The Awful Truth

Forgoing a Pre-Purchase House Inspection Costs a Buyer Dearly

Vickie Lewis was raised on a farm in Oregon, so she was entranced when she visited a small yellow house for sale in rural Damascus in late April.

It was dilapidated and needed a coat of paint, she thought, but it was situated on a 6 1/2 -acre lot with a beautiful sloping hill, overlooking a stream and a grove of trees. Lewis knew the house, built in the mid-1960s, would likely sell quickly in the spring's feverish real estate market. She spent several hours that sunny afternoon strolling the property.

The real estate agent told her that the sellers would not accept an offer requiring a home inspection, but Lewis went ahead with the $437,750 purchase anyway. She was worried that she would lose the house otherwise to a more eager buyer, she recalled.

"I didn't buy it with my head, I bought it from my heart," Lewis said recently. The sale closed in July.

This week she had her first chance to get a full analysis from a home inspector, Arthur S. Lazerow, president of Alban Home Inspection Service in Frederick. As she walked the property with Lazerow, who pointed to one problem after another, Lewis found out the cost of deferring the inspection until after the sale. In an intense afternoon session with the inspector, Lewis learned many things she hated to hear.

Back in April, Lewis wasn't alone in going forward with a home purchase without securing a home inspection first. But now, as the market appears to be cooling, home inspections are becoming more frequent, although not as much as work-starved inspectors would like.

From 2003 to early 2005, however, sellers were firmly in command of the market. Buyers desperately bid against each other for the opportunity to buy from the unusually small pool of homes for sale. By some estimates from local real estate agents and inspectors, more than half of buyers dropped the home-inspection contingency from their purchase contracts -- even though many in the industry consider it an essential protection for buyers. A home-inspection contingency allows a buyer to walk away from the sales contract if the inspection uncovers major defects that the seller won't fix.

Buyers waived the contingency because otherwise they would lose bidding wars: Many sellers rejected such offers outright, viewing them as bothersome and potentially expensive if problems were uncovered.

"You were doomed if you included it," said Diana Whitfield, an agent with Long & Foster in Burke. "If you kept it in the offer, you didn't get the house."

Whitfield said that many real estate agents urged home sellers to allow home inspections until they were "blue in the face," trying to explain to them that an inspection also relieved them of the prospect of future liability for problems. But sellers then "were on a different planet," she recalled.

"They were quite unreal about their expectations, about what they had seen and heard about the market," she said. "They'd say, 'My next-door neighbor didn't have to have an inspection; why should I?' Sellers had a lot of clout."

Many home inspectors, whose incomes plummeted along with the number of inspections, say that some real estate agents appeared to welcome the change. Without vexatious inspection issues, selling homes came to be "the most streamlined of transactions," said home inspector Tim Hockenberry, owner of Vienna-based Home Facts Inc.