House Inspection a Potential Pitfall in Real Estate

OK, the house is SOLD! Attorney review is complete and the under contract banner has been pasted across the for sale sign on the property. Now it is time for the home inspection.

This can be a particularly stressful time during the process, not to mention a step that can upend a successful deal. Sellers, some who have been in their home for many years, often have a hard time understanding that there are issues with their property. And buyers, some who may be purchasing their first home, often have a hard time understanding that no house is perfect.           

That said, there are several items that may come up that any buyer has a right to ask for and that any seller should seriously consider fixing—or risk losing the buyer. Over the last three or four years, I have managed several transactions with inspection issues that might have been taken care of before the house was even shown if the seller had known about them.   

If you choose to hire a home inspector prior to listing the house, please note that every buyer has a different tolerance level for inspection issues. Some panic over broken window seals and loose garage door springs, while others gloss over back draft issues on hot water heaters—so work with your realtor to choose the repairs wisely and be prepared for the possibility of additional items once the house is under contract and the buyer arranges their own inspection.  I think that if you can catch those items that are most likely to come up again and again and fix them before the buyer inspects… you’re in good shape.

Some items that are “must fixes” include mold, chimney repairs, underground storage tanks, leaky roofs, septic issues (including decommissioned septic tanks), radon gas levels testing at over 4.0 picocuries, and asbestos tiles. These are all issues that any buyer will require repaired even if they are buying the house "as-is."

If you don’t choose to hire a home inspector before you list your home, consider addressing the following items when preparing to market your home. These are easy fixes that you may be able to do yourself and may avoid troubles during the inspection process:

1. Improperly ventilated attics; sometimes “mold” or condensation is evident. 
2. Windows: broken window seals, windows that don’t open, windows that don’t stay open.
3. Furnace: have your furnace or boiler serviced prior to listing the house.
4. Central air conditioning: during cooler months a central a/c unit cannot be run.  A buyer may request that money be held in escrow until such time that the system can be tested. Alternatively, a buyer may request records that the unit has been serviced. Have the unit serviced prior to listing the house. The compressor should be level, on a concrete slab and away from the house
5. GFI (ground fault interrupt) outlets: In older homes these outlets aren’t always present. Updated 2005 building codes state that these must be present in kitchens, bathrooms and laundry rooms. Some buyers will ask that you update outlets. If your home was built prior to 2005 you are not obligated to do this, but it’s an easy, inexpensive fix. And it will make things safer for you too!
6. Other electric issues: reversed polarity; issues with the electric box outside — often weather related.  Older outlets should be converted to three-prong outlets.
7. Permits for any work that has been done: If the township requires a permit, the buyer is going to want to know that the permits were properly acquired.
8. Any possible water issues such as loose tiles in the shower, or loose toilets.

(Please note that this is not a comprehensive list and should not substitute for a thorough inspection completed by an ASHI certified NJ State inspector.)

Additionally, in Basking Ridge, carbon monoxide detectors are required on every level where there is a bedroom. Smoke detectors are required on every level including the basement and a fire extinguisher must be mounted in the kitchen.

What’s happening in Basking Ridge? Below are April sales:

Closed Date

Address

Style

Development

Last List Price

Sale Price

% difference between list price and sale price

Days On Market

4/1/2011

66

Castle Way

Expanded Ranch

Meadow View Estates

$599,000

$570,000

95%

183

4/4/2011

52

Aspen Drive

Townhouse

The Ridge

$314,999

$315,000

100%

42

4/4/2011

12

Baldwin Court

Condo

Society Hill

$235,300

$225,000

96%

72

4/5/2011

89

Whitenack Road

Cape Cod

$329,900

$280,000

85%

122

4/5/2011

24

Beacon Crest Drive

Colonial

Beacon Crest

$1,199,000

$1,150,000

96%

28

4/5/2011

17

Dickinson Road

Townhouse

Amherst Mews

$699,999

$700,000

100%

151

4/7/2011

110

Spencer Road

Ranch

$437,500

$437,500

100%

3

4/8/2011

61

Arbor Circle

Half Duplex

The Cedars

$399,000

$385,000

96%

57

4/13/2011

3265

Valley Road

Ranch

$220,000

$188,000

85%

72

4/15/2011

2

Riggs Court

Townhouse

Maple Run

$439,900

$435,000

99%

22

4/15/2011

119

Smithfield Court

Condo

Spring Ridge

$209,000

$204,000

98%

53

4/18/2011

97

Aspen Drive

Townhouse

The Ridge

$339,900

$335,000

99%

15

4/21/2011

173

Patriot Hill Drive

Townhouse

Patriot Hill

$599,900

$590,000

98%

66

4/23/2011

343

Potomac Drive

Condo

Spring Ridge

$199,900

$185,000

93%

72

4/25/2011

41

S. Alward Ave.

Cape Cod

$499,000

$458,000

92%

46

4/25/2011

64

Aspen Drive

Townhouse

The Ridge

$399,000

$390,000

98%

6

4/28/2011

34

Maple Run

Townhouse

Maple Run

$469,000

$469,000

100%

21

4/28/2011

49

Baldwin Court

Condo

Society Hill

$232,000

$227,000

98%

206

4/28/2011

277

Penns Way

Townhouse

Society Hill

$319,900

$307,000

96%

32

4/29/2011

123

Constitution Way

Townhouse

Hamilton Woods

$559,123

$539,000

96%

10

4/29/2011

4

Bradford Lane

Townhouse

The Barons

$485,000

$475,000

98%

2