Smart buyers look for dirty laundry

During a recent seminar for new home buyers, a real estate agent friend of mine introduced me by asking the class a simple question: “What’s the purpose of a home inspection?” Her answer was simple: “A home inspection’s purpose is to inform the prospective buyers whether they should purchase the property or walk away.”

That’s not an unusual take among real estate brokers, but it’s a simplistic view of what the home inspector does, as I think the following anecdote will show.

Recently, I accompanied a new inspector from our office as he completed an inaugural inspection. The property sounded great in the advertisement. The 80-year-old building was “gut rehabbed, with all new stainless steel appliances and marble baths.” Because the clients were a little intimidated as first time buyers, Tim and Elyssia brought her father, Paul, a licensed engineer active in the construction field, along on the inspection.

As my new home inspector proceeded around the property into the rear yard area, he realized that the contractor had taken many shortcuts. The 10-year-old porch serviced 13 condominiums. The contractor was attaching pieces of scrap lumber to sections of the porch for purely cosmetic purposes, while ignoring loose handrails, inconsistent stair heights and poorly joined framing.

Around the corner from the porch was the basement entry, which led to what at first appeared to be a cesspool. Our entry to the basement area was restricted due to the three inches of waste covering the basement floor. The odor overwhelmed us as we entered.

Despite the darkness, our bright flashlights were able to locate clothing, rotten food and garbage suspended in the sewage.

Tim and Elyssia tried not to appear shocked but soon covered their faces and ran from the basement. When the inspector spoke to them outside, they stated that the experience “grossed them out,” but they felt that they had an obligation to find such “dirty laundry” before making up their mind.

The inside of the condominium looked great, and our inspection unearthed no big causes for concern inside.

The inspector then led us to the roof, which was about 10 years old and in very poor shape. Since Tim and Elyssia were buying the third floor condominium, they had heightened concerns about the roof, which would be directly over their unit. The inspector’s thorough analysis of the roof unearthed multiple gaps and holes the contractor had created during the rehab process. These problems needed immediate repair.

Elyssia did not come to the roof with us, but Tim seemed pleased to find the roofing problems. His response might seem odd, but it’s one I often see with my clients. When I questioned him about it, he again said that he needed to see the building’s “dirty laundry,” all of it, before he could make an informed decision.

The poor quality of the roof repair revealed itself through a ceiling leak in the bathroom. Again, Tim smiled and acted relieved when we discovered evidence of the recent leak. A follow-up conversation with Tim shed more light on his relief, which had to do both his education as a first-time buyer and the thought that he might have missed major problems until after he’d moved in.

“When we signed the contract, we didn’t realize as first-time buyers, that the structure, basement, in-the-wall plumbing and roof were actually part of what we were purchasing,” Tim said. “The real estate company showed us the nice unit and entry hall, and then they encouraged us to sign the real estate purchase contract, which we did.”

After talking to her dad, who had taken a home inspection training program, Elyssia realized how important it was to get into the building during the home inspection and check every nook and cranny for problems. “Dad told us we were not just buying the unit but also the common areas,” she said.

Currently, Tim and Elyssia are negotiating with the developer. They expect the roof to be replaced, new plumbing for their unit to be completed and the building’s plumbing to be replaced to the street. Their ability to see the building’s “dirty laundry,” including the roof and plumbing systems, put them in a position to buy or walk away from the condominium unit, as my real estate agent friend indicated, but it did more than that. As fully informed buyers with a thorough inspection, the couple was able to negotiate with the builder and make a decision based on his response and follow-through.

Some buyers will use a home inspector’s report as a reason to proceed or to walk away from a purchase. Others, when they realize the nature and severity of the problems, will use the report to get repairs made before closing. In this case, the home inspector could not itemize budgets for repairs because the building was a work in progress. But inspectors typically will include a budget for repairs, further empowering buyers. And that, ultimately, is the real purpose of a home inspection.

Thomas Corbett is president of Tomacor, Inc. a professional property consulting company specializing in commercial and residential property inspections and expert witness work.