A Seller s Guide to the Home Inspection By

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1 A Seller s Guide to the Home Inspection By

2 13277 N. Illinois Street, Suite 120 Carmel, IN Indianapolis/Carmel - (317) Toll Free - (800) Lafayette (765) Fax (317) Visit us on the web at: 3/5/10 by Phillip B. Thornberry. All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transcribed, in any form or by any means, without the prior written permission of the author.

3 INDEX I. Key Players II. What Is A Home Inspection? III. What You, the Seller, Can Do IV. Things You, the Seller, Should Not Do V. What May Be Covered by The Home Inspection VI. What Should Be Expected From The Home Inspector VII. After The Home Inspection VIII. Re-Inspections IX. After the Closing X. Is A Pre-Sale Inspection A Good Idea? XI. Summation

4 Introduction It used to be that you could sell your house on a handshake, trade homes with your neighbor or better yet, pass the home down through the generations. Those were the good old days. In fact, most of us can t even remember or even fathom that as a reality. But it was. Today, we know that the process of buying and selling real estate should be left up to the professionals. Transferring or acquiring real estate is so complex; it should not be done without the education and knowledge of professionals in the industry. This booklet is designed to address the home inspection process, as it relates to you, the Seller. It focuses on time lines, what happens and when, what to expect from the professionals, and how to make the most of the information you obtain. We hope that you find this booklet informative and helpful as you embark on the road of your real estate sale. We welcome any comments and sincerely wish you the best in selling your property. ~ Phil Thornberry President

5 Key Players I. The key players in a real estate transaction are the Buyer, Seller, the Investor, REALTOR, Appraiser, Mortgage Lender, Title Company, Home Inspector, and Home Warranty Provider. Below are definitions to help you understand their part in a real estate transaction. 1. Buyer A person who is in the market and ready to purchase real estate. 2. Seller A person who currently owns property and has made it known they are ready to sell. 3. REALTOR - A real estate agent who is a member of the National Association of REALTORS (NAR). 4. Appraiser An independent person trained to provide an unbiased estimate of property value. 5. Mortgage Company The lender in a mortgage loan transaction. 6. Mortgage Broker An agent of a lender who brings the lender and borrower together. 7. Title Company - A company that specializes in examining and insuring titles to real estate. 8. Home Inspector - An independent, state licensed person trained to evaluate the structural and mechanical components of a property. 9. Home Warranty Provider A company that provides a policy to the Buyer or Seller as protection against unexpected mechanical breakdowns.

6 What Is A Home Inspection? II. A home inspection is performed typically for the purchasers of a property. Its purpose is to report the general condition of the structural and mechanical components of the home, as well as to check for the presence of termites and radon. A typical home inspection takes between two and three hours to complete (in some cases more depending on the square footage). The Inspector should: v Enter all accessible attics and crawl spaces v Operate appliances, furnace, air conditioner, and water heater v Open windows and doors v Run all plumbing v Inspect all interior spaces v Remove electrical panel cover and check lights and receptacles v Traverse roof where possible The inspection should be performed by a licensed building inspector. Most Inspectors also carry other certification and designations and are members of various professional organizations. Purchasers are encouraged to attend the inspection and are normally present. REALTORS are also present in many cases.

7 What You, the Seller, Can Do III. The following steps can help expedite the inspection process and eliminate the communication gap that occasionally occurs between Sellers and Inspectors. Pets If you have a pet that is not be let out or should be kept in a particular part of the house, leave a note in a place that the Inspector will find or better yet call the Inspector ahead of time. Knowing the pets name is also useful to help put him or her at ease. If a dog is vicious or may bite, please have them in a cage or in some other way confined. Access If possible, clear storage which may hinder access to attics, crawl spaces, and electrical panels. A parked car under the attic access may mean a return trip which is inconvenient for everyone and typically generates a return fee. Bulbs If there are any burned out light bulbs in the house, try to change them prior to the inspection. Radon If a radon test is to be performed, the following EPA Guidelines should be observed, prior to and during the testing. You will be asked to sign a document regarding these guidelines. v Windows are to be closed 12 hours prior to and during the test period. Windows may be closed at the time of the inspection, with a longer test period (96+ hours). v Crawl space vents are to be closed during test period. v Fireplace dampers should be closed (fireplaces and wood burning stoves should not be used). v Exhaust fans (kitchen and baths) should be used only when absolutely necessary. Use of Jenn-Air grills should also be avoided during the testing period. v Doors should be kept closed (except for normal entry and exit). v The test unit(s) must not be touched, moved, or tampered with in any manner during the testing period.

8 Things You, the Seller, Should Not Do IV. The following are examples of things the Seller should not do during the home inspection. This can be distracting to the Home Inspector, breaking his focus. DO NOT make verbal representations about the condition of the home. If possible, be gone when the inspection is being performed. DO NOT negotiate the inspection. If necessary, this will be done at a later date (covered later in this booklet). DO NOT hide defects. This could result in future liability. DO NOT expect to know the results of the inspection immediately. The inspection report is confidential for the purchaser. In most cases, a copy of the report will be made available to you through your REALTOR.

9 What May Be Covered by the Home Inspection V. The structural and mechanical inspection covers the following: (These are by no means complete lists but are designed to give a general understanding of coverage.) Please note that all inspections are visual. v Basement Structure Water penetration, water damage, structural integrity of walls, structural integrity of support system for first floor, window condition, floor condition, finished wall, and ceiling condition. v Crawl Space Structure Water penetration, water damage, ventilation, structural integrity of walls, insect damage, structural integrity of support system for first floor, insulation (location and condition). v Slab Structure Water seepage into ducts (under slab), settlement, and cracks. v Furnace Heat exchanger, burners/elements, blower fan, ducts, air flow, filter, flue pipe, humidifier, and thermostat. v Electrical System Amp rating, volts, breakers, fuses, main panel, subpanel(s), main service wire, branch wire, switches and receptacles, light fixtures, doorbell, and smoke detectors. v Plumbing System Water lines, waste pipes, vent pipes, fixtures and faucets, caulking and grouting, drainage, sump pump, water pressure, water heater, and gas pipes. v Interior Walls, ceilings, floors, steps/stairs, railings, fireplace, doors, and windows. v Attic Structure, roof decking, insulation, water penetration, and ventilation. v Appliances (Not all companies inspect appliances.) Range, oven, exhaust fan, refrigerator, dishwasher, disposal, and trash compactor. v Exterior Walls, soffits and fascia, gutters, roof, flashing, skylights, and chimney(s). v Grounds Walkways/steps, driveway, patio, porch, retaining walls, railings, balconies, and grading and drainage.

10 What Should Be Expected From the Home Inspector VI. If you, as the Seller, have decided to stay at your home during the inspection instead of being gone, as earlier explained in this book, here is what you may expect from the inspector during his process. Upon arrival, the Inspector will briefly go over what he will and will not inspect to you and the Buyer. The Inspector will also ask the Buyer to read and sign a pre-inspection agreement. The agreement will clarify exclusions, limits of liability, etc. Most inspections take between two to three hours to complete on a home that is less than 3000 square feet. The Buyer should feel free to follow the Inspector throughout the house and ask questions. The Inspector may also inform the Buyer of routine maintenance items such as cleaning or changing the furnace filter, humidifier and water heater settings, and location of the main water and gas shut off valves. The Inspector may ask you, the seller, some questions about the home during his inspection. Once the inspection is complete and has been reviewed by the Inspector, a report will be generated which typically includes digital photos. The reports will then be sent to the authorized parties on the pre-inspection agreement signed by the Buyer.

11 After the Home Inspection VII. Negotiating The Inspection: If defects are found during the inspection, you may be asked to repair those items. The following is the normal procedure used through the inspection process (specific deadlines are written in purchase agreement or contract): v Inspection is performed within specified time frame. v Report is delivered to purchaser via , mail, or through agent. v Purchaser (with REALTOR ) decides which (if any) defects he or she requested the Seller to repair. This is put in writing and sent to the Seller, through the listing REALTOR. v Seller responds in writing to purchaser regarding repairs requested. v Repairs are performed. Copies of paid receipts may be given to purchaser and in some instances, a re-inspection may still be requested prior to closing by the original Home Inspector. Clarification Of Defects: If a particular defect is not understood by you, your REALTOR or your contractor, feel free to call the Inspector. In many cases, 2 or 3 minutes on the phone will clarify the situation. Please note that the Inspector knows only what the report said and not what the purchaser has requested you to do. In most cases, there are multiple ways to repair a particular defect. Make sure you are doing what has been agreed upon. Conflicting Opinions: In some cases, a contractor hired to repair a defect will be unable to find the problem or will disagree with the Inspector. In these cases, it is important for the contractor and I nspector to discuss the situation. SECURITY HOME INSPECTIONS, INC. is available to meet contractors when necessary to resolve these situations.

12 Re-Inspections VIII. Do I really need a re-inspection of the home? The Buyer may ask for a re-inspection of the items he or she has asked you to repair. There are several options when looking at repairs: 1. The Buyer could take a cash settlement. This works on items that have clear cut costs with little to no chance of anything else coming up. 2. The Seller makes repairs himself. This typically is not a good idea unless the Seller is licensed in the specific field of the repair. However, quite often, there are repairs that require only minor attention. 3. Utilizing an outside repair company. The Buyer would always like to get a receipt even though the Seller typically pays for the repairs performed. Re-inspections are highly recommended for any and all repairs, regardless of who does the repair. Should the same home Inspector perform the re-inspection? Having the same Inspector is beneficial. The initial Inspector is familiar with the home and has first hand knowledge of any defects that were found. However, sometimes due to scheduling and tight deadlines, the initial Inspector is not available. If this is the case, another Inspector may be scheduled. He should have a copy of the inspection report and may have spoken to the initial Inspector. Prior to the re-inspection, a faxed or ed copy of the Buyer s Response should be sent to the Inspector. After the re-inspection Report with updated information detailing the repairs made will be generated and sent to the same parties as the initial report. While most repairs are satisfactory, there are occasions when the Inspector does not approve a repair. If that is the case, another trip to the property may be needed to meet with the contractor.

13 After the Closing IX. Remember, even a house can change Once the Buyer has moved into the home, will he/she find things that the Inspector did not note? Absolutely. Remember, the home inspection is intended to be an overall, visual, and general condition of the home, and not an exhaustive list of defects. The inspection is not a guarantee of future conditions happening. An inspection is not a warranty. Home warranties It is recommended to protect yourself against future breakdowns of mechanical systems by placing a home warranty on the property. Some warranties will also include roofs, sump pumps, wells, pools, appliances, and more. Each home warranty provider has their own policy and coverages. You should read them carefully. Please also note that many of the home warranties also provide seller coverage during the listing period.

14 Is A Pre-Sale Inspection A Good Idea? X. Having an inspection prior to listing or selling your home can save time, money, and in some cases, the deal itself. Consider these facts: v Most major defects found during inspections were not known to the Sellers. Once these defects are found, a Buyer may not want to buy the house. v You negotiate down to what you consider bottom dollar. An expensive repair makes the transaction difficult at best. v If defects are found prior to sale: o You, not the Buyer, determine the type of repair (there can be a wide variation in cost). o Buyer does not get cold feet because defect has been eliminated and properly repaired. o You don t have to renegotiate your deal or have repairs done under tight time constraints.

15 Summation XII. We hope that we have been able to be of service to you by giving you insight to the process of home inspections. We are here to answer any additional questions you may have or to be of further assistance. Please feel free to call Security Home Inspections anytime, we welcome the opportunity to be a part of your team. Providing continuous, professional service. Every call. Every inspection. Every time.

16 13277 N. Illinois Street, Suite 120 Carmel, IN fax Lafayette:

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