Monday, November 7, 2011

Everything is not okay, but that's okay

As a buyer in a real estate transaction, why is it important to have an inspection?

The answer is not “to make sure everything is okay.” In all of the homes I've looked at, not once has everything been okay. Not in the half-million dollar homes, not in the $50,000 homes.

In a perfect world, an inspector's job would be to confirm that everything is okay—that is, to confirm that the contractor of this new house installed everything properly, or to confirm that the seller of this old house maintained everything properly. I would like to live in that world.

But I don't.

Since this is the internet, let's start this discussion with a black-and-white example: would you bid $100,000 on a house that needs $10,000 in roof work that you don't know about? You would, but only because of what you don't know. If you knew that it needed $10,000 in roof work, wouldn't you bid $90,000? Would you even consider buying it at all?

In many cases, you don't get to know all about the roof's condition before signing a contract to purchase a house. The seller may tell you that the shingles were installed last year, but do you know if they were installed properly? Do you know if last month's hail storm did any damage? Do you know if there are any manufacture defects which could cause insursability issues?

And that's just the roof.

Part 2: What are you buying?