House Detective: Making the Most of Home Inspection

Dear Barry: Construction of our new home was recently completed, but four days before the closing, vandals broke into the house. They stopped up all of the drains and turned on the faucets. The builder found the mess in the morning. He immediately replaced the carpeting and some of the drywall, but he dismissed the possibility of mold. We are confident that he can repair all of the water damage but are concerned about future health issues in the home. Because of this, we may walk away from the transaction. Do you think we are overreacting?  Ken

Dear Ken:Your concerns about mold are reasonable, but this should not become a deal-killing point of contention. Mold may or may not be an issue in this situation, but the matter needs to be determined, one way or the other.

Mold typically occurs when there is a prolonged moisture condition. In this case, the moisture may have been addressed before mold had a chance to develop. A mold report would provide the answer to that question, and the builder should be willing to go that extra step to resolve your final concerns in the aftermath of the vandalism. Instead of dismissing the issue, he should hire a qualified mold inspector to evaluate the property and provide a comprehensive mold report.

Aside from the health effects of mold, there is another consideration in this matter: the issue of future disclosure. Flooding of the home is now a part of the property’s history. When you eventually sell the home, this will need to be disclosed to future buyers. A clean mold report can prevent that disclosure from raising major concerns. On that basis, the question of mold needs to be answered by a qualified professional.

Dear Barry: I am presently buying my first home and am bothered by a difference of opinion between my home inspector and the seller’s roofing contractor. My home inspector has 20 years of experience. He found the shingles to be worn and brittle, with two years of remaining life. But the seller’s roofing contractor says the roof has five years of life. My agent says we should get a third opinion, but I’m thinking of canceling the deal. Why can’t the experts agree on the condition of the roof?  Mikel

Dear Mikel: No one can assign an exact amount of remaining life for roof shingles. It is a subjective assessment, not an exact, scientific prediction. Whether two years or five years, the point is the same: The shingles show significant signs of aging and wear and have limited remaining life. They will soon need replacement.

If you really want the house, try to negotiate a cash credit for roof replacement as part of the deal. That would be reasonable for a roof with 2 to 5 years of remaining life. The amount of the credit should be based on a labor and material estimate from a licensed roofing contractor. For that purpose, it would be wise to take your agent’s advice regarding a third opinion from another contractor.

Dear Barry: I recently had a flood problem in one of the apartments that I manage. The unit was vacant, and several weeks passed before the moisture condition was addressed. Now there is mold on much of the drywall. Everyone I ask has a different opinion about mold. Some say I should hire a contractor who specializes in flood damage. Others say I should get a professional mold inspection first. And one person says I should simply clean the mold with bleach and repaint the walls. What do you say?  Don

Dear Don: The problem with mold today is that is can no longer be viewed as purely pragmatic issue. The overriding consideration has become liability. The days when mold could be washed with bleach and covered with paint are over.  Mold is now a legal problem, as well as a health consideration.

At the same time, the health affects of mold cannot be dismissed. Some people have been severely harmed by mold exposure. On the other hand, there are cases where moldy walls could be washed and painted with no adverse health consequences to anyone. But much more is at stake than the likelihood of health problems. For example, what happens when a future occupant of the building learns that there once was mold in the building and demands documentation to verify that the mold was tested and that removal was done in accordance with environmental standards and with follow-up air-testing. In that case, you would wish that you had done more than apply bleach and paint.

This is the situation that now exists because of past lawsuits and widely publicized hysteria about the dangers of mold. It is from this standpoint that one must consider matters of mold, especially with rental property.

On this basis, a thorough mold evaluation by a qualified expert is recommended, prior to repairing and refinishing the interior of the apartment.

Dear Barry: I am presently in escrow to buy a home, and the mortgage company requires that I buy flood insurance. This must mean that there has been flooding at some time in the past, but I see no evidence of water damage anywhere on the property. So I’m wondering, how serious can the insurance requirement be? Is there any way to find out if the house has been flooded, and if so, what was the extent of the damage?   Kathleen

Dear Kathleen: The requirement for flood insurance does not mean that the house has been flooded in the past. Mortgage companies typically base flood insurance requirements on the location of the property, not on its flood history. If a house is situated in a geological flood plane — that is, if there is the possibility of flooding every100 years — then flood insurance is usually required. In some cases, where only a portion of the property is situated in a flood plane, flood insurance will be required, even if the home itself is on higher ground and not located in the flood plane.

You should check with the county engineering department to determine whether the home you are buying is actually located in a flood zone. In some cases, it is possible to negotiate these insurance requirements with the mortgage company.

Dear Barry: We bought our home less then a week ago. After moving in, we found the water pressure to be unacceptable. It takes forever to fill the bathtub, but the previous owners had said that they used it all the time. Why did our home inspector say nothing about low water pressure?  Lori

Dear Lori: People often mistake low water volume for low pressure. For example, it is possible to have normal or even high pressure and yet have weak flow at the faucets. This often occurs in older homes where corrosion in old galvanized steel pipes restricts the flow, regardless of pressure. Low flow can also be caused by a faulty valve or by water-saving devices in the faucets.

According to the Plumbing Code, water pressure must be at least 15 pounds per square inch (psi) and no more than 80 psi. You should ask your home inspector to come back and review this condition. He should take a pressure reading and evaluate the flow rate at the tub. You should also get an opinion from a licensed plumber.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: As a real estate instructor, I teach many programs on ethics and disclosure to agents and people preparing to become agents. These same subjects are often addressed in your column. From your perspective, what can we Realtors do to enhance our ethical approach to real estate disclosure?  Janice

Dear Janice: Realtors are often advised, in seminars and trade journals, to disclose defects and recommend home inspections to clients. The reason given for this advice is to reduce liability and avoid lawsuits. That recommendation has merit, but it offers a narrow view of the issue. Reduced liability is a fringe benefit of disclosure. It is not the primary motive to disclose.

The best reason to disclose property defects is simple: It is the right thing to do. It is the way each of us wants to be treated in business. The focus, instead of liability, should be promoting the best interests of clients. Agents who pursue that approach, rather than a legalistic one, enjoy three primary rewards: They build a lifetime reputation for honest, ethical business practice; they receive the repeat business and referrals engendered by a solid gold reputation; and they reduce the likelihood of claims and lawsuits for undisclosed defects. From that perspective, here are some simple ways to put this into practice.

Agents should determine which home inspectors are the most experienced and most thorough, and they should provide a list of those inspectors to all of their clients. Articles and seminars often advise agents to provide inspector lists as a way to avoid liability, but the competence of the inspectors who appear on such lists is rarely mentioned. The problem here is obvious. If the list contains mediocre inspectors, then it fails on the ethics scale, while increasing the agent’s liability. If the client chooses an inexperienced home inspector from the agent’s list, disclosure will be incomplete, and disputes may occur after the sale.

Real estate brokers should be proactive about disclosure, even when they are not directly involved in transactions. Many brokers are laissez faire in their approach, uninvolved in the home inspector choices made by agents. This lack of oversight increases a broker’s liability. When a lawsuit for a faulty home inspection is filed against an agent, the broker is usually named in the suit. To avoid this liability, brokers should influence the inspector referrals made by their agents. The message should be, “This brokerage cannot afford disclosure related lawsuits. If you work for this company, you must recommend only the most thorough home inspectors available. Here is the list of inspectors we have found to be the most qualified.”

Brokers who wish to maximize this approach can test local inspectors to see who qualifies for the referral list. Inspectors can be hired to inspect a representative home, and the findings can be compared to see which inspectors provide the most complete disclosure.

Real estate professionals are in a service business. Success in any service business comes from treating customers the way you want to be treated. Homebuyers want to know what they are buying before they buy it, not after the sale is closed. Agents and brokers who approach their profession from this perspective will build reservoirs of repeat business for years to come and will simultaneously reduce their liability.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: Last winter, we had a house fire. The burn damage inside was relatively small, but the smoke damage was extreme.  It was so bad that we had to move out for several months, and the drywall, insulation, and floor coverings had to be removed from every room. While the house was unoccupied, the winter was unusually harsh, with ice on the inside and outside of the building. During this time, most of the windowpanes cracked, and the window frames no longer slide normally. The insurance company does not consider this to be part of the fire damage and are unwilling to pay for new windows. How can we convince them that the windows would not have broken if there hadn’t been a fire?  Rebecca

Dear Rebecca: The insurance company is avoiding payment for window damage on the basis of a slim technicality. They claim that the fire did not directly damage the windows. That may be true, but the window damage is an outcome of the overall situation.

While the house was stripped and unoccupied, the heating system was apparently not in use. Exposure to extreme cold and moisture altered the shape of the window frames and sash. The glass cracked due to stresses at the edges of the panes, and the frames became warped so that they no longer function properly.

When a home is occupied, the winter cold on the exterior of the building is offset by heat on the interior. The internal warmth prevents damage to the window glass and frames. While your home was unoccupied, the heat was turned off, as evidenced by ice on the interior. If a heat source had been maintained in the building, the window damage might have been avoided. Therefore, the window damage was an indirect consequence of the fire and should be covered by the insurance company. In fact, the insurance company should have known from experience that winter exposure to an abandoned building can cause further damage.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: The contractor who built my home won’t fix damages caused by flooding in our basement. We bought the house about a year ago, and the warranty covers one year of workmanship. We don’t trust the builder and want to hire a contractor to fix the problem and then have the builder pay for all of the repairs. We are preparing the case for court. What do you advise?  Marcos

Dear Marcos: If flooding occurs in the basement of a new home, this means the builder did not adequately provide for ground water drainage and waterproofing of the foundation walls. These are significant construction defects, and the builder is responsible for corrective work, which is likely to be very costly. In preparing your case, you’ll need professional evaluations for evidence. First, you need a report from a geotechnical engineer. In this case, that would be the fancy name for a drainage specialist.

Next, you should have the entire home evaluated by the most qualified and experienced home inspector you can find. A good inspector will find more construction defects than you are currently aware of, and the added list of defects will strengthen your case against the builder.

The entire matter should be handled by an attorney who specializes in construction defect law. And finally, you should file a complaint with the state agency that licenses contractors.