When making an
offer to buy any type of property,
include a clause in your purchase
agreement that makes your offer
contingent upon the property passing
inspection. You must do this in order to
avoid being bamboozled by an
unscrupulous owner surreptitiously
masking a property's major defects. Who
should inspect your property for major
defects depends upon how much
construction knowledge and experience
you have. If you lack the necessary
knowledge and experience, you should
hire a retired tradesmen or professional
property inspector to snoop around and
inspect the property for major defects
that some owners will try and hide.
Conduct a search on the Internet to
obtain the names of certified or
licensed property inspectors in your
area. If you know what you're doing, you
can do your own property inspections.
That's what I do when I need to have a
property inspected. I simply make an
appointment with the owner and show up
at the property in my old coveralls with
my high-powered searchlight, trusty ice
pick, binoculars, extension ladder,
mini-tape recorder and inspection
checklists, and inspect the property
for:
1. Structural roof damage.
2. Sinking and cracking foundations.
3. Mold contamination.
4. Structural termite damage.
5. Structural dry rot damage.
6. Water and moisture intrusion.
7. Collapsed water and sewer lines.
8. Stripped mechanical systems and
missing electrical wiring.
9. Missing roofing material, gutters and
downspouts.
10. Rotting wood.
11. Signs of termite infestation.
12. Electrical, fire and safety hazards.
Inspect Suspicious Properties For
Environmental Contamination
In order to avoid buying a potential
toxic waste dump, have suspicious
properties inspected for various types
of environmental contamination that
could make a property uninhabitable and
render it worthless. By a suspicious
property, I mean a property that has
been used to house businesses such as
gas stations, dry cleaners, automobile
repair shops and other businesses that
use petroleum products, cleaning
solvents and hazardous chemicals. I
recommend that you hire a reputable
company to perform a phase one
environmental audit on any property you
suspect has been contaminated by some
type of environmentally hazardous waste.
Even if you don't suspect that a
property has any type of environmental
contamination, use the phase one
environmental audit checklist below to
conduct your own inspections:
Sample Phase One Environmental
Audit Checklist
When conducting a phase one
environmental audit, the inspector:
1. Examines the property's chain of
ownership for the past fifty years.
2. Interviews the current and available
past owners of the property to determine
if any present or past uses of the
property would have an adverse affect
upon the environment.
3. Reviews available past city
cross-reference street directories to
determine how the property was
previously used.
4. Reviews available topographic maps of
the property.
5. Reviews available historical aerial
photographs of the property.
6. Reviews available geological reports
affecting the property.
7. Researches local, state and federal
government files for records of
environmental problems affecting the
property.
8. Researches local, state and federal
government files for records of
environmental problems affecting
adjacent properties.
9. Conducts an on site inspection of the
property for obvious signs of past or
present environmental problems such as
odors, soil staining, stress vegetation
or evidence of dumping or burial.
10. Determines the existence and
condition of above ground storage tanks.
11. Determines the existence and
condition of underground storage tanks.
Housing Built Before 1978 May Pose
Potential Lead-Based Paint Hazards
The Residential Lead-Based Paint Hazard
Reduction Act requires that all sales
agreements to sell residential property
built before 1978 contain a Seller's
Lead-Based Paint Disclosure Statement
that discloses whether or not the
property has been inspected for
lead-based paint hazards, and if
lead-based paint hazards have been found
on the property.
Use HUD's Minimum Property
Standards For Housing Handbook
HUD Handbook, 4910.01 R01, Minimum
Property Standards For Housing, is an
excellent property inspection resource
that can be ordered online from the HUD
Direct Distribution System for free by
logging onto the HUD Direct Distribution
System.
Always Best To Do A Walk Through
Inspection With The Seller
I always insist on the seller giving me
a walk-through tour of any property I
may be interested in prior to starting
any negotiations to buy the property.
The reason I want the seller to show me
the property is so that I can study the
seller's facial expressions and tone of
voice as I ever so gently point out
needed repairs. Here's what I do. First
off, I show up for my prearranged
property tour right on schedule. I come
with my clipboard, flashlight, ice pick,
inspection checklists, binoculars and
calculator. I do this to show the seller
that I am a serious buyer, while I use
these tools of the trade to determine
the property's physical condition while
doing a rough cost estimate for needed
repairs at the same time. When I notice
some obvious structural defect or needed
repair, I immediately bring it to the
seller's attention with a comment like,
"how long has this crack been in the
ceiling?" Most sellers will respond with
something like, "Oh my, this is the
first time that I've noticed it." Sure
it is! In other instances, I'll just
point and shake my head or make comments
to myself like "hmm" or "oh boy!" But I
never insult the property owner. I just
want them to know that I see exactly
what is being offered for sale. The
reason I conduct the inspection in this
manner is to begin to dampen any
expectation the seller may have about
receiving their initial full asking
price.
