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HOME BUYERS FAIR : Consumer Protection : Buyer Safeguards Can Protect Home Purchases : Home Buying: Title insurance, inspections and warranties are becoming increasingly popular not only as security for the buyer, but for the seller.


The consumerism revolution of the 1970s and 1980s may have changed the rallying cry from "let the buyer beware" to "let the seller beware," but the savvy home buyer in the 1990s must still be on guard.

Home inspections, home warranties, termite inspections and title insurance are tools that help protect home buyers in the biggest purchase most will make in their lifetimes. They can also be useful marketing tools for a home seller.

Termite inspections and title insurance are required by custom and by lenders; home inspections and home warranties are not required under custom or law, but are highly desirable, according to real estate experts.

Home Inspection

When you've found the house you've been looking for and submit an offer to purchase, make the offer subject to the house passing an inspection by a professional home inspector. If the seller or his agent refuses, resume your search.

By custom, the buyer commissions--and pays for--the inspection.

A new coat of paint can hide a lot of defects from the average home shopper, but a professional inspector knows where to look for leaky roofs, crumbling foundations, substandard plumbing and the multitude of problems a house is heir to.

Obtain a professional home inspection even if you have a copy of the Real Estate Transfer Disclosure Statement (required under California law since 1987 and available from the listing broker or the seller).

Besides the fairly obvious home inspection areas of foundations, drainage, roofs, exterior siding, interior walls, plumbing, wiring, heating and air conditioning, an inspector should deal with such topics as asbestos in acoustic ceiling and pipe insulation and leaded copper pipe joints in houses 2 to 5 years old.

From almost no home inspections two decades ago, home inspection has become a significant sector of the shelter industry, with 165,000 of the 550,000 existing homes sold in California in 1988 inspected by a professional.

Here are some pointers for choosing a home inspector, along with suggestions on how to interpret and use the inspection report:

* Ask if the inspector is a member of the California Real Estate Inspection Assn. (CREIA) or the American Society of Home Inspectors (ASHI), or is a candidate--a person in the process of becoming a full member--of either organization.

* Check to see how long the inspector has been in business, as a home inspector.

* Ask if the inspector is experienced in residential construction, through education and experience or the possession of a contractors license. There is no license for a home inspector, but most authorities say a licensed contractor makes the best inspector.

* Find out if the inspector runs a repair business on the side or has a close tie-in with a realty firm. These are considered conflicts of interest by ASHI and CREIA and are banned by both organizations.

* Ask to see sample inspection reports. Some inspectors use a checklist, while others supplement the checklist with a narrative report. The latter is easier to interpret.

* The typical inspection should take 1 1/2 to 2 1/2 hours to complete and cost $150 to $300 or more, depending on the size of the house, according to John Heyn of ASHI. Many inspectors allow--even encourage--the client to accompany him or her on the inspection.

* Once you have chosen the inspector, you must make arrangements with the seller or the seller's agent to conduct the inspection.

According to Robert J. Bruss, a syndicated real estate columnist, lawyer and real estate broker, make sure that your offer to purchase includes a clause specifying a professional inspection, with the seller to pay for certain repairs. The seller probably will add a clause limiting the dollar amount of the repairs, Bruss says.

* Depending on physical aspects related to the house, such as soil conditions or hillside site, you may decide to have a professional engineer or a geologist inspect the property. In many cases, your home inspector can tell you if additional inspections are required.

* When you get the completed report, don't panic if the inspector lists many minor items that need fixing: This is to be expected in just about any house--existing or new. The idea of an inspection is not to uncover every minor flaw and problem with a house, according to Peter G. Miller and Douglas M. Bregman, authors of "The Common-Sense Guide to Successful Real Estate Negotiation" (Harper & Row, 1987).

"What a buyer really wants to know is: What needs to be repaired or replaced? How much will it cost? What steps can be taken to make the house run more efficiently? What repair bills can be expected in the next few years? . . . Should I make an offer requiring the seller to make certain repairs, or should I make a smaller offer or no offer?" according to Miller and Bregman.

Home Warranties

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