Inspections and Disclosures

After looking at many houses, you find one that feels right. How do you determine objectively whether you should consider buying it? How do you know what kind of offer makes sense? The answers to these questions will be a mix of careful study, professional support, and your own subjective concerns. In this section, we will consider how to evaluate the condition of the house.

When you walk through the house, if there are significant problems, these will often present themselves if you pay attention. For example, if the floors seem uneven, you should suspect that there might be foundation issues. If you see rust stains in the sink, there may be deteriorated galvanized piping. If you notice 2-prong outlets, you can be pretty sure that the electrical system is antiquated.

We do not suggest that the prospective homebuyer needs to develop the trained eye of a professional property inspector. But the more carefully you look, the more likely you are to see issues to which you can direct your attention when reading the disclosure reports that will be provided by the seller. In a complete set of disclosures, in addition to the disclosures that are mandated by law (such as those concerning water heaters, smoke detectors, etc., and the transfer disclosure statement and its supplements) you will typically find reports that give you a good general picture of the condition of the house. These would include: general structural inspection (most important), structural pest inspection (termite report), and where warranted, roof, chimney, soils, septic system, water quality (for wells) and other specialized reports. Read these reports carefully.

The inspection reports, coupled with what the seller discloses about the defects of the house in the transfer disclosure and its supplements are very valuable information. The seller is required by law to disclose to you what they know about any material defects the property has. As a practical matter, you should not expect a lot of detail in the transfer disclosure, so carefully note any faults that are indicated, and consider the potential implications. If you learn to interpret the information from the seller and the inspectors, which your GLOABL REALTY agent can guide you with, you can often gain a pretty clear understanding of the physical condition of the property. Not always, though. Frequently, the most important inspection reports (typically the general structural inspection and the termite report) are absent, either because the seller doesn't want to pay for the reports, or because the seller believes a better price may be achieved if the defects of the house are not too explicitly defined. We believe in full disclosure, and expect our seller clients to provide thorough reports. Where full disclosures are not available, we strongly suggest that buyers either enlist the help of their own inspectors or take extreme care when bidding on such properties in overheated markets. You could be acquiring problems that are not explicitly known to the seller (who therefore cannot be held at fault for not telling you). Whatever it takes, in most situations you need to have a clear sense of the magnitude of the defects in the house you are buying and what it will cost to fix them.

Based on the finding in the general structural inspection, for example, it may be clear that the foundation is not performing adequately. Depending on the specifics, you might get a bid from a foundation contractor or consult with a structural engineer. An indication that the roof was near the end of its life would warrant getting a roof report, or if the contractor is willing to do so, a bid for repair/replacement (which is usually free).

The condition of the property is, of course, only one of the variables that you need to consider. The location-related issues are critical to determining a reasonable offer price and are covered in the Making and Offer page.