasonable. That’s it. Reason. Is that so difficult?

Buyers are taking advantage of inspections, and sellers are being unecessarily disagreeable. Both reactions are caused by the market. Buyers are feeling like they may be paying a premium of some sort, and so they’re looking for credits to offset their purchase price. They feel that they gave in on the sales price, so the seller should give back in the inspection. Sellers feel like the market is so hot that they’ve likely undersold their property, and so they dig in their heels on any inspection requests and assume that the buyer will accept the house without repair or credits offered, and if the buyer doesn’t, who cares!? The market is so hot they’ll just line up another buyer, likely for more money. This is the error being made every day in every healthy market across America.

Buyers, stop being so ridiculous. The purchase decision makes sense if the market value makes sense, and if the property you’re purchasing suits your needs. A $3000 furnace replacement doesn’t change the fundamental nature of the value. In the same way, sellers should stop being so absurd. You have a contract to sell your home for $2MM. The buyer wants a $5000 credit to cover all the stuff you’ve been hoping would just fix themselves.  You should play ball, stop being so stubborn, because the risk of losing a buyer is far greater than some potential reward of finding another one somewhere down the road.

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