Bruce Nemovitz

When speaking at my seminars about the entire home selling process, I seem to be asked most often about home inspections. Home inspections are a critical part of the real estate transaction.

When I started as a fledgling Realtor in 1977, we would sell a home and the buyer would rely almost 100% on the seller's verbal statements as to the quality and soundness of their home. There were no condition reports as required by law today. A condition report asks the seller direct questions as to any problems they may have experienced over the years with the structural and mechanical condition of the home. Questions are direct such as 'have you had any water coming in the basement?' We interview the seller as to the condition of the furnace, plumbing, roof, electric and so on. If the seller has knowledge of any problems they've experienced, or have any reports from inspectors or contractors, this information is disclosed to the potential buyers who views the property. The buyers must sign this report when an offer is made.

The advantage of a condition report is to lay all of the cards on the table. The buyer is made aware about any potential problems they will incur, prior to beginning the negotiation for the property they desire. This avoids in most cases the deal 'falling through'. A buyer is less likely to back out if they are not met with surprises.

In some cases, a condition report may not be available, such as estates where the seller who lived in the property may not be able to answer the questions due to state of mind, or in cases where the seller has passed on.

Once an offer is accepted, the buyer typically has 10 days or so (depending on what is agreed in the offer to purchase) to have the home inspected for major structural defects, such as basement wall issues, basement drainage issues, electrical violations, plumbing problems, and roof damage or replacement. If a defect is found, that the buyer was not aware of, then the seller and buyer can negotiate and come to an agreement as to how to remedy the problem.

In the offer, the seller either has the right to repair any defect without the buyer having the ability to back out, or the seller does not have the right to remedy the situation unless the buyer and seller can agree on a solution. In most cases, minor issues come to the surface, and the buyer and seller usually agree on a satisfactory solution. Many times, it is just settled with a monetary credit to the buyer, with the buyer taking on the responsibility of the repair.

The current requirements of a condition report and buyer's inspections have kept the sellers and buyers in almost all cases out of court! In 1977, when I began my career, there were numerous court cases after the closing of the sale, due to either lack of knowledge of defects by the seller, or lack of disclosing all of the information a seller may have had, such as defects or notices received about future assessments or repairs to streets or sidewalks.

In summary, it is always best to disclose all of the information you have as to the structural or mechanical integrity of your home. Since the buyer will have a home inspection which will uncover any defects, it is better to let your buyer know about your home's weak points up front. Buyers do expect a significant number of minor issues in regards to the condition of your home. They do not want to be surprised about major issues that were known prior to the sale. Most importantly, most transactions do close, with minor credits or no credits for repair. If the home is priced to reflect problems, then reports from contractors or inspectors will satisfy your buyer.

Honesty is always the best policy and full disclosure keeps us out of court. Be assured that our new laws and way of doing business is far better than the system we had prior to the advent of condition reports and home inspections!

Bruce Nemovitz has been a full time Realtor for over 28 years and has successfully closed over 3,000 transactions. Please call Bruce and his team at 262-242-6177, and they will be happy to answer any questions you may have.