When a home buyer asks a seller to make repairs to a property after a home inspection, how do the repairs get verified? Do they get verified? Do they need to be verified? I recently blogged about a hack chimney repair that I found at a re-inspection, which raises the question - are re-inspections necessary?
I sent out an email to several real estate agents that I respect and have had recent communication with, to ask about their take on the importance of re-inspections. Not surprisingly, their answers were all very similar. I've compiled the most common statements below.
Try to avoid asking the seller to make repairs. If the seller is going to make repairs, they're probably going to do the least amount of work possible, use the least amount of money possible, and the repairs will often be sub-par or just plain unacceptable. It's often better to ask the sellers to fund repairs, or ask for the price of the home to be adjusted accordingly. The downside to adjusting the price of the home, however, is that the buyers will need to come up with cash to make repairs.
When requesting repairs, make sure everyone understands the issue(s). An excellent home inspection report will usually be enough to make everything clear and understandable. If there is any confusion, ask the home inspector for clarification.
A common problem with a repair request is to ask for the wrong thing to be fixed, or to specify an improper repair. For instance, if a furnace has a cracked heat exchanger, it would be just plain silly to ask for the crack to be repaired. The furnace needs to be replaced.
One of the more hilarious misunderstandings happened when the buyer asked the seller to address the plumbing vent flashings, which had rubber boots that had dried out and split (see photo at right). The seller told the buyer that they fixed the dried out boots by applying a lubricant. No joke. I can't make this stuff up.
When requesting repairs, request building permits. Not only does this force the seller to 'follow the rules', but it should make the buyer feel better knowing that the work was inspected by an authority, and it puts the cost of the re-inspection on to the seller's lap.
When requesting repairs, be specific. If the purchase agreement addendum is poorly written or isn't specific, the repairs won't be completed properly... if at all. A vague, poorly written addendum might say
Have the leaking laundry sink repaired.
What are the odds that someone will complete this repair with a tube of caulk? A well written addendum may specify the problem, how the repairs should be completed, who should complete the work, and how the repairs will be verified.
The concrete sink in the laundry room is cracked and leaks profusely when filled with water, creating unsanitary conditions. Have the leaking laundry sink replaced by a Minneapolis licensed plumber, and an appropriate plumbing permit obtained and approved by the Minneapolis plumbing inspector. The seller shall have the corrections completed, inspected, and approved no later than one week prior to the date of closing. Documentation of the repairs, including any applicable receipts, permits, and lien waivers shall be provided to the buyer no later than one week prior to closing.
In this second example there was very little left to interpretation. In some cases, however, the exact method of repair doesn't need to be specified. For instance, if there are several defects inside an electric panel, it's probably good enough to specify the defects, request repairs, and request an electric permit. Leave it up to the electrician to decide how to best repair the defects.
When all of the above happens, a re-inspection by the original inspector probably isn't necessary, but it may still be worthwhile. Just as we find countless defects on new construction inspections, improper repairs frequently happen with real estate transactions, no matter who does the work. When there is any doubt in the buyer's mind as to the quality of the work being done, it may be worthwhile to have a re-inspection performed.
My two cents: I don't do many re-inspections, mostly because of all the items stated above. When I do get hired to re-inspect a property, I base my price on how much time I think the re-inspection is going to take. If the seller is a property flipper who was given a list of twenty things to repair, I know from experience that maybe half of the repairs will be completed properly, and the other half either won't be done or will be done incorrectly. I charge the most for these types of transactions, because they become a contentious pain in the butt.
On the other hand, if I'm going out to look at three specific repairs and the buyer or the buyer's agent has provided me with receipts from licensed contractors, I won't charge nearly as much because the repairs will probably be fine. Those are a breeze.
The bottom line: Re-inspections never hurt. If repairs are being done by licensed contractors, the repair requests are specific, and appropriate permits are pulled, re-inspections probably aren't necessary. If the repairs are being done by the seller, I strongly recommend a re-inspection. I have yet to do a single re-inspection where it was the seller who completed the repairs, and everything was done properly.