Home inspectors may have seen every type of home imaginable, from wrecks to regal, but we all find one topic that stays the same.Sooner or later, clients ask “What’s it worth?” Or “Is this A Good Deal?” Or “Would you buy this?”
What’s a home inspector to do?
The right answer depends of the situation, of course. “Duck” may be the most common answer. “Tell them to rent a bulldozer” is a very rare answer, but it’s been known to come out, once in a blue moon.
In between, there is a better path.
It’s best to come up with useful answers, and a fair explanation, that do not look like avoiding the question.
Most home inspectors shy away from answering those questions most of the time — for perfectly good reasons. It doesn’t play to their strong suit. Answering them well takes more than they can see.
Home inspectors take classes and pass tests about practically every type of construction, all the major systems and components in a home, and most of the big things that can go wrong in a home. That’s a qualification for a home inspector’s license. They hardly ever study sale prices for homes. That’s not required to qualify for a home inspector’s license.
Price Requires Different Information
When it comes to the home’s condition, home inspectors have a lot to offer. That is something they can see, evaluate, and report. They do that every day.
Most home inspectors shy away from answering those questions most of the time — for perfectly good reasons. It doesn’t play to their strong suit. Answering them well takes more than they can see.
Home inspectors take classes and pass tests about practically every type of construction, all the major systems and components in a home, and most of the big things that can go wrong in a home. That’s a qualification for a home inspector’s license. They hardly ever study sale prices for homes. That’s not required to qualify for a home inspector’s license.
Price Requires Different Information
When it comes to the home’s condition, home inspectors have a lot to offer. That is something they can see, evaluate, and report. They do that every day.
Prices are different. Arriving at a price routinely requires different information. Most of the time, visual inspection of a home is not enough to produce the kind of information that pricing depends on,. Pricing also employs on a different process than visual analysis of a home’s condition along. Prices generally take research and, usually, negotiation.
Even so, most home inspectors, sooner or later, have taken the leap, once or twice, and told a client the house was beyond repair, or suggested the client find out what else they could buy for the same amount of money. It’s rare, but it happens. There is no rule against it.
As long as home inspectors stay in their domain – professional opinions about the condition of the dwelling – no statute, regulation, or rule prohibits that kind of advice. In fact, it probably is a public service.
The problem area covers the majority of inspections. Practically no houses are “perfect,” although most home inspectors really enjoy working through one that comes astonishingly close. That’s one of the pleasures of the work. For most homes, a home inspection does not turn up enough information to give a good answer to a question like “What’s it worth.”
Condition Is Key to Value
Even so, make no mistake about the basics. It’s a fact that the condition of a home drives its value more than anything else. Condition also forecasts expenses people are likely to take on. Overall, condition is one of the most important things about a home.
You’ve heard people say the price of a home “comes from three factors: location, location, location.” That’s a red herring.
Think about it. The price of practically everything you buy is primarily a result of the condition it is in. A car with 150,000 miles of wear and worn tires is worth less than the same make car with 1,000 miles on it. Trees, shrubs, and plants in perfect shape, well taken care of, are worth lots more than bent, broken, or sickly ones. That’s true wherever they are located.
In fact, the main reason “location” even gets involved in home prices is that the condition of houses in the neighborhood also affects each home’s value. One of the tragedies of the recent housing meltdown was homeowners who watched helplessly as home after home in their neighborhood went into foreclosure. Having empty, foreclosed homes down the street, with unmoved lawns and zero upkeep, hurt the value of every home there.
When it comes to condition, no one is better trained and equipped to describe a home’s condition than a home inspector. (FHA appraisers complete a three-page form that describes a home’s condition in some detail, but the FHA warns it is no substitute for a home inspection. Everybody knows those folks are not going in crawl spaces or walking attics or roofs, and they get appraisal licenses without the training to do home inspections.)
Still, while condition is the most powerful influence on value, it is not the only one.
Some Limits
So many people think a home inspector is the one to ask if a home price is a “good deal.”
As Clint Eastwood famously said, “A man’s got to know his limitations.” The next job is being clear with clients about ours. Aligning client expectations with what a home inspector actually does is crucial, both to customer satisfaction and to avoiding complaints.
Talking about a “good deal” involves information beyond just pricing. Translating condition into a price tag – and then a price tag into a “good deal” for one client – is a very different job. The difference shows up several ways.
For example, a home may be a “good deal” for a client who is handy and has all the tools they need, and a poor pick for a client who wants no more trouble than hanging pictures when they move in. Home inspectors never really know the skills each client brings to the home being inspected.
It’s also important to keep in mind that home inspectors are not appraisers. Neither is anyone else in most real estate transactions. There’s a different license for appraisal skills and reporting.
Even so, most home inspectors, sooner or later, have taken the leap, once or twice, and told a client the house was beyond repair, or suggested the client find out what else they could buy for the same amount of money. It’s rare, but it happens. There is no rule against it.
As long as home inspectors stay in their domain – professional opinions about the condition of the dwelling – no statute, regulation, or rule prohibits that kind of advice. In fact, it probably is a public service.
The problem area covers the majority of inspections. Practically no houses are “perfect,” although most home inspectors really enjoy working through one that comes astonishingly close. That’s one of the pleasures of the work. For most homes, a home inspection does not turn up enough information to give a good answer to a question like “What’s it worth.”
Condition Is Key to Value
Even so, make no mistake about the basics. It’s a fact that the condition of a home drives its value more than anything else. Condition also forecasts expenses people are likely to take on. Overall, condition is one of the most important things about a home.
You’ve heard people say the price of a home “comes from three factors: location, location, location.” That’s a red herring.
Think about it. The price of practically everything you buy is primarily a result of the condition it is in. A car with 150,000 miles of wear and worn tires is worth less than the same make car with 1,000 miles on it. Trees, shrubs, and plants in perfect shape, well taken care of, are worth lots more than bent, broken, or sickly ones. That’s true wherever they are located.
In fact, the main reason “location” even gets involved in home prices is that the condition of houses in the neighborhood also affects each home’s value. One of the tragedies of the recent housing meltdown was homeowners who watched helplessly as home after home in their neighborhood went into foreclosure. Having empty, foreclosed homes down the street, with unmoved lawns and zero upkeep, hurt the value of every home there.
When it comes to condition, no one is better trained and equipped to describe a home’s condition than a home inspector. (FHA appraisers complete a three-page form that describes a home’s condition in some detail, but the FHA warns it is no substitute for a home inspection. Everybody knows those folks are not going in crawl spaces or walking attics or roofs, and they get appraisal licenses without the training to do home inspections.)
Still, while condition is the most powerful influence on value, it is not the only one.
Some Limits
So many people think a home inspector is the one to ask if a home price is a “good deal.”
As Clint Eastwood famously said, “A man’s got to know his limitations.” The next job is being clear with clients about ours. Aligning client expectations with what a home inspector actually does is crucial, both to customer satisfaction and to avoiding complaints.
Talking about a “good deal” involves information beyond just pricing. Translating condition into a price tag – and then a price tag into a “good deal” for one client – is a very different job. The difference shows up several ways.
For example, a home may be a “good deal” for a client who is handy and has all the tools they need, and a poor pick for a client who wants no more trouble than hanging pictures when they move in. Home inspectors never really know the skills each client brings to the home being inspected.
It’s also important to keep in mind that home inspectors are not appraisers. Neither is anyone else in most real estate transactions. There’s a different license for appraisal skills and reporting.
Despite that, clients often get confused. Bankers and mortgage lenders hire appraisers to protect themselves, in case they have to collect on the loan by repossessing the house in foreclosure. They want to know it can be resold for at least the balance of the mortgage loan. If the home is a “good deal” for a buyer, that’s nice, but that is not the reason lenders hire appraisers.
Most inspection standards of practice point out that home inspectors are not required to estimate fair market value or the like.
Still, that does not mean home inspectors live in outer space. It also does not mean home inspectors are prohibited from giving any help at all. As a practical matter, it’s bad for business to play dumb. Clients are put off by the feeling a professional they hire is not giving them the straight scoop, or may be holding back. It’s a problem of balance, and finding the right path for the usual, typical situation.
Home inspectors can help clients a little in this department, mainly by helping clients help themselves. In this day and age, there are several useful tools people can use to get fairly close to value estimates for a home.
Here’s a map of tools that can be used to get a better idea of a home’s value.
PVA Assessed Value
For starters, anyone can check the “assessed value” of a home online. In Metro Louisville, for example, the place to start is http://jeffersonpva.ky.gov. Many county Property Valuation Administrator (PVA) records are online now.
The PVA’s “assessed value” is required by law to approximate fair market value, in each Kentucky county. The Jefferson County PVA site also provides a list of “neighborhood value” for comparison to the specific house being checked.. PVA neighborhood values are at http://jeffersonpva.ky.gov/property-search/property-listings/. For some reason, you have to pay to get much more, like the date of construction. It’s easier to get elsewhere.
No government or computer site is “up to the minute,” of course. If the house burned last week, the PVA assessed value probably will not reflect that. PVA assessments for individual homes are updated every few years, not daily, except when a home is sold. But it’s a start.
More Info
Most inspection standards of practice point out that home inspectors are not required to estimate fair market value or the like.
Still, that does not mean home inspectors live in outer space. It also does not mean home inspectors are prohibited from giving any help at all. As a practical matter, it’s bad for business to play dumb. Clients are put off by the feeling a professional they hire is not giving them the straight scoop, or may be holding back. It’s a problem of balance, and finding the right path for the usual, typical situation.
Home inspectors can help clients a little in this department, mainly by helping clients help themselves. In this day and age, there are several useful tools people can use to get fairly close to value estimates for a home.
Here’s a map of tools that can be used to get a better idea of a home’s value.
PVA Assessed Value
For starters, anyone can check the “assessed value” of a home online. In Metro Louisville, for example, the place to start is http://jeffersonpva.ky.gov. Many county Property Valuation Administrator (PVA) records are online now.
The PVA’s “assessed value” is required by law to approximate fair market value, in each Kentucky county. The Jefferson County PVA site also provides a list of “neighborhood value” for comparison to the specific house being checked.. PVA neighborhood values are at http://jeffersonpva.ky.gov/property-search/property-listings/. For some reason, you have to pay to get much more, like the date of construction. It’s easier to get elsewhere.
No government or computer site is “up to the minute,” of course. If the house burned last week, the PVA assessed value probably will not reflect that. PVA assessments for individual homes are updated every few years, not daily, except when a home is sold. But it’s a start.
More Info
In addition to “assessed value,” price reflects other comparable sales, in housing and practically everywhere else. That kind of information also can be found on the web and it is updated constantly.
Several free web sites with well regarded price estimators are available. Among them are www.city-data.com, www.zillow.com, and www.trulia.com. Each site has its own sources and mix of data, so each one produces different results. But the more a client knows, the closer they get.
None of these computer sites are informed by actual on-site viewing of the condition of the home at this time. All they know is databases. Still, the truth is that automated computer appraisals, using pretty much the same databases, are becoming more and more common for mortgage lenders and underwriters. They are far from worthless, even if they do not provide a price that “hits the nail on the head.”
Computer value estimates are based on computer comparisons of recent sales in the vicinity and price trends, using formulas or programs that generally are not made public. Using more than one computer estimator helps arrive at a ballpark estimate of a home’s value that is much better informed than any single home inspector is likely to be.
All three sites deliver comparative data for Kentucky (state-wide), a zip code, and a specific address. Each one also has its own features and attractions.
City-Data.com
There is a lot to like about the City-Data.com value estimator. On City-Data, you start by jumping to a “Zip Code Detailed Profile.” That’s a very useful start. The Profile shows a 6-year chart of home sales trendlines in the zip code, by price and by volume (how many). It’s easy to see if prices and sales have been going up or down there. (You can also search “Just Listed” homes in the zip code while you’re there to look around at asking prices.)
The “Home Value Estimate” tool is right below the chart.
It produces more than just a number. It gives a “low range value price” and a “high range value price” instead of just one number. Then it rates how reliable the info is likely to be by estimating its “confidence.” The price range is too wide to be a lot of help, typically. Averaging the low value and the high one produces a number that often is around 10% lower than the Zillow estimate.
Below that is a list of home sales it used to arrive at those numbers, showing their dates and distance from the home being asked about, along with a map showing them. Then comes more data that most people ever thought of asking about, like ages of people living there, rental units and rents, property taxes, age of the housing stock, owners, condos, public and private schools, disabled residents, facilities with environmental impacts, and a breakdown of mean house values.
Computer value estimates are based on computer comparisons of recent sales in the vicinity and price trends, using formulas or programs that generally are not made public. Using more than one computer estimator helps arrive at a ballpark estimate of a home’s value that is much better informed than any single home inspector is likely to be.
All three sites deliver comparative data for Kentucky (state-wide), a zip code, and a specific address. Each one also has its own features and attractions.
City-Data.com
There is a lot to like about the City-Data.com value estimator. On City-Data, you start by jumping to a “Zip Code Detailed Profile.” That’s a very useful start. The Profile shows a 6-year chart of home sales trendlines in the zip code, by price and by volume (how many). It’s easy to see if prices and sales have been going up or down there. (You can also search “Just Listed” homes in the zip code while you’re there to look around at asking prices.)
The “Home Value Estimate” tool is right below the chart.
It produces more than just a number. It gives a “low range value price” and a “high range value price” instead of just one number. Then it rates how reliable the info is likely to be by estimating its “confidence.” The price range is too wide to be a lot of help, typically. Averaging the low value and the high one produces a number that often is around 10% lower than the Zillow estimate.
Below that is a list of home sales it used to arrive at those numbers, showing their dates and distance from the home being asked about, along with a map showing them. Then comes more data that most people ever thought of asking about, like ages of people living there, rental units and rents, property taxes, age of the housing stock, owners, condos, public and private schools, disabled residents, facilities with environmental impacts, and a breakdown of mean house values.
Home mortgage values in the zip code also are charted at the bottom – and they’re broken down by FHA-FSA/RHS & VA or Conventional, as well as refinancing and remodeling categories. That’s just a sample! Overall, this is the most data rich site today.
Zillow.com
The Zillow “Zestimate”® for value is at http://www.zillow.com. Zillow has worked hard to fine tune its estimating tool, recently announcing “third generation” algorithms to improve it further. The estimating tool reliably predicts actual home sale prices around 85% of the time, Zillow reports.
When you land on the Zillow home page, the Zestimate® tool is on the right side of a dialog box in the center. Enter the home address, click on the button, and you get a one number estimate of price, instead of a price range. The Zillow estimate often has been around 10% higher than the average of the high-low estimates of City-Data.com. But averaging those two numbers probably gets about as close as any two computer feeds are likely to get in a matter of minutes.
The Zillow screen also shows a projected rental rate. Comparing monthly rent and mortgage payments is a textbook way to arrive at a “good deal” evaluation in many cases.
Zillow.com
The Zillow “Zestimate”® for value is at http://www.zillow.com. Zillow has worked hard to fine tune its estimating tool, recently announcing “third generation” algorithms to improve it further. The estimating tool reliably predicts actual home sale prices around 85% of the time, Zillow reports.
When you land on the Zillow home page, the Zestimate® tool is on the right side of a dialog box in the center. Enter the home address, click on the button, and you get a one number estimate of price, instead of a price range. The Zillow estimate often has been around 10% higher than the average of the high-low estimates of City-Data.com. But averaging those two numbers probably gets about as close as any two computer feeds are likely to get in a matter of minutes.
The Zillow screen also shows a projected rental rate. Comparing monthly rent and mortgage payments is a textbook way to arrive at a “good deal” evaluation in many cases.
A “Details” button adds the year built, square footage, last sale date, and the last sale price. A map shows neighboring houses and each of their prices. You can click on any of the neighbors and get square footage, bedrooms, and baths. Pretty cool. A list of nearby schools follows.
The “Local Info” tab on the tool bar had neighborhood details and state information, but not Louisville stats. For that, you have to click on Real Estate Market Reports, under Local Info, and then enter Louisville and start a search. It produces a chart of 5-year trends in Louisville home values.
Trulia.com
Trulia.com produced the highest price estimate among the three sites, along with a photo of the house. That’s a nice touch, although the picture was several years old. It also gave the bedrooms, bathrooms, acreage, and date the home was built.
Trulia provides an interesting “average list price for similar homes for sale” and the “average sales price for similar recently sold homes,” along with the average listing price for the zip code. The difference is fairly wide between average list price and average sales price in the zip codes sampled. Charts under the “Market Trends” tab can help explain that.
Trulia graphs median sales prices for over a decade. (That’s different from “average,” which is the mean sales price.) The longer view over time is more help than shorter 5 to 8-year charts. It brings prices well before the housing meltdown, as far back as 2001, into view. Trulia also charts median sales prices for the zip, with a year-over-year percentage change (declines are in red). There also are comparative charts of the number of listings and average listing price, but weekly, along with a multi-year average price per square foot graph. That “price per square foot” number is the kind of thing appraisers often use, if you want a preview of how an appraisal might go.
A “Louisville Real Estate Overview” tab under “Local Info” in the tool bar charts city-wide trends and helps compare neighborhoods.
Still, for a few homes where it was possible to check with neighbors, the Trulia price often seemed to be on the high side, though prices are picking up faster at this time (early 2013) than they have in years. Maybe it’s just more forward looking.
Finding a Close Starter Number
Once again, averaging the three sites values typically seems to be a closer approximation than any one of the three values.
The “Local Info” tab on the tool bar had neighborhood details and state information, but not Louisville stats. For that, you have to click on Real Estate Market Reports, under Local Info, and then enter Louisville and start a search. It produces a chart of 5-year trends in Louisville home values.
Trulia.com
Trulia.com produced the highest price estimate among the three sites, along with a photo of the house. That’s a nice touch, although the picture was several years old. It also gave the bedrooms, bathrooms, acreage, and date the home was built.
Trulia provides an interesting “average list price for similar homes for sale” and the “average sales price for similar recently sold homes,” along with the average listing price for the zip code. The difference is fairly wide between average list price and average sales price in the zip codes sampled. Charts under the “Market Trends” tab can help explain that.
Trulia graphs median sales prices for over a decade. (That’s different from “average,” which is the mean sales price.) The longer view over time is more help than shorter 5 to 8-year charts. It brings prices well before the housing meltdown, as far back as 2001, into view. Trulia also charts median sales prices for the zip, with a year-over-year percentage change (declines are in red). There also are comparative charts of the number of listings and average listing price, but weekly, along with a multi-year average price per square foot graph. That “price per square foot” number is the kind of thing appraisers often use, if you want a preview of how an appraisal might go.
A “Louisville Real Estate Overview” tab under “Local Info” in the tool bar charts city-wide trends and helps compare neighborhoods.
Still, for a few homes where it was possible to check with neighbors, the Trulia price often seemed to be on the high side, though prices are picking up faster at this time (early 2013) than they have in years. Maybe it’s just more forward looking.
Finding a Close Starter Number
Once again, averaging the three sites values typically seems to be a closer approximation than any one of the three values.
It was not unusual for the three site average to come in very close to the “high range value price” on City-Data. That three site average also was about 15% below the Trulia estimate and about 5% above the Zillow estimate. The average also felt close to neighbors who were asked. In the one or two cases where a recent appraisal was available, because of refinancing, it was the closest to the appraisal too. Overall, this is a reasonably useful start, and way more info, that’s more up-to-date.
On the other hand, the PVA assessed value was closer to “as is” fair market estimates for homes in seriously distressed condition. In those (few) instances, the computer sites probably gave an idea of projected sales price for the same home in something more like average condition. This disparity also may be true of homes with substantial improvements that are not reflected in square footage, bedroom and bathroom counts. A home we inspected with literally miles of new wiring for fully automatic lighting, plumbing, home theater, and climate controls – all of which also could be controlled for the owner’s car – and a backup generator, is one example. The listing price (and the appraisal later) came from comparable sale in the neighborhood, but nothing in the neighborhood was anything close to the equipment and work built into this all-electric home.
The tools and sites here are useful primarily for conventional single family residence values — the majority of home inspections by far — but not other, outlier specialized kinds of real estate. Certainly there are more elegant calculations that can be fine-tuned from basic economics, like rent-to- mortgage ratios, inventory and sales velocity comparisons, ground rent capitalization, etc. Clients always should use any tool and all the help they can.
Though there are three basic approaches to appraising real estate value, practically all residential home values come out of the “sales comparison approach” – aka the “market data approach” – to estimating prices. The web tools described here do too, though the lid each site keeps on its calculations leaves everyone guessing exactly how sale prices of comparable homes get adjusted for factors like physical (on-site) features, locational (off-site) influences, changes in market conditions, and the like. Appraisals and PVAs do not exactly spell out all that stuff either, by the way.
There are several other methods for valuing real estate. Most factor the sales comparison approach into broader formulas. A “cost approach,” whether its is based on reproduction/replacement cost or depreciated cost (such as market extraction methods) is a textbook example. Income capitalization methods, or yield capitalization techniques, also can be used. Those methods, and the properties they were built to value, require different kinds of information, beyond the scope of the sites mentioned here.
However, those methods almost always are used outside the setting of residential single family home pricing. An investor buying a home with plans to convert it to commercial use, for instance, needs more than these sites are designed to supply. A client asking about “highest and best use” will want to use one of the other tools to estimate price.
On the other hand, the PVA assessed value was closer to “as is” fair market estimates for homes in seriously distressed condition. In those (few) instances, the computer sites probably gave an idea of projected sales price for the same home in something more like average condition. This disparity also may be true of homes with substantial improvements that are not reflected in square footage, bedroom and bathroom counts. A home we inspected with literally miles of new wiring for fully automatic lighting, plumbing, home theater, and climate controls – all of which also could be controlled for the owner’s car – and a backup generator, is one example. The listing price (and the appraisal later) came from comparable sale in the neighborhood, but nothing in the neighborhood was anything close to the equipment and work built into this all-electric home.
The tools and sites here are useful primarily for conventional single family residence values — the majority of home inspections by far — but not other, outlier specialized kinds of real estate. Certainly there are more elegant calculations that can be fine-tuned from basic economics, like rent-to- mortgage ratios, inventory and sales velocity comparisons, ground rent capitalization, etc. Clients always should use any tool and all the help they can.
Though there are three basic approaches to appraising real estate value, practically all residential home values come out of the “sales comparison approach” – aka the “market data approach” – to estimating prices. The web tools described here do too, though the lid each site keeps on its calculations leaves everyone guessing exactly how sale prices of comparable homes get adjusted for factors like physical (on-site) features, locational (off-site) influences, changes in market conditions, and the like. Appraisals and PVAs do not exactly spell out all that stuff either, by the way.
There are several other methods for valuing real estate. Most factor the sales comparison approach into broader formulas. A “cost approach,” whether its is based on reproduction/replacement cost or depreciated cost (such as market extraction methods) is a textbook example. Income capitalization methods, or yield capitalization techniques, also can be used. Those methods, and the properties they were built to value, require different kinds of information, beyond the scope of the sites mentioned here.
However, those methods almost always are used outside the setting of residential single family home pricing. An investor buying a home with plans to convert it to commercial use, for instance, needs more than these sites are designed to supply. A client asking about “highest and best use” will want to use one of the other tools to estimate price.
Clients that need to use those techniques also needs to use commercial and due diligence inspection services. Unless a home inspector also has advanced training, such a Professional Learning Institute commercial inspection class, it is not advisable to attempt commercial inspections. Reporting factories, strip malls, retail showrooms, restaurants, churches, office buildings, and the like are an entirely different subject. A home inspection license does not cover commercial inspections, or equip the inspector for commercial and due diligence work.
The shorthand automated estimates here also will not be as useful in individual circumstances where easements, encroachments, leaseholds, or zoning or deed covenant restrictions complicate things, for example. Still, overall, for the vast majority of homes and clients a home inspector sees, there is no better way for consumers to get a handle of home value in a short time and little cost. It’s certainly a whale of a lot better than banking on the asking price.
As a quick way to get into the price neighborhood, with data more up-to-date than it is reasonable to expect from a mere mortal home inspector, getting a rough number from the PVA and then using the three sites, by averaging their estimates, can be pretty handy. Each site also opens the door to lots more useful information.
The shorthand automated estimates here also will not be as useful in individual circumstances where easements, encroachments, leaseholds, or zoning or deed covenant restrictions complicate things, for example. Still, overall, for the vast majority of homes and clients a home inspector sees, there is no better way for consumers to get a handle of home value in a short time and little cost. It’s certainly a whale of a lot better than banking on the asking price.
As a quick way to get into the price neighborhood, with data more up-to-date than it is reasonable to expect from a mere mortal home inspector, getting a rough number from the PVA and then using the three sites, by averaging their estimates, can be pretty handy. Each site also opens the door to lots more useful information.
Put It In the Inspection Contract?
No inspector has to memorize this stuff. Being conversant in these options will get clients on a better track. Some inspectors hand out a sheet with the web sites and some basic information.
No inspector has to memorize this stuff. Being conversant in these options will get clients on a better track. Some inspectors hand out a sheet with the web sites and some basic information.
A few home inspectors put the web sites and PVA information for their area in their contracts — along with their other exclusions. You know — the part that says “home inspection reports do not address environmental hazards; home inspectors do not do warranties, or guarantees, or estimate fair market value,” etc. That’s a handy way to be sure all clients get the same information, and avoid getting criticized for forgetting to tell someone. Clients also don’t have to memorize three web sites, or call up to get reminded, and inspectors don’t waste time on site writing the info down.
In a written list, it also is worth reminding clients that these tools have limits, and certainly are nowhere near perfect, or the “be all and end all” of pricing, of course. “Market value” is the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, with the buyer and seller acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Blow the foam off that beer, and for the normal home transaction, fair market value for one specific home is, in the end, the price is just what a willing buyer will pay a willing seller.
Home shoppers also can employ appraisers to assist them, as a mortgage lender almost certainly would. Real estate agents also have skills useful to get another opinion of value.
No matter what, however, the basic rule in buying real estate always applies: caveat emptor. “Buyer beware.”
We all have to do our homework, and get the best help we can when we need it.
Home inspectors can help a great deal — because “It Pays to Know.”
Home shoppers also can employ appraisers to assist them, as a mortgage lender almost certainly would. Real estate agents also have skills useful to get another opinion of value.
No matter what, however, the basic rule in buying real estate always applies: caveat emptor. “Buyer beware.”
We all have to do our homework, and get the best help we can when we need it.
Home inspectors can help a great deal — because “It Pays to Know.”
I am searching for the best Manhattan Beach Home Inspector Service for my home. Please give some best recommendations.
Assuming we’re talking about Manhattan Beach, CA, we’d start by looking at http://www.creia.org and http://www.ashi.org/homeinspectors/California.aspx,
We also would check out the Better Business Bureau. http://www.la.bbb.org/Find-Business-Reviews.
Other respected national organizations with localized web tool to search for home inspectors include http://www.nachi.org/ (Inter-NACHI, or the International Association of Certified Home Inspectors) and http://www.nahi.org/ (the National Association of Home Inspectors).
In our experience, the best home inspectors are active in their area professional association(s) and are BBB (Better Business Bureau) accredited. There are other web review sites, of course, but we consistently have found the BBB both trustworthy and less vulnerable to competitor comments disparaging businesses.
A third check is to interview the home inspector. Post a comment in response if you’re curious about questions that might help you.
CREIA (the California Home Inspectors Association) and ASHI (the American Society of Home Inspectors) are both voluntary professional groups of home inspectors that were founded in the mid-1970s. They both are member funded and offer education, training and support services to members and provide online tools to locate member home inspectors in specific areas. CREIA “certifies” inspectors and “master inspectors.” ASHI certifies “home inspectors.” The two groups have similar requirements and are organizationally close. Both use the National Home Inspector Exam, originally produced by ASHI, to certify home inspectors, as do many licensing states.
Home inspectors are not licensed in the State of California. That is not necessarily a bad thing. Although the majority of states license home inspectors, it has been far from a hands-down success in a number of states.
California law has defined home inspections and home inspectors, and set up basic duties. since Jan. 1, 1997. Business and Professions Code, sections 7195-7199. http://www.leginfo.ca.gov/cgi-bin/displaycode?section=bpc&group=07001-08000&file=7195-7199
“Home inspection” in California is “a noninvasive, physical examination, performed for a fee in connection with a transfer, as defined in subdivision (e), of real property, of the mechanical, electrical, or plumbing systems or the structural and essential components of a residential dwelling of one to four units designed to identify material defects in those systems, structures and components.”
That approximates the typical definition of “home inspection” in licensing states. The “material defect” home inspectors are required to report in CA also is equivalent to the standard used in most other licensing states.
A material defect, which home inspectors are required to report, is defined under the law as “a condition that significantly affects the value, desirability, habitability, or safety of the dwelling. Style or aesthetics shall not be considered in determining whether a system, structure, or component is defective.”
California’s “unfair business practice” law also prohibits home inspectors from repairing properties they inspected in the 12 months prior to repair or remodeling. It also forbids taking kickbacks, and paying referral fees to agents.
California has a consumer friendly 4-year statute of limitations for commencing a claim against a home inspector. The clock starts to tick on the date of the inspection.
A California home inspection contract also is prohibited from limiting a home inspector’s liability “to the cost of the home inspection report.”
Beginning in 1996, California’s legislature instructed courts that its legislaative intent was to permit courts to “consider the standards of practice” of CREIA, ASHI “and other nationally recognized home inspection associations.”
For a number of years, there has been ongoing debate between the former California Coalition of Home Inspectors (CCHI) http://www.thecchi.org/ (now disbanded) and the California Association of Realtors, http://www.car.org/, over whether California’s Civil Code Sec. 1102 relieves sellers and agents of liability by providing a “substitute disclosure” (for the required disclosure of sellers and agents).
Magnificent points altogether, you simply won a new reader. What could you recommend about your submit that you made some days ago? Any sure?
As a property incptseor in Australia I’m amazed at how many Realtor’s and vendors jeopardize the sale ad all their hard work. It is tough out there, it is hard enough to win a listing then if they’re lucky enough to finally find a buyer, all that hard work is now at risk and in the hands of the buyers choice of incptseor. That incptseor may be the dreaded expert relative or even an unqualified, uninsured, mate of a mate who thinks it’s their job to sensationalize minor defects, make unsubstantiated comment on the value or sale price of the home, some even make comments like don’t buy this one, because it doesn’t face the right way you’ll never be able to resell it . I could go on, I’m writing a book of Horror Stories about people who didn’t get an inspection and there is already a couple of chapters on this subject.I just don’t understand why anyone would put in so much work and expense in winning a listing, finding a buyer then allow the sale to be put at risk when one simple step is all that is needed. Our experience shows homes that are pre-inspected do sell a lot faster and with less hassles. Imagine being the only agent in town that goes to market with every home pre-inspected, full disclosure, here’s the house warts and all, that’s why it’s at that price. A pre-inspection report takes any defects off the negotiating table immediately, (lets be honest, we all know there is no such thing as a perfect house) satisfies any doubts or buyer remorse, speeds the sale process, buyers can offer a clean contract with no conditions, less price negotiations and the sale is no longer at risk. To all the realtors out there, please take back the control of the sale, after all that is part of your job isn’t it.