3 Reasons Home Inspection Companies Remain a Critical Part of a Real Estate Purchase in 2020
Date Published: October 21, 2019 [original article published by Scotts Home Inspection]
If you are a home buyer considering purchasing a residence, you may be asking yourself – is hiring a home inspection company really necessary in this day and age. Times are changing, the whole real estate purchase process is evolving, and with the ease of online sites like Zillow, Redfin, Opendoor, and others, searching for a home for sale has never been easier.
I can do so much research myself and know so much about a home before I even step foot into the place. So is a home inspection needed?
There are 3 reasons home inspection companies remain a critical part of a real estate transaction in 2020 and beyond. Times are changing, no doubt about it.
Every facet of the home purchase process is being optimized as technology advancements push the real estate industry as a whole toward solutions that benefit a more knowledgeable home buyer.
1. Increase in For-Sale-By-Owner and Low-Fee-Listing Properties
Traditionally, a homeowner would find a local real estate agent to help them list their home for sale. The agent would do research on comparable sales in the neighborhood and area, help the seller establish a listing price, arrange photographers to help present the property in the listing, and then coach the seller on the best ways to prepare the home for showings.
With the advancements in online listing platforms, sellers are finding that getting their homes listed for sale is a quicker and easier process than ever. Many sellers are taking the leap to list the home themselves without the help of a real estate agent.
According to the National Association of Realtors statistics, FSBOs accounted for over 7% of home sales in 2017, with this percent expected to grow to over 10-12% in 2019.
Other sellers may be seeking help from low-fee listing service companies that can get the home listed for a flat-fee or lower commission rate.
While there are upsides to these advancements, the downside is the potential loss of a real estate professional helping guide the seller through the process of preparing their home, properly completing disclosures, and knowing what repairs may be needed to help the home sell.
The results of these changes can be a home that isn’t as prepared for sale as it could be.
The role of the home inspector in representing the buyer grows in importance in cases like this, more so than usual. When a seller does not take advantage of the experience of a local real estate agent in preparing their home for sale, they may not address concerns prior to listing their home for sale.
And of course sellers loves their homes, so they may not clearly understand the need to repair or replace certain items prior to listing.
The critical eye of a good home inspector can help discover deferred maintenance items, immediate repair concerns, and items to monitor over time.
2. The rise in iBuyer Owned Listings
The latest trend in today’s real estate market is the rise of the iBuyer option for home sellers. This is where large real estate companies like Zillow, Redfin, Opendoor, or smaller local real estate companies will purchase your home directly instead of selling it.
The pain points in selling a home can all be eliminated when a seller chooses to work with an iBuyer to purchase their home.
Nobody really enjoys selling a home. Cleaning your homes, putting up with multiple showings, fixing nagging issues you have ignored, the stress of negotiating with a buyer, etc. – nobody looks forward to these items.
Along comes the iBuyer, willing to make a cash offer to purchase your home and take away all this headache. Certain home sellers find this option attractive and take advantage of it. The iBuyer company now owns the home and needs to clean and prepare the home for sale.
In reality, iBuyer’s are basically the new version of home-flippers. Their goal is to turn around the property and sell it for as much profit as they can with the least amount of investment possible.
That isn’t to say that there isn’t real value in what these companies are providing for sellers and the market. But they may be willing to leave in place concerns present in a home, in hopes of selling without the need to repair or replace defects or maintenance concerns.
Enter the home inspection company, representing a home buyer’s best interests. Home inspectors have no financial role in a home purchase, allowing them to be completely independent and unbiased in reporting on concerns observed.
If you have any doubts as a home buyer looking at a home that has been through the iBuyer process, having a professional home inspector on your team to give you a fair and unbiased review of the home, can give you peace of mind and a solid understanding of the condition of the home.
3. Technology Advancements Available to Home Inspection Companies
While the overall real estate market has experienced advancements, the home inspection industry has itself experienced improvements that benefit inspectors, and ultimately the buyer. Leading the way is the availability of tools and processes that were not something inspectors had years ago. Providing enhanced service offerings to buyers and their real estate agents helps to understand the complete condition of the home being purchased.
Infra-red scan tools have improved in features and dropped in pricing, allowing a home inspector to carry an IR camera in their tool bag. IR scanning can reveal moisture concerns, electrical issues, insulation concerns, and leaks that may not be readily visible to the naked eye.
Mold testing services that were once only available to industrial-hygienists and special labs, are now services home inspectors can offer, with fast turnaround on results, even next day in many cases.
Many home inspectors are adding sewer scope inspection services to their offerings, which allow inspection of the inside of the main sewer line leaving the home, to verify the condition of this buried line.
Others are adding Water-Quality-Testing, Pest-Inspections, Asbestos-Testing and other services that are above and beyond the basic home inspection standard of practice.
Finally, the quality of the report produced by a home inspector has significantly improved as technology advances have found their way to this niche industry. See one of our sample reports here.
Reports accessible via a website link are becoming standard, with high-resolution pictures of areas of concern, detailed write up of concerns with informational links, and the ability to share report concerns with agents and sellers to clearly communicate issues noted during the inspection.
The Times They Are a-Changing
The only constant in life is change. The real estate industry is in the midst of broad changes that will impact how buyers and sellers interact in the sale process of a home. Overall the changes are positive and helpful, but not without growing pains.
As with many changing industries, certain roles or processes get eliminated or minimized as technology advances. In the case of a real estate purchase transaction, many of the changes we are seeing only highlight the importance of a home inspection in the real estate purchase.
Getting solid information on the condition of a home is critical in the decision-making and due-diligence process.
By all means, use the new tools available when searching for a home. But don’t overlook the importance of hiring an independent, qualified home inspector to help you understand the home’s condition.