How a home buyer handles a Request for Repair depends on what type of repairs are needed. For example, if the water heater needs to be replaced, a buyer might specify a brand of water heater and ask that it be installed with a permit, if a permit is required. However, if the repair is structural, a buyer may be better off asking for a closing cost credit and hiring his or her own contractor.
The reasoning is sellers will often choose to pay as little as possible to fix a problem when the money is coming out of the seller's own pocket. This means that some sellers will hire the cheapest contractors and select the least expensive materials to do the job.
The problem with the seller completing repairs -- whether it's paying a termite company to issue a pest completion or a handyman / plumber to fix leaking plumbing -- is the buyer has no way of knowing if the work was actually done properly. If extensive pest work was done, I may suggest the buyer obtain a second pest inspection, primarily because the pest company that completed the work issues its own completion. Half the time the second pest company finds more work. If this is discovered during escrow, the first pest company must come back and fix it.
Some home inspectors charge to make a return trip to verify repairs, and some do not. Some inspectors build in a re-inspection fee in their initial inspection. Some Sacramento home inspectors, for example, return at no charge because the re-inspection is easy, the home is in their neighborhood and the home inspector receives many referrals from the agent. Other home inspectors routinely charge for a verification inspection.
I'd like to ask the real estate agents who read my blog whether the home inspectors they use charge for a re-inspection. A home inspector in Michigan who reads my About.com Home Buying Forum seems offended I would disclose that some home inspectors waive a re-inspection fee. I'd appreciate hearing about other agent's experiences. How do you handle re-inspections?
The Short Sale, by Elizabeth Weintraub, coming from publisher Archer Ellison in January 2009.
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Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
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The buyer can have the inspector come back out to reinspect those items, and insure they were properly addressed.
My practice is if it is something that has caused initial concern like electrical, etc then ask the client if they wish the inspector to come out and give blessing of completed work. Let the client decide. I always have my clients do a final walk through acceptance of property regardless of what may have been done for repairs or not. I then have them sign a Walk Through Acceptance form that hopefully makes them realize they need to be comfortable about the property before closing. Good luck to you!
Most companies I work with do have a charge for re-inspect...........I have offered a walk through prior to closing with many of my clients and most just settle for proof that it has been done ......... IE: receipts. I guess it is up to the buyer what they want. However in some cases if the lender will allow it, I will ask for monies for repairs be held in escrow...........that way the buyer takes the responsibility for the work.
Many home inspectors do charge for a re-inspection, and all repairs are requested to be completed by a licensed contractor. Receipts to prove the work was done by a licensed contractor are required.
I think the reinspection should be built in to the price right off the bat.
I'm with Randall. I think the reinspect should be part of the inspector's fee. Raise the fee $75 and half the buyers (and their agents will never suggest) would not use it. I always recommend to my clients that they have the work reinspected. It's money well spent and peace of mind knowing things were done correctly.
The inspectors I work for do not charge for a re-inspect I have established a working relationship with them for my buyers.
We always ask for repairs by a licensed contractor who guarantees the work and provides a receipt. We do not re-inspect very often...
Elizabeth: I've never had an inspector do a re-inspection after items are fixed. Then again, it seems like most of my career has been spent dealing with banks as sellers, so nothing seems to get fixed.
Elizabeth
How could you go wrong?
Tom
I'm also a big fan of buyers getting a credit and getting the repairs done themselves so they know it will be done right. Recently had that occur. The two inspectors I use most one comes back for free and the other charges a travel fee (so the fee depends on his time to get to the property, but it caps at $50.00) Our lake has 417 miles of shoreline so sometimes to and from a property is an hour or so. One of the inspectors thompsonhomeinspections.com actually has it right on his web site that he does "courtesy" re-inspections.
Other times we have had repairs done that come with warranty (like a/c repairs and the like) sometimes buyers settle for the warranty papers instead of reinspection.
So, if I'm counting correctly, two inspectors charge, two build in the price of a re-inspection and two home inspectors do not charge for a re-inspection. Sounds pretty even across the board so far -- it could be any one of those three options. :)
I personally like giving the buyer the credit and letting them do their own repairs. If the lender will give the loan without the repairs being done up front, it's best to let the buyer do their own. You are right in that if the seller is doing them, he's going to "cheap-out" as much as possible then you have the buyer/seller fighting over possibly aesthetics even though the item functions fine.
Interesting split on charge vs no charge. I am surprised there is such a variance.
I typically ask for compensation and have the buyer get the work done. Once I had a contractor called back and they indicated they had no responsibility to the the buyer because the seller had contracted for the work.
Dear Elisabeth.
In our area, some do some don't. Is the buyer looking for a total re-inspection, or just verification that the work was done right?
Answer is, depends!
We have seen it vary - depending on the work done mostly, if it's something major answer has usually be yes, if not some do not charge re-fee. Most buyers request work done by professional and proof with receipts. ~Rita
For me, it depends on the work and the inspector. Most of the inspectors I use will do a reinspect at no charge. However, as you mentioned, I usually encourage a credit be given, whether I am representing a buyer or seller. In either situation, my client is going to be more comfortable to have their own people do the work. The caveat in this is to be certain that enough credit is given so that the work can be done for the amount credited.
This is a very good question, I guess a lot depends on the home inspector and the relationship you have with them. Case by case basis is what I say.
Many inspectors will come back for a reasonable fee. Happy holidays.
Hi Elizabeth - I love inspection questions. I always try to follow a basic strategy when working with buyers and the inspector:
1) I suggest my clients interview several inspectors who have good reputations. They wil do re-inspections for minimal fees (why should they work for free after all?).
2) After the ), we write up the inspection response to include the following language:
" All work orders to be completed by a specific date, by licensed, bonded contractors TO THE BUYER'S FULL SATISFACTION, with invoices and work order documentation given to the buyers 5 days prior to closing AND there is to be a walk-through inspection 3-5 days prior to closing. If the work is not completed as specified, then earnest money is to be returned to the buyers."
3) I never advise my clients to accept credit in lieu of repairs except for small or non-saftey items. Just wait until your cients accept a $1000 credit for an aging furnace repair only to discover, after closing, that the job will actually cost $5000. For big items: roofs, furnaces, AC/HVAC, foundation work, etc., demand the work be done by the seller prior to closing.
4) OF COURSE, MAKE SURE YOU'VE DOCUMENTED YOUR CONVERSATIONS WITH THE BUYERS SHOULD THEY CHOOSE TO DISREGARD YOUR ADVISE............not that this ever happens.
Hi Again!
In response to James' response, if there are more major problems, I would be certain to get a bid or two so there won't be any surprises. In California, there is no such thing as "safety and health" issues in our contract (much to the surprise of many agents who don't really read the contract). In fact, our contract says that the buyer is taking the property in it's present condition. In reality, most of the time there are repairs done by the seller anyway. They are usually items that couldn't be known by a visual tour of the home.
Elizabeth: This is something to think about.. Some times sellers do fast work and should be re-inspected to ensure a workmanship like job has been completed
I dont think it could hurt. I mean you should see it has been done.
Elizabeth - I've yet to have a reinspection performed by a Home Inspector. Most buyers seem content to see receipts for work performed, and verifying on walk-thru that repairs have actually been made. Your idea of having a Home Inspector reinspection, certainly seems like a good idea however. Certainly something to consider. I've also had funds held in escrow or credited to the buyer for estimated work required. And I prefer having buyers select their workmen, when possible.
First, I'm a professional like any other professional. Thus, I charge for my time.
Second, the only thing I have to sell is my time, so I obviously charge for it.
Third, any time I set foot on someone else's property, I take on a certain amount of liability. I charge a fee to accept that liability.
About one third of my Clients have me come back for a re-inspection.
I can't tell you how many times the repairs have not been completed, notwithstanding any contrary claims by the sellers, especially if it's out of sight and out of mind (roof repairs, attic, foundation crawl space).
I also find that damage to the furnace, which is right next to the water heater, was caused when the water heater was replaced.
In college areas, sellers like to take their nice appliances and replace them with older, lower quality appliances. A reinspection reveals that.
If a Realtor doesn't respect me as a professional who charges for his time, then I really don't want to work with that Realtor.
If a Realtor thinks that my fee is too high, well my $499 compared to their $15,000, let them pay my fee. I don't care who pays my fee, but I have bills to pay, too.
I think here all repairs are to be done by a licensed person. But I always make sure and have their license number written on their bill. I haven't had a reinspection done though so I need to think about that.
That was me at 11:47 pm above. It seems that whenever I click on a post in the blog scrolls and make a comment, ActiveRain kicks me out and then posts the comment by someone anonymous. If I go directly to the person's blog and comment, that doesn't occur.
I would like to respond to Russel. Russel, I agree, your time is money. I rarely need an inspector to go back and check a repair, so maybe the reason they don't charge is because it is a rarity that I ask and they know that I am a loyal client. I would never take advantage and have offered to pay...they just have refused.
Yes, the inspection company that we work withcharges a $100.00 re-inspection fee.
50 bucks for a reinspection.
I think buyers are better off asking for credit instead of seller repairs. Get estimates from reputable companies to know what it will cost.
I see it sometimes and if the buyer wants it done, the inspectors I use will do it with no charge. However, usually a paid receipt from the seller and a visual at the walk-though is fine.
I guess if someone hired an inspector not in my local area, they would charge to drive back into Ann Arbor.
Thanks, everybody, for your replies.
The problem with a paid receipt is the company may have gone out of business by the time a defect is discovered, and the sellers could have moved out of state or, worse, croaked. That's why it's a good idea to verify that the repairs were completed properly before escrow closes, when there is still time to do something about it.
As for credits, it's also recommended that a buyer obtain 2 to 3 estimates for the work. If any of the estimates say additional charges may be incurred, then we increase the credit.
In California, standard C.A.R. purchase contracts state the buyer is purchasing the property in "as is" condition, but that doesn't preclude the buyer from asking for repairs. It also doesn't bind the seller to completing the requested repairs nor giving the buyer a credit. That's where a good negotiator comes in handy. :)
If there is any kind of question about the quality of the work completed before escrow closes, I always recommend a re-inspection. Once, when a home inspector had to crawl under the house to check a bathtub plumbing leak, he charged the buyers $50, but many of them do re-inspect at no charge in Sacramento. It seems that the practice is split across the country.
Elizabeth - I've had a reinspection done once. The inspector charged about $75 or less (I can't remember exactly.). :)
Yes on the question of a reinspection fee. Remember the question to ask is are you putting your client's interests above yours? You have to go the extra mile to make sure that you are putting the extra effort in to make sure your clients interest are well above yours.
You are in court and the plaintiff's attorney ask you "why did you refuse to have the house reinspected to make sure that the work was done properly for you client....why...why?" Hopefully you will have an answer......
I am not a real estate agent but I strongly believe that if repairs are to be made, a reinspection should be necessary. I watched one of those court shows a while ago where the seller was to make repairs. He decided to do them him self and totally botched it. The buyers didn't do a reinspection but they did receive compensation for repairs.
Here, when I was an agent, the inpector I used waived the reinspection fee. I thought of that as a way to form a lasting partnership and to gain referrals.
Of course an inspector should charge for a reinspection. Why would they not?
Inspectors perform vital services and are not paid commensurate with the importance of their contribution to the transaction.
If serious defects are found that involve carpentry, windows, flooring, roofing, etc., who is going to inspect the work? Surely not the agent. The buyer can accept the repairs but better not come back complaining later on.
Until the day when home owners perform good maintenance on their home, stop hiding defects, provide honest disclosures, etc. the home inspector is the buyer's best friend, after their agent.
Inspectors in the Chapel Hill and Durham NC markets all charge for reinspections. They typically charge about $150 for the return visit. I am a strong believer in doing a reinspection both to hold the sellers feet to the fire and to ensure everything was done properly. I always advise my buyer clients to do this if there is a long list of repairs. If the list is short and the repairs are minor I do not recommend the reinspection. Regardless if there is a reinspection or not, we look at all of the repairs during our final walk through.
To re-inspect or not to re-inspect from my perspective has to do with whether the repairs are simple to confirm and easy to access. If it's painting the front steps, that doesn't need to be re-inspected. But items that require a permit and no permit was produced or complicated structural issues or work under the house, absolutely, they should be reinspected.
I have clients right now who insisted on a second pest report that revealed more work required under the home, which is being completed. I explained that the pest company is on the hook, that it promised to pour footings, but the buyer's only recourse after closing is to go after the company. The likelihood is it will be completed as promised, especially since it's the pest company's second go-around. But I did offer these clients the opportunity to call the inspector back. They decided the risk of noncompletion was too small, and that's their choice to make.