What exactly is a home purchase?

What exactly is a home purchase?  The answer to that question is both simple and complex, depending on who you ask.  To a real estate agent, no matter whether he or she is working for the seller or buyer agent, it is a sale, a source of income.  To the lender, home purchase is an investment intended to get future income for investors.  But, for the home buyer, a home purchase is the most complex.  To the home buyer, the home purchase is among many things an investment, one of the largest purchases that he/she will ever make, one of the scariest steps in his/her life, a dream, a future, a place to raise a family, a refuge, a social tie to the community, a form of non-verbal communication and, whew, so many other things.  I better stop before my brain catches on fire.

BUT, one of the most important things that a home purchase should be to a buyer usually is put way down on the list.  A home purchase, first and foremost, is a business deal.  Someone is selling a product and someone is buying it.  Why is it then that many buyers put less thought and consideration into this deal than other much less important ones?  I think that many buyers feel totally overwhelmed (freaked out) by the complexity of the home purchase.  Therefore, a number of these buyers defer (that is, trust) others involved in their buying process, which is usually the real estates agents.

Most real estate agents do a great job of helping buyers find properties and they have a basic understanding of homes and their construction.  However, many of these professionals do not have the detailed knowledge about the home to help a buyer make an educated buying decision.  That is, the agents usually cannot supply specific information about the home's elements that could impact the buyer financially.

And that is an important point.  The buying price of a home is NOT just the price being asked.  A buyer should also factor in all taxes, heating fuel, electrical, school fees and tuition, transportation between work and typical shopping and entertainment locales, and the normal costs of living in the home.  But, I did not mention what could be the biggie--current and future repair and maintenance costs.

That is where people like myself, the home inspector, come into play.  Part of our job is to identify the near and future repair and maintenance costs.  We cannot state exactly what those costs or work might be.  But, at the least, we can give the buyer warning that those costs are imminent.  With this information, the buyer can consult with specific professionals to get more accurate costs.  For example, a home inspector should be able to identify roof problems, where upon the buyer can ask a roofer to provide an estimated repair cost.  A home inspector could also let the buyer know the approximate age of a furnace, most of which have a lifetime of about 15 to 20 years.  The buyer can then get an estimated replacement cost for an HVAC company.  Hopefully, you get the idea.

The home inspector also should be looked at as having a perspective that no other party in the buying process has.  The home inspector is supposed to be the only TRULY NEUTRAL party providing service to the buyer.  (I say "supposed to be" on purpose and will go into more detail about that point in a future post.)   The home inspector is the buyer's extra eyes and building expertise.  As such, he/she is supposed to provide the buyer with important information that should be factored into the buying decision.  The only money he/she should be making from the deal is his/her fee.  Whether the home sells or not is not his/her concern because he/she gets paid the same.

Some will likely argue that appraisers are also a neutral parties; but their work tends to be more important to the lending and real estate tax agencies.  Usually, buyers determine their own estimate of a home's value using their own criteria regardless of the appraisal.  Insect inspectors and radon testers should also be neutral agents; but in reality are part of the home inspection.  Even then, some insect inspectors and radon tests also provide remediation services too.  That is why, I recommend that these services be purchased through the home inspector to provide a layer of protection for the buyer.

So, I will close with a thought.  Given a home inspector importance to what is most likely the most expensive and important purchase in a person's life, why do so many buyers trust their real estate agents, who have vested interest in the sales, to select the home inspector?  Given that importance, why do most home buyers select their home inspectors primarily by his/her fees and not credentials?  And that is where I will leave the discussion for another day.