Seller’s Market: When a Seller’s the Windshield and the Buyer’s the Bug.
I’m writing this piece not only as a real estate broker, but more from the perspective of a home builder, which I was for twenty plus years prior to getting into real estate. My inherent nature, ever since I can remember, when I see something that isn’t working or broken, I try and figure out a way to fix it. The area of home inspection is one that I see demands attention and change.
Home Inspection is the weakest link in the entire process of property sales based on my experiences, prior to, when I was a builder and now being in real estate.
It’s imperative to have Mandatory State and National Licensing for anyone wanting to be a Home Inspector. Doctors, nurses, attorneys, beauticians, plumbers, electricians, real estate brokers, etc need to pass tests to acquire a license to do business or be employed. At this time, the State of Colorado does not require any type licensing for home inspectors, (Who are supposed to be professionals). I’ve vetted many home inspectors looking for my business, who are very much clueless when I show them photos of construction defects and ask them to explain what they are looking at and what they think the possible causes may have been. I use a couple who were actually in the trades prior to becoming home inspectors.
I would like to see a apprenticeship program for all would be home inspectors. Whether it is required by each state or nationally, it would give those looking to be home inspectors well rounded knowledge of the processes of home building. Anyone wanting to be a “Home Inspector” would need to go through a training program. A minimum of 24 months, working in the construction industry with a segmented apprenticeship calendar broken down by each trade. They would work a select amount of time in each trade over that 24 month period in residential construction. Once the training was completed , they would be required to pass a final comprehensive test for their licensing.
Once a law like this comes into effect and the home inspector meets and completes this requirement in their respective state, prior to selling a property, it would be a mandatory requirement to have a home inspection completed prior to listing the property. At that time, the owner could either correct or disclose the defects found on the property instead of buyers finding out about them during of after the process of purchasing the property. The seller could also add the cost of the inspection into the purchase price. Guidelines would need to be put in place for the initial transition period of implementing such a program because there would need to be time to fine tune it. I believe it would be greatly beneficial not only for the entire real estate, but also the construction industry as a whole in the long run.
When I enter into an agreement with a client, whether I am listing a property, or working with a buyer, my goal, be it either side is to have a fair and equitable completed transaction. In a seller’s market, like one we’ve been experiencing for the last three plus years, the anxiety for buyers can be “What do I give up to be more competitive?” Waiving home inspections is one area that some agents might suggest. Waiving a home inspection is one area I never, ever recommend not leaving in an offer.
CASE and POINT.
One Recent Example: I had put in three offers on different properties within a weeks time. We never heard back on the first offer, even after a follow up. We found out we were “runner up” on the second offer. The following day we submitted a third offer on another property. The agent from the second offer called the following day and asked if my clients were still interested because the original offer fell through in less that a day! I responded my Buyers have another offer in on a different property. We once again came it at “runner up”. I called the listing agent on this third property to see if I could find out how “far apart” our offers were. The agent responded the selected buyers are putting down more money and waiving inspection. We moved on. A day later, we are driving back from looking at a few more properties when my phone rings. It’s the agent from our third offer! You have to love real estate because you just can’t make this stuff up! It was DeJaVu! Almost like a skipping record! The initial buyer terminated in a day! The next day we moved forward and went under contract on the third property. The home inspection found that the entire home was wired with aluminum wiring and the service panel with breakers known for being faulty and never updated to code. If we would of waived the inspection, the burden to update and make the property a safe living situation (which is how properties are supposed to be conveyed) would of been my Buyers cost after already paying a premium price! I have a more than a few examples like this one.
I spent many years in the construction trades starting at age 14 in 1971. I learned the “Old School” way. I was blessed to have apprenticeships with real craftsman in the trades within the residential and commercial construction industry over the course of my years in construction. From operating heavy equipment and concrete work, framing (including rafters and building trusses), drywall hanging and finishing to cabinet making and finish work. I also spent a total of three years apprenticing with a master electrician and master plumber. I have the ability to jump in a backhoe, dig a hole for a foundation, setup and read a transit to set footers, forms, walls and subfloors (Yes, I shot my subfloors in with a transit). I like a level home! All those years gave me detailed knowledge of construction. It is not only my biggest asset, but also my biggest liability when I show properties.
Here are a tiny fraction of examples, from cosmetic to structural of what has recently been allowed in the sale and pending sale of homes on properties I’ve shown. Granted, an owner of a property may do as they wish with it, but when someone attempts to save money by doing it themselves without proper knowledge, or hiring unskilled, unqualified and unlicensed labor, the results are typically not good. They end up doing more harm than good, even with the best of intentions.
Not only unacceptable, but it’s up side down too!
I toured this property in 2016. My Buyers liked the property but, the “remodel job” was appalling to say the least. My clients asked me to convey to the listing agent if those who were doing this “fine craftsmanship”, would stop if my Buyers submitted and offer. My Buyers would of wanted to complete the job properly. The response from the listing agent was, “I already have several offers on the table.” If I were this agent, I would have trouble sleeping at night!
People can take all sorts of risks. I would not in good conscience have my buyers move forward on a property that I think would run into huge sums of cash to correct after the purchase, especially with home prices beyond realistic. When I see appalling work like this, I wonder how poorly the things you can not see were done on this particular property.
No Words!
My Guess, Installed in Complete Darkness.
In this day and age, it’s sad to see these kinds of things allowed to happen in the construction and real estate industry. I see/have seen this often in the sellers markets like we are experiencing currently. When inventory is very low and buyers are paying a premium for this king of garbage, it’s nothing short of criminal.
Professional Window Install?
Here is a property which, whomever did the work was clueless about what they were doing. I spent may years going in behind these professionals ripping out, replacing or repairing their “handy work” The “Nailing Flange” which should be on the inside, between the studs os sheeting and the trim is on the outside. This was the case on all the windows in this property.
A Property with Major Structural Issues.
Exterior Side of Interior Crack.
Improperly poured concrete when this property was built.
Another property I toured recently with different Buyers was similar to the property we’d seen the day before. Same subdivision, built the same year, same style, same price point. The difference being the condition of the second property pictured here. Unlike the first which was built by true craftsman, this property had major structural/foundation issues along with other health and safety issues. Whether it was the listing agent who set the price point based on “comps” or the Seller wanting the price for the property I do not know. I built many homes from the ground up in my lifetime. I’ve set many forms, poured a few thousand yards of concrete. I know what type of forms are used on many foundations by looking at the pattern left in the concrete and they type of snap ties imbedded in the concrete. I could tell by looking at what is happening to this foundation, how it was poured, what the viscosity of the concrete was when they initially filled the forms and how they lacked proper back filling and soil compaction. Concrete can tell you a story, if you know what to look for. These foundation issues were around the entire perimeter of this basement and garage. They also showed very obvious signs of settling on the main floor all around this property. (Personally, In good conscience, I would not have taken a listing like this unless the seller knew the implications of the possibilities of what a foundation in this condition would mean for buyers and a loan process. I’m surprised a lender would even underwrite a loan on a property like this. But then again, real estate is a “close enough” industry. I wish I could say these examples are isolated incidents, but I seem to run across more than my fair share of these “unique” properties.
Foundation issues throughout the entire basement.