Buying foreclosed homes

[Blackjack200]

Home inspectors are just a formality, and in reality all but useless. Even when you hire your own they know that they can't afford to piss off the realtors because if they do they will get blacklisted and realtors are where most of their business comes from. You are much better off finding someone that knows about home construction and paying him a small fee to look at it for you.

I'd point out that they're also professionally liable if they miss something that they should have caught.

Home inspectors have pointed out numerous issues on the houses I've bought, including old water heaters, roof issues (i.e. evidence of leaks), foundation issues, etc.

One noticed an oil tank filler sticking up out of the ground that I either hadn't seen or just had never even really thought about (the house had gas heat). I ended up splitting the cost of removal with the seller.

 

[SMOGZINN]

At least in the state of Texas, every inspector has, as required by his insurance company, the clause:

Notwithstanding the provisions of any applicable statute, the sole and exclusive remedy available to the Client is damages in an amount not to exceed the fees actually paid by the Client for services, and all other remedies, statutory or otherwise, are hereby expressly waived by Client.

in his contract. The Texas courts have repeatedly upheld that the most you can get out of a inspector the the amount you paid for the inspection.
I know this is true for a number of other states as well.

 

[NetWareHead]

Home inspectors are just a formality, and in reality all but useless. Even when you hire your own they know that they can't afford to piss off the realtors because if they do they will get blacklisted and realtors are where most of their business comes from. You are much better off finding someone that knows about home construction and paying him a small fee to look at it for you.

I disagree and home inspectors' customers are home buyers, not realtors. Inspectors want a satisfied buyer to realize their value to the transaction and recommend them to other buyers. In my experience, I've never heard of a home inspector giving two craps about a realtor's opinion, unless the realtor is a buyer.

Many realtors have a working relationship with home inspectors and will recommend them to their buyers. Personally, I would not take a realtor's inspector recommendation. Even though the realtor has a fiduciary relationship and is paid by me, the cautious cynic in me would rather find an inspector not affiliated with my realtor. I want an inspector who does not have a vested interest in seeing the sale happen

 

[Blackjack200]

At least in the state of Texas, every inspector has, as required by his insurance company, the clause:

in his contract. The Texas courts have repeatedly upheld that the most you can get out of a inspector the the amount you paid for the inspection.
I know this is true for a number of other states as well.

Not that I don't believe you, but I'm pretty surprised by that. I mean, why would they even need insurance at all if they had practically no liability?

It makes sense that it would vary by state, I'll have to take a look at what PA/NJ allow for.

 

[NetWareHead]

Not that I don't believe you, but I'm pretty surprised by that. I mean, why would they even need insurance at all if they had practically no liability?

It makes sense that it would vary by state, I'll have to take a look at what PA/NJ allow for.

This. Typical rate is a few hundred dollars to check out a home. If that is the extent of their damages, insurance would not seem worth it.

 

[SMOGZINN]

Not that I don't believe you, but I'm pretty surprised by that. I mean, why would they even need insurance at all if they had practically no liability?

It makes sense that it would vary by state, I'll have to take a look at what PA/NJ allow for.

At least in Texas they have insurance because they are required to in order to be licensed. I have never heard of a claim on that insurance, because you basically can't sue them. The premiums on such insurance is ~$300 a year for $1 million coverage with a $5000 deductible.

 

[DrPizza]

This. Typical rate is a few hundred dollars to check out a home. If that is the extent of their damages, insurance would not seem worth it.

Insurance covers the cost of litigation when a homeowner sues them due to missing something. "How did you miss that there was a dead rat inside a wall?" "I don't have x-ray vision." "I don't care. I'm suing for the money we spent on the house. I don't want to own a house that ever had a rat in it." The cost to defend himself would be high - even if (and he will) he wins. But, with an insurance company involved, there's no easy money; just someone big enough to say, "pound sand" to the homeowner's lawyer.

 

[dr150]

Be ready for multiple bids if you live in a "hot" area like the Bay Area.

Losing out on 15-20 bids can be exhausting.

 

[Blackjack200]

Insurance covers the cost of litigation when a homeowner sues them due to missing something. "How did you miss that there was a dead rat inside a wall?" "I don't have x-ray vision." "I don't care. I'm suing for the money we spent on the house. I don't want to own a house that ever had a rat in it." The cost to defend himself would be high - even if (and he will) he wins. But, with an insurance company involved, there's no easy money; just someone big enough to say, "pound sand" to the homeowner's lawyer.

That doesn't make sense to me, tort lawyers aren't idiots, they're not going to take a case with little to no chance of success, they just don't have time for that stuff.

I took a quick look at NJ and it appears that they do require E & O insurance for home inspectors, which at least implies to me that they can be sued. They also have a statute that limits professional exposure to 4 years, though the links I followed also said that the exposure can be further limited through the contract.

I guess it's entirely possible that there are no statutes in Texas preventing home inspectors from being liable, but the contracts are all written that way. Just seems like a strage arrangment to me.

 

[boomhower]

Used a realtor for mine, it was an FHA foreclosure.