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Prime deal killers? Home inspections
It used to be that "buyer's remorse" was the No. 1 deal killer. Not anymore.
Buyers still get cold feet. Frequently, it's nervous rookies who have never made such a large purchase -- often at the urging of well-meaning parents who scream "You're paying how much for that hovel?" -- who still blow up their share of sales.
But nowadays, according to a survey of Assist-2-Sell agents throughout the country, independent home inspections seem to be the chief reason otherwise perfectly good contracts between otherwise willing buyers and happy sellers never reach the closing table.
"In my opinion," says Doug Howell, an Assist-2-Sell agent in O'Fallon, Mo., "the biggest deal killer is a building inspection." Sandra Marsinelli, who works in Revere, Mass., seconds that.
Of course, there are other reasons. Financing falls through, especially if the buyer is using an inexperienced or less-than-honest mortgage broker, or the funding lender refuses to follow through as promised. Or the buyer simply does not qualify.
"The weak link is the mortgage process," says Andy Spatafora in Boca Raton, Fla.
In other instances, the buyer's agent doesn't know how to draw up a contract, can't handle counteroffers or is incompetent.
"We are continually astounded by the inability of agents who do not know how to write a contract or to logically negotiate a transaction," says Howard Harris in Fountain Hills, Ariz.
Assist-2-Sell agents -- the Reno, Nev.-based company has 600-plus offices in 44 states -- stress that overall, few contracts fall through. But when they do, it's usually because of the home inspection.
Sometimes, an overzealous inspector writes up a laundry list of minor items, a list so long that buyers believe the place fell for will fall down around them once they move in.
Other times, it's the buyers kill the deal by demanding that the seller fix every little thing on the inspectors' list. Or the responsibility lies with the seller, who balks at repairing anything, no matter how minor.
Listen up, folks: The inspector's report should not be taken as anything more than what it is, a statement on the condition of the property the day it was examined.
If the inspector is doing his job properly, you will be told what doesn't work properly and what kind of life is left in the appliances and major components.
An inspection is an objective visual examination of the physical structure and systems of a house, from roof to foundation. It is not an appraisal, which determines market value. It is not a municipal inspection, which verifies building-code compliance. And it cannot pass or fail the property.
While an inspection clause should be part of the sales contract, making the deal contingent on the inspector's findings, the clause should specify the terms and conditions to which both parties are obligated. And there should always be a little give-and-take after that.
"Our job is to provide a thorough and objective inspection of a home's condition so that a homeowner or buyer can make an educated purchase decision," said Frank Lesh, president of the 6,000-member American Society of Home Inspectors.
Buyers and sellers need to stop beating each other over the heads with the inspector's report, but that's not to say they shouldn't have the place inspected at all.
Indeed, sellers should consider having their houses examined before they put them on the market so they can fix whatever is wrong, and buyers should determine the home's condition before proceeding with the sale.
But they also need to put themselves in each other's shoes:
*Buyers: The only things you should be overly concerned about are major flaws that will interfere with your ability to live comfortably in the house.
If the air conditioning doesn't work or is on its last legs, yes, the buyer should fix it or have it replaced. But if a window is stuck or a door squeaks, get over it and move on.
In other words, don't sweat the small stuff. You can take care of the little things after you move in, at your own pace and your own cost.
*Sellers: Your place ain't the Taj Mahal. No matter how much you love it, it has issues you overlook. So don't be too stubborn. Sure you've dropped your price to far below what you think the place is worth, but give a little bit.
Think about it this way: If you were buying your house in the shape it is now, wouldn't you demand that the rotted laundry-room floor be replaced or the breaker panel be fixed?
But, that's not what's going on out there, according to the Assist-2-Sell agents.
"One of the problems I see is with the home inspection and the weight that is put on it," said Eddie Wockenfuss in Gilbert, Ariz.
"When someone buys [an existing] home, it will have some mileage, just like a used car. Too many buyers use the home inspection to create a grocery list of repairs they ask the seller to pay for.
"The main purpose of the inspection is to look for latent defects and structural problems," Wockenfuss said.
"I fault home inspectors for striking fear in buyers," he said. "If a home is 10 years old and nothing has been done other than routine maintenance and cleaning, that is what you are buying.
"If the buyer wants a new home, then they should buy it."
In some cases, according to Howard Harris, buyers are trying to take advantage of sellers in a down market. Because they anticipate that prices may continue to slide, he says, buyers have become "very demanding" about the property's condition.
"They know that if the seller does not want to fix things, they can go elsewhere," Harris says. It's the same thing in Portland, Ore., where Cynthia Prestrelski works. "Repair issues, without a doubt," she said.
"As it becomes more of a buyers' market, buyers are many times pushing the envelope. Many of them seem to want a brand-new house out of a resale," Prestrelski added.
But Edmond Lavi in Beverly Hills, Calif., indicates that hardheaded sellers are just as much to blame. So does Todd Tramonte in Dallas, who says sellers "are unwilling to deal with problems."
Sellers are unreasonable, agrees Doug Dhuse. When faced with "picky" buyers, the Madison, Wis., agent says, "sellers become stubborn and won't budge, thinking they have already given the house away, even though it's been on the market for a year. When sellers do give in, they sure resent it."
Such reluctance of either party to bargain is another big deal killer.
"I have seen sellers choose not to sell over $100!" says Keith Wettstein in Jacksonville, Fla.
"For reasons unknown to me, some sellers would rather go through the entire sales process [again] than spend an extra $100, which is ridiculous. Some sellers will place their attitudes as top priority, just so they can be right as opposed to making a smart business decision."
Write to Lew Sichelman c/o Chicago Tribune, Real Estate, 435 N. Michigan Ave., 4th floor, Chicago IL 60611. Or e-mail him email@example.com. Sorry, he cannot make personal replies. Answers will be supplied only through the newspaper.