Buying a house as is with inspection

An issue that frequently arises early on in real estate transactions is when the seller wants to sell their home “as is” and the buyer wants to have a home inspection.  More often than not these seemingly adverse positions can lead to the contract needlessly falling apart. Having been on both sides of this conundrum I am here to tell you that the home can be sold “as is” by the seller and the buyer can have a home inspection too.

Generally, a home inspection is always a good idea for prospective buyers. When home buyers are not permitted to get a home inspection more often than not the deal will fall through because the buyer wants to know what he/she/they are spending their life savings on. Also, buy not allowing the buyer(s) to get an inspection, it makes it appear as though the seller has something to hide.

Just because a home inspection shows some problems with the house does not mean that prospective buyers will back out of the deal. They can then weigh their options and their finances against how much they want to buy that specific house.

The “as is” part of the deal comes into play because the seller does not need to remedy the problems or give the buyer(s) any credits or reduction in purchase price because a home inspection comes back as unsatisfactory.

Ultimately, a revealing home inspection may help the seller in the long term for two reasons.  First, if a major problem is shown to exist, the seller may need to adjust the asking price to take into account the defect.  Second, the seller may be able to save hundreds of dollars in inspection costs if they are able to obtain a copy of the buyer’s inspection report.

Home inspections, which are meant to keep potential homebuyers safe, involve a professional inspector looking at the physical structure of the home and much more to see if there are any defects that need to be addressed, replaced or fixed.

It is an important part of the journey that leads to the closing of a house.

What a Home Inspection Should Include

• Foundation and basement
• Any additional structural components
• Interior plumbing systems
• Interior electrical systems
• Heating and cooling systems
• Condition of windows, doors, and door frames
• Condition of floors, walls, ceilings, stairs
• The attic and any visible insulation
• Major appliances
• Trees around the property (if applicable)
• Examination of the exterior of the building/house

A home inspection is paramount for a buyer because they should also know what they are purchasing. While an inspection cannot reveal 100% of all the issues, it can give the buyer a pretty good picture of the state of the home, as well as some negotiating power.

It's important to get your prospective home inspected before you sign the contract and at the latest before you close.

Make sure you do your homework when it comes to home inspectors. Asking the right questions and comparing prices will ensure that you are hiring the right people.

Home inspections generally do not include thorough testing for mold, radon, asbestos, lead, pests, fireplaces, and pitched roofs.

Inspections are not standard at co-op buildings but are for condominiums and houses.

The home inspection is paid by the buyer and can cost anywhere from $200 to over $1,000, depending on where the property is, the size, and the type of property.

What is a Home Inspection?

A home inspection is a visual examination of a structure such as a house, a townhouse, a condo, or a co-op.

The inspector evaluates the home and can give you an accurate report on the conditions of the doors and windows and the plumbing system, for example.

A home pre-buying inspection can potentially find existing defects in the home.

The inspector, who goes through the interior and exterior of the house, may bring you back a report listing any broken, defected, or hazardous issues with the house and the area surrounding the house.

Is a Home Inspection Absolutely Necessary?

The simple answer is no. There is no law that requires a buyer or a seller to conduct an inspection when purchasing or selling any home.

However, whether you are buying an apartment, a single-family home, a townhouse, or even a new development it's always a great idea to have an inspection prior to purchase.

A home inspection will give you a good picture of what you are walking into when you buy and move into your new home.

It's essential to take into account all the potential or hidden costs of repairing, renovating, or replacing any major or minor structure, plumbing, electricals, appliance, fixture, etc.

It might even give you some negotiating power when you finalize your sales contract in regard to the price or any concessions.

When Does the Home Inspection Take Place?

In a home sale, the seller's inspection should take place before the sale (pre-sale inspection).

The buyer's inspection should happen after they make an offer to a seller and the seller accepts the terms, but before the sales contract is signed and earnest money transferred.

Some elect to have the inspection done after signing the contract but this can stretch outthe in-contract period longer because further negotiations may become drawn out.

This may also mean that the contract must be redrafted and signed again.

Therefore, it's recommended for the inspection to be done before the contracts are signed so all major negotiations can happen prior to going into contract.

If the seller has agreed to repair or renovate a part or parts of the property before closing, another inspection should take place.

The Buyer’s Inspection

A buyer’s inspection happens after he or she has made an offer on the home, and before closing the sale.

What if your inspection turns up with termite damage or an old plumbing system or a myriad of damages that needs immediate fixing?

If the seller refuses to pay for the damages, or if the seller won’t deduct the cost of the damages from the sale price, or if the seller won’t negotiate, always remember that the buyer can back out of the deal but only if your contract is written to allow you to do so.

The Seller’s Inspection

A seller’s home inspection, meanwhile, occurs before the home is listed. Sellers get their inspection as they begin to prepare their house for sale.

If the inspection shows up with repairs needed for expensive appliances, such as old or busted washer machines, dryers or refrigerators, the sellers can get these items repaired.

Buying large appliances can save the sellers thousands of dollars and will be much cheaper in cost in comparison to a buyer asking the seller to purchase the appliances.

Fixing any potential issues way before putting the house on the market can save time in the closing process and eliminate any negotiations about the state of the seller’s home.

In addition, the pre-inspection for sellers allows them and their brokers to address problems on a more doable schedule instead of being under pressure from buyers who may be requiring that any work that needs fixing is completed before the closing.

The final report of the inspection is a powerful tool that may be able to sway potential buyers.

And sellers should always keep the receipts for proof of service on malfunctions and repairs.

How Much Does the Home Inspection Cost?

On average, a home inspection should cost anywhere from $200-$700. However, in pricey metropolitan areas like New York, it might cost you as much as $1,000 or more.

How Long Does a Home Inspection Take?

For an “average” sized home, a pre-inspection can take a few hours, depending on the type of home its age (such as a coveted pre-war classic seven) and its size.

The homeowner’s report takes about three to four days to complete.

You don’t want to rush during this stage because the trained inspector is looking for safety issues that will ultimately benefit you.

According to the American Society of Home Inspectors, inspectors “ look for things that are significantly deficient, unsafe, near the end of the service life, or not functioning properly.”

Do I Need to Be at the Home Inspection?

There’s no reason not to accompany the inspector as he or she makes his way through the home.

If you have questions related to the examination, you can get answers right on the spot.

You can learn how to maintain and preserve the house, such as knowing where to find the location of the electrical box or when or not to use the built-in humidifier in the house, and how to set it up automatically.

In addition, you can learn about the problems in a house that are serious and problems that are relatively minor or cosmetic.

Do-It-Yourself

Potential buyers, especially those who will do anything to purchase their dream house, will even inspect the property on their own in addition to hiring the pre-buying inspector.

And there are ways to do it.

Those wood floors look great, but on a second look, they are sloping.

You may come up with some water damage on the ceiling of your apartment, perhaps because the floor above you drew water from a bath without putting a stop to it.

The dryer may look fine, but does it actually work?

Call us crazy, but we recommend bringing your laundry that’s already washed and is now wet and stuff it into the seller’s dryer.

Be Wary of Sellers

If the seller informs the buyer that their own home inspection is not needed, this raises a red flag.

Sellers have their own interests at stake and may, for example, cut corners in the inspection phase by hiring someone who’s not known to disclose all problems.

Some sellers don’t even disclose any home problems out of dishonesty while others may not know about the problems.

And then there are sellers who don’t want buyers to know about a particular physical condition that needs to be fixed because they don’t want to shell out for the money to correct the problem.

That’s why you should always engage in a pre-buying home inspection.

Many things can happen at this stage.

The seller may pay for the cost or lower the asking price and the buyer may want to negotiate with the seller to offset the cost.

In any of these situations, the deal can fall apart, which is a loss for both the buyer and the seller.

How to Find a Home Inspector

You want an inspector who is both thorough and tough.

Your best bet is to ask around to friends and family. However, your broker or agent would also have a few names you could check out.

These professionals will be able to give you a few names or services because it is part of their business to be informed about the real estate landscape.

Then again, if you turn to your broker, just remember that the broker has a financial interest in your deal going through and may recommend a home inspector who might graze over potentially serious issues.

However, be aware that this is a highly unethical practice, although not unheard of.

How to Hire a Home Inspector

Firstly, your inspector should be licensed, so that should be among your first questions along with price and scheduling availability.

It would also be important to know how many years they have been working as a home inspector, or how long the company or service has been in operation.

An experienced inspector will be more knowledgeable as well as have more insights into what the potential issues may be in a home.

Be sure to ask for a sample copy of an inspection report so you know exactly what they'll be checking and how thorough their reporting is.

You should also ascertain that the inspector can service homes in the area you are requesting as some services limit the areas they are willing to travel to.

Lastly, call a few different vendors and compare services, experience as well as pricing, making sure you find out any info about them online, including customer reviews.

What Home Inspectors Look For

Every co-op and condo is different, so the report that the inspector hands over to you will show deficiencies that another report doesn’t show.

But according to the American Society of Home Inspectors (ASHI), there is a consensus on what the inspector is hired to check. These include:

• Foundation and basement
• Any additional structural components
• Interior plumbing systems
• Interior electrical systems
• Heating and cooling systems
• Condition of windows, doors, and door frames
• Condition of floors, walls, ceilings, stairs
• The attic and any visible insulation
• Major appliances
• Trees around the property (if applicable)
• Examination of the exterior of the building/house

Cosmetic repairs in the home are of no concern with the home inspector unless they pose a safety issue. An inspector will report the large water stain on a wall, but they won’t report the peeling wallpaper.

What Doesn't a Home Inspection Include?

While a home inspection can tell you a lot about the house you're interested in, it doesn't give you the full picture.

Some of the following items may be standard in areas outside the cities, but not offered universally, and some of them may be examined only superficially or not at all.

Water Safety

In rural or suburban area, it's not unusual for the inspector to take water samples and send them to the lab to test for harmful microbes, toxic metals, high mineral content (softness/hardness), and pH.

This is because all the water running in residences in urban areas comes from municipal water systems and not any independent water sources or private wells.

Normally any water that is from a municipal water system or a public well is not tested.

What an inspector might do in your apartment is to check the water pressure as well as the temperature to make sure the water heater is working properly.

Radon

Another exception is testing for radon.

Radon is a naturally-occurring carcinogenic gas emanating from radioactive materials like uranium from within the earth.

Despite a high risk in many states, radon testing is not a requirement for buying or selling a home anywhere.

However, if you know the property you're interested in is in a low-risk area, radon testing would not be necessary.

Roofs

A roof inspection may or may not be included depending on the type of structure.

Most home inspection services do not closely inspect pitched roofs.

A single or two-family home that's in the form of a townhouse, may include a roof inspection as they are flat, not difficult to access, and generally, can be walked on safely.

(Note: if a roof looks unstable, an inspector will not put themselves in peril to examine it.)

A pitched roof is a different matter, as you'd need a ladder and/or safety harnesses before properly inspecting such a roof.

It also puts the inspector at risk for bodily harm and so, is not included.

What they can include is just an observation of any issues they can spot from the ground, such as apparent damage or missing shingles.

If you want your roof thoroughly inspected, you will need to hire roof specialists.

Chimneys/Fireplaces

Inspectors can and will inspect chimneys on a basic level.

They can shine a flashlight up the chimney to make sure there is no obstruction and that the damper switches are working.

However, that's about it.

You'll want a fireplace/chimney specialist to come and do a thorough inspection of both because there is a lot more to it that can cause a very dangerous situation in your home.

Furthermore, if you plan on your using your fireplace, you'll need someone to inspect and clean your fireplace/chimney once a year.

Mold

Another specialist is required to test for mold.

Your inspector will have a good idea as to whether you should get your prospective home tested for mold, such as if they spot water damage, notice very moist areas of the house, or lack of proper waterproofing in key areas like the bathroom and kitchen.

It is highly recommended that you have your home tested for mold if your inspector suspects it. Mold can cause a myriad of health issues for you and your family members.

Asbestos/Lead

Asbestos and lead were once very popular materials used in insulation, paint, and a variety of other building materials before the adverse health effects were known.

If you are purchasing a unit or home that was built before the 1980s, chances are that there may be asbestos or lead-containing materials in your home.

Your inspector is not equipped to test for these and the home should be tested especially if you noticed crumbling materials like paint or floor tiles.

Pests

You may also need a pest inspector.

If your home inspector is not licensed to deal with pests, you should hire a separate pest inspector.

It will be in your best interest when the pest inspector comes up with infestation, dry rot, and/or other fungal existences.

The pest inspector is looking for wood-boring insects such as termites and flying beetles.

You'd do best to hire one especially if the home inspector tells you they see signs of pests, such as droppings.

What to Expect From an Inspection Report

The inspector’s job is to provide you with a detailed home inspection report. The report will be sent directly to you, most likely by email.

The report will show any defects and include pictures of them.

A good report will clearly highlight potential hazards, damages, or issues so you can see where the problem areas are.

This is the point where you can scrupulously view the report and, if you don’t understand some of the languages, you can readily ask the inspector on anything you want.

It’s a good idea to read the report back to back before you start to negotiate.

Your real estate attorney should also have a good understanding of the contents of the report as it's their job to help you negotiate your sales contract.

You’ll have more buying power with the findings in your hand.

The Types of Homes and How to Inspect Them

Every home really is different. Condos, co-op, townhouses, and single-family homes all have different bylaws that they must adhere to.

But homes in New York, in some cases, are also similar in regards to what an inspector surveys.

Let’s take a look at all the different units to better understand what they need.

Home Inspections on Co-ops

You don’t need to get a home inspection on a co-op apartment.

Your agent will tell you that it’s non-standard.

An inspection may only pick up what you yourself see just by looking at all the rooms in a co-op.

In fact, a close inspection by the buyer of the appliances, fixtures, flooring, windows, and doors may be enough.

Reasons Home Inspections are Not Standard in Co-ops

The building of the co-op—mostly the common areas and the elevator-- will usually be maintained, as you are paying a fee to the apartment’s management company and there’s usually a live-in super available.

And besides, visible damages such as leaks coming from outside your unit are the co-op’s responsibility.

In most cases, maintaining the building is the responsibility of the corporation and all shareholders.

Then again, the co-op building will clearly state that the shareholder is responsible for the repair of windows or the air conditioner unit, for instance.

However, if you do decide to hire an inspector, a major issue that often happens is that the building won’t permit the inspector to view and study the building’s systems such as the roof or boiler room.

These are responsibilities of the building’s maintenance and many co-ops exist in tip-top shape.

Reviewing the board meeting minutes and annual financial statements will help you and your attorney assess the state of the corporation's finances as well as the state of the building itself.

Home Inspections for Condos

Condos are a different breed.

The inspection process, while typical, is different from a co-op.

In a co-op, if a heating unit or plumbing are faulty, the co-op is responsible for getting them fixed.

In a condominium, if the same types of things are damaged or not functioning, it's up to the condo owner to get those repaired.

What an Inspector Looks at in a Condo

The inspector will look at the electrical system, the HVAC, and the plumbing, as well as the working order of windows and doors and other necessary areas or appliances.

Here, the inspector will ask the potential buyer to contact the condo association for records of the overall structure of the unit rather than examining the structures themselves.

That’s because common areas of the condo unit are usually not available during the inspection.

A thorough inspection will shed light on the working order of all of the interior systems of the unit and your detailed report will help you guestimate how much your maintenance will be once you close.

Your inspector may even bring to light problem areas or issues and, if that’s the case, you can certainly go back to the bargaining table to renegotiate the seller’s purchase price before you legally buy the unit.

Unlike co-ops, prospective condo buyers and their inspectors must have access to a technical audit of the building, which will help you see the actual condition of the building.

The inspector will also need the most recent status certificate to establish the overall condition of the condo building.

Information You Need From the Condo Association

It’s also essential for you to get your hands on, and read, the minutes of the condominium corporation meetings for the last few years.

The minutes will reveal to you signs of maintenance problems and exterior problems.

If you think that’s going too far, always remember that once you own the condo, you will be responsible for any repairs you come across as an owner.

That’s why you should also ask the condo corporation for proof of all major structural repairs, proof that these repairs were completed, and what fees were paid to fix the problem areas.

Above all, have your inspector find out if there are enough funds in the condominium building that can be used for immediate issues, as well as for any future repairs without you being pinned to a new assessment.

Home Inspections for Townhouses Vs. Single-Family Houses

Home inspections for townhouses and houses overlap, and one major reason to hire the inspector is to examine the roof of your potential house.

If your inspector sees caulking on the shingles, this is a tell-tale sign that the roof has undergone a quick fix patching, and not in the right manner.

Just like a single-family house, it’s imperative for a townhouse owner to hire a home inspector prior to purchase.

The townhouse inspection can turn up some expenses that look fair now but will decay in the foreseeable future and be a liability.

The single-family home and the townhouse are also similar in another way.

If you are quoted a cost for a townhouse inspection, the inspector will always quote the inspection fee exactly as the agent would for a single-family home.

That’s because the townhouse takes the same amount of work and time to inspect as a single-family house.

If a single home is considered the same as a townhouse, then the latter should be inspected in the same way as the house, with access to the outdoor structure of the house.

Even New Homes Need Inspections

A home inspection may feel like a waste of your money if you are buying in new construction.

You assume that since it was just constructed, or if that it has been constructed within the last five years, there will not be any problems.

But despite the age of the home, there may be defects that you hadn’t foreseen.

New doesn’t mean skip the inspection. Issues during the construction may have not been addressed.

You’d be surprised by what comes up when investigating a brand-new condo.

Most developers are on the up and up and strive to deliver quality buildings, but some are not.

It's also common practice for developers to outfit their condos or homes with swanky looking fixtures and appliances that are actually cheap.

Developers can also often forego using a real architect or interior designer and make quirky choices when it comes to actual construction, design, or materials.

Power to Negotiate

Having a home inspected before you purchase the home is important, we know, but it also gives you the advantage to negotiate a lower price.

So if you are slightly out of reach on a home you want to purchase, remember that the home inspection report allows you the option of bargaining if the report shows some deficiencies.

And of course, you can add to your purchase contract language that enables you to back out of the agreement if you are not satisfied with the negotiation or if your inspection results in too many problems.

Who Pays for the Home Inspection?

The buyer pays for the home inspection.

First-time buyers usually don’t understand that they alone are responsible for the home inspections and that the seller is under no obligation to pay or conduct one themselves.

It is their duty to hire the inspector, make sure the inspections are finished in a timely manner and, of course, shoulder the cost.

After the Inspections Are Completed

You’re this close to purchasing your dream home!

Once you receive the inspection reports and find that there are no major deficiencies and problems with the apartment, this is when you can proceed with the purchase.

If done correctly, your new townhouse or condo will be move-in ready and you can rest assured that there are no water damages and that the HVAC is working as it should.