Should buyer’s agents attend property inspections?

By Andrew Wetzel

  • Buyer’s agents work for (not with) their clients.
  • Representing clients means working in their best interests.
  • The property inspection is a major contingency to work through.

Buyer’s agency creates expectations from and for both parties. Agents need clients to represent (that is how we get paid), and most buyers need guidance to complete a real estate purchase.

Agents and buyers seek a mutually beneficial relationship. This could be the start of a beautiful relationship!

Agency representation involves give and take: What does each side expect, and what are they willing to do to get what they want?

Agents expect to trade their knowledge and time for clients who are willing to do what they need to do to buy real estate.

The buyer wants to hire someone who knows what they are doing, will do what it takes to get them into their next home, will work in their best interests (identifying properties, negotiating the best terms and so on) and will promote and protect their interests every step of the way.

Both want and deserve loyalty.

Once a purchase offer is fully executed, the buyer’s agent assumes the role of director: keeping track of what needs to be done when and providing whatever guidance is needed to complete the tasks required to reach settlement.

The process typically focuses on two major aspects: inspecting the property to make sure that there are minimal surprises (unexpected maintenance can be costly!) and obtaining the financing so that the buyer can complete the purchase.

These are the most likely “deal killers” as sales are contingent on their completion. Contingencies are known events that may occur throughout the buying process that must be satisfied or waived to keep the sale moving, meaning they allow both sides to reconsider their original agreement.

I respectfully suggest that a buyer’s agent must be fully engaged in resolving all contingencies.

The property inspection involves hiring one or more competent people focused on identifying “material defects” (rather than cosmetic or update issues) with the major systems and structure.

Depending on the executed contract, the buyer’s response to the inspection results may include requiring the seller to make repairs and the right to terminate the sale.

Although broker policy may differ, I believe that a buyer’s agent should attend the property inspection to ensure that the inspector clearly explains what he or she is doing and what he or she sees to the buyer and to ensure that the buyer understands the process.

Inspections of “resale” properties usually reveal a list of recommendations that could appear far worse than what they really are, and frankly, I would never assume that even the best inspector can properly portray their findings to most buyers.

The agent is not the inspector and is not expected to act like one — nor should they. To best represent a typical buyer and to be able to best interact with a listing agent if repairs are requested, an agent needs first-hand knowledge.

I have heard a variety of reasons (or excuses) regarding why an agent would consider not attending an inspection. Avoiding liability is one, and I can only wonder how a buyer feels being left on his or her own — especially if problems are found.

Does the agent’s absence really manage potential liability? How does that square with the essence of the agent’s responsibility to their client? Is the agent too busy? Does he or she feel that he or she would be in the way?

At the very least, the client should be told upfront that the agent will not be there rather than face a surprise later.

Here is what I do know: Many buyers feel abandoned, especially if they do not know the inspector. Negotiating repairs, both with a concerned buyer and the listing agent, can be more difficult if the agent is not there to see what the issues are and what the inspector had to say about them.

Given the importance of this contingency, I would never want to miss an inspection. As a listing agent, I fully expect the buyer’s agent to be on-site as an inspection is really a long showing (it is unacceptable to provide access to others without the listing agent’s permission).

Bottom line: What is in the buyer’s best interest?

Andrew Wetzel is an associate broker with Long and Foster Real Estate in Havertown, Pennsylvania. Follow Andrew on Facebook or Twitter

How Much Home Should You Buy?

As the spring housing market heats up, you may have to act fast to get the home you want. But that doesn’t mean you should skip crucial home buying steps. Have a plan and stick to it to find the home you want.

  1. Be prepared. Choose a lender, share your financial information, and decide the down payment amount. The lender will come back with the highest amount you can borrow and your interest rate. Don’t fool yourself with a risky loan; get the safest loan for the longest term you can afford.
  2. Shop within your means. By fixing the financial variables, you also fix your price range. While you may be tempted to look at fancier homes to see what they have, but that will only make you less happy with the homes in your range.
  3. Don’t skip inspections. Sellers expect you to examine the home. You not only need to know what the home costs, but what it’s likely to cost soon for repairs, replacements and remodeling.
  4. Think long term. To recover closing and moving costs, you will likely need to occupy the home you buy for five years or longer. Choose the home that is most likely to meet your household’s needs for the longest foreseeable future.
  5. Add value. By adding on or making other improvements, you’re bringing the home up to the area’s best standards, which will help it hold and increase its value and appeal strongly to the next buyer.

The Joy of Older Homes

If you’re planning to buy your first home in 2017, chances are good it will be an older home. The latest American Housing Survey (AHS) showed that 41% of housing stock in the U.S. was built prior to 1969 and that the median age of owner-occupied homes was 37 years.

In most areas, smaller pre-war Tudor cottages, Craftsman bungalows, and mid-century ranches comprise many older homes. Each style has its own charm.

  1. The fairy-tale Tudor revival. The English Tudor revives late medieval architecture popularized during the House of Tudor reign, a period of unequaled enlightenment known for political reformation and the Renaissance. Late Gothic and ecclesiastical influences include charming leaded and stained glass windows, steep-pitch cathedral ceilings, arched doorways and exposed wood beams.
  2. The solid and home-y Craftsman bungalow. Popular as the middle-class retort to the fussy, formal Victorian style, the Craftsman ushered in minimalism, thanks to Frank Lloyd Wright and others. Craftsman homes celebrate wood, stone, iron, ceramic and glass artistry, with wood floors and wainscoting, large windows, built-in cabinets and hand-made Art Nouveau tiles.
  3. The automobile-loving Ranch. The mid-century ranch helped post-World War II families move to the sprawling suburbs while they commuted back to the city for work. Built with speed, ranch-style homes typically have no load-bearing walls in the interior of the home, making them easy and inexpensive to remodel. Get your atomic décor on with low-slung furniture, sputnik light fixtures and abstract art.

No matter which older home you choose, knowing a little history should bring you added enjoyment.

Finding the Perfect Neighborhood

There’s an episode of the TV series “How I Met Your Mother” where the characters decide to buy a home only to learn later that it sits downwind from a sewer plant. The message is obvious: A buyer must do his or her due diligence on prospective neighborhoods to avoid those kinds of mistakes. Here are a few tips:

Investigate the surrounding area: Good schools boost your property value. Research the closest parks and community centers and consider how busy streets impact the neighborhood. Check out stores and restaurants in the area. You may be used to a 5-minute drive to the grocery store, only to find out that your new home is 25 minutes away from the nearest place to buy milk.

Get to know prospective neighbors: Walk through the area and say hello to people. Ask them for their impressions of the neighborhood. While you’re at it, look around. Are there lots of kids on the block? Do people walk or jog through the neighborhood at night? A neighborhood can speak volumes by itself.

Research the Homeowner’s Association: What are the regular fees? Are there lawn or construction restrictions? Knowing these things can really make an impact.

A good real estate agent can furnish you with a wealth of local information and take you on a tour of the closest commerce centers, restaurants and shops. A little groundwork will help ensure that your dream house is surrounded by a dream neighborhood.

Six questions to help gain insight on a prospective home

When buying a home, you have to consider factors such as the home’s layout, condition and more. The seller must disclose the property’s condition that may alert you to issues such as mold, defective water heater or leaky roof. Here are six questions you should pose to the seller for additional insight before you make your final decision:

  1. Why is the seller selling the house?
  2. How much did the seller pay for the home?
  3. What does the seller like most and least about the property?
  4. Has the seller had any problems with the home in the past?
  5. Are there any nuisances such as barking dogs, airplane traffic or planned changes to the community?
  6. How are the public schools in the area?

Knowing all you can about a prospective home will help you make a more informed decision as well as make an appropriate offer. Your real estate professional can be a great resource in helping you get your key questions answered and give you advice on how to evaluate your findings.

Thinking About Co-ownership with a Friend?

Friends often share holidays, vacations and important moments in life. Why not buy a home together? Joint ownership makes sense, especially for those unable to afford a home on their own. Each can enjoy a real estate investment, and can even strengthen the friendship.

The opposite could happen as well. Friends can feud over the most trivial of things, placing the long-term housing investment at risk. Here are some tips for surviving co-ownership with a friend:

  • Disclose financial information: Know what you’re getting into. Agree upon the type of home and location, and are comfortable with living with one another.
  • Consult with an attorney: A contract is vital, as is listing each person’s name on the deed and the mortgage papers. The percentage of ownership must be clearly stated in the contract, including details of each person’s share of the down payment and the way in which mortgage payments are to be divided. This sets the stage for deciding each one’s share upon sale.
  • Get pre-approved for a mortgage: Odds are those buying a home will need to jointly qualify as co-borrowers on a single mortgage in order to purchase a property held in tenancy in common or joint tenancy.
  • Understand wants and needs: Options and terms will be contingent on each individual’s credit history, financial health and obligations—as well as what you’re both looking for in a house. Discuss all of this ahead of time.
  • Have an exit strategy: Job changes or unexpected romances could evolve where marriage will soon be in the picture. What happens then? This should be agreed upon before the house is bought.

Finding the perfect home for two can be a challenge. Just make sure that when buying any real estate with friends, you don’t let the friendship cloud your judgment.

What a Buyer Should Expect During the Closing

The last step in the home buying process is commonly referred to as the closing. The close of escrow is when all steps—from acceptance, title search, inspection, mortgage approval, and so on— come together in a final transaction. Documents are ready to sign, the buyer is ready to hand over the purchase price and the seller is ready to transfer title. And most importantly, the keys!

It usually takes about an hour and may be attended by some or all of the parties involved: buyer, seller, real estate sales professional, attorney and title company representative. The buyer reviews and signs the loan and real estate documents and pays for the property, closing and other costs.

Assuming that the funds are in order, the deed is correct and the title is clear, the final step is the disbursement of funds to the seller. The title company should have the funds in its possession, but the buyer needs to bring a cashier’s or certified check for the down payment and the closing costs if it was not included in the mortgage loan. If the buyer’s annual real estate taxes and homeowner’s insurance will be paid through the lender, an escrow account will also be established.

Once all the papers are signed and funds are disbursed, the buyer receives the keys and is now a homeowner.