A $400 expense saved my client a $95,000 mistake!
Many times my clients have questioned why they need to spend $300 - $400 on a home inspector. They have many reasons not to spend that money: they have purchased homes before and they know what to look for; they have been or are currently in construction and can spot problems; this is a new build home and the county issued a Certificate of Occupancy, so it must have passed all the inspections.
Well, this is a story about my buyer who avoided making a $95,000+ mistake. My buyer, Kristyn, had been looking for a home for about a month and found a home in the Stapleton subdivision that was just perfect: it was updated and only 5 years old; had a yard - but not too big; was close to running trails and parks; had a wonderful wrap-around deck; was in a great neighborhood and much closer to her work.
She made an offer on the property and after some negotiations, the buyer and seller reached an agreement. Then we moved on to the inspection period in the contract. Inspections are the #1 reason for contracts failing. So they are a very important event.
The inspector Kristyn used was one that I have used for 11 years. I have great faith in my inspector. The home looked great above ground. But in the crawl space, we had another story.
There seemed to be structural issues: the concrete used on the foundation and walls was crumbling; the support beam was too long and was twisted; and the final straw was that the soil underneath the vapor barrier was squishy - indicating there was moisture intrusion under the home. Moisture is one of the top enemies of a home.
Kristyn really wanted this home. This was just perfect for her. She had already mentally moved her furniture in. This home was only 5 years old so certainly the builder would correct any problems.
I counseled her that working with the builder could take months if not years and she was not guaranteed that the builder would correct the problem or even be in business in another 6 months. I thought she was buying someone's problem.
Reluctantly we started looking again at other properties even as we talked with the listing agent, the seller and the builder on the home that she already had Under Contract. After a few days of the builder insisting that there was no problem with this home, that our inspector must not know what he's talking about, Kristyn had heard enough.
With great disappointment, Kristyn terminated the contract on the Inspection Clause and received her earnest money back. Three days later, we found another home in the same subdivision that was the same identical floor plan and model - except this one was on a slab instead of a crawl space. The inspection on this home went well. She closed on this home about 1 week later than she would have on the other home.
Kristyn moved in and is very, very happy in this home. Her furniture went exactly where she had pictured it in the other home. But that's not the end of the story.
Fast forward 11 months - the original home is still on market; it's price has gradually been reduced from $349,000 to the current price of $255,000. My guess is that the builder never stepped up to the plate - even though they had a 10 year structural warranty on this home. This poor homeowner can't get rid of this home and is going to have to take a big loss and her credit will be damaged.
I'm just glad that it's not my buyer that is stuck with the problem and the huge $95,000 mistake because Kristyn paid $400 for an inspection.
Who do you know that could benefit from this type of experience and resources? E-mail me their contact information and I'll take it from there. I promise to take good care of them. Blog@DreamsCanHappen.com
Posted at 05:15PM Nov 18, 2009
by Vickie A Hall in Real Estate |
