LIVEVALUATION , May 2010 Issue. Submitted by Michael Connolly, CI Smart Move Inspections, Inc.
Last month’s installment touched on how a home inspector might address sections of the Uniform Residential Appraisal Report (URAR). Having already addressed the Subject Property, we will continue on into the Contract and Neighborhood sections of the form in this installment.
In a perfect world and from a home inspectors view, it is advisable to review the purchase contract. However, it goes without saying, the real estate transaction world is not a perfect one, so it is not surprising that it is uncommon for the home inspector to obtain a copy of the purchase contract. It is even uncommon for the inspector to know the contract price of the home. However, it is important that the inspector know some details, which are relevant to the inspection. Sellers sometimes agree to complete repairs based on disclosed defects as a part of the purchase agreement. For instance, the seller may agree to repair a crack in the basement wall or replace an old roof. The presence of any deed restrictions on the property may also provide valuable information to the inspector. For example, neighbors may have a maintenance agreement on a shared driveway. Some properties may also have sewage ejection stations to pump sewage up to a main public sewer. While many of these items would be excluded from a typical home inspection, it is necessary to list these items in the inspection report as limitations (items not evaluated during the inspection).
Seller concessions listed in the purchase agreement may include items relating to the inspection. Sometimes Sellers agree to pay for the home inspection, WDI (wood destroying insect inspection), Radon testing, etc. It is important that the inspector clearly define the client (usually the buyer) and should stay away from accepting payment from anyone other than the client. You cannot serve two masters!
Neighborhood & Site Sections
Urban properties, generally speaking, are required to comply with local zoning and building codes. They can span a wide spectrum related to condition, with some homes displaying deferred maintenance, usage changes over the years, and structural failures and/or repairs, while others are well maintained and professionally remodeled in the more desirable neighborhoods. For this reason, it is difficult for an inspector to anticipate conditions in urban neighborhoods.
Suburban homes are usually more uniform in building design, construction, age and condition, and as such are the easier properties to inspect. Often these are grouped in subdivisions consisting of homes of comparable age, size and quality of construction.
Rural Properties can be (and often are) a wild card because they are less likely to conform to zoning and building codes. In my service area, some counties have not adopted building codes, and if they do have them, they are not compliant and there is no enforcement thereof. In these areas, the quality of construction will vary. Rural properties may also have hidden issues such as underground fuel oil storage tanks and private waste disposal systems.
The characteristics of the neighborhood can provide clues about the age and condition of the subject property.
In some urban areas and in many suburban subdivisions, the homes are of similar age, price range and may have even been built by the same builder. When driving into the subject property’s neighborhood, I observe closely. Are the neighboring houses in good general condition or displaying deferred maintenance? Are there any promotional signs in the yards from contractors (siding, windows, roof, remodeling)? If many of the houses in the neighborhood have newer looking roofs, perhaps the subject property will have a new roof or will need one soon. It is not uncommon for a neighborhood to have suffered a weather event such as hail or high winds, which warranted widespread replacement or repair of the other roofs.