As Is Home for Sale and a Home Inspection

I hear from many people that they cannot do a home inspection because the home is being sold AS IS. This does not mean you are not entitled to a home inspection so in the event we find additional DEFECTS not noted in the disclosure that the owner is required to fill out truthfully.

You can walk through the home and get an idea of its general condition.  You may even spot some defects or items in obvious need of repair.  But you will not obtain the same detailed information you will receive if you hire Tri-State Home Inspections LLC.  Tri-State Home Inspections LLC is trained to look for things you are not likely to notice.  Tri-State Home Inspections LLC must follow the state Wisconsin and InterNACHI’s Residential Standards of Practice and check the roof, exterior, interior, foundation, basement, fireplace, attic, insulation, ventilation, doors, windows, heating system, cooling system, plumbing system, and electrical system for certain defects.  Armed with Tri-State Home Inspections LLC detailed report, you will have a better idea of what “as is” means regarding that home, which means you’ll be in a better position to know whether you want to buy it.  You may also be able to use information from the home inspection to negotiate a lower price.

If you do buy a home “as is” without hiring a home inspector and then later discover a defect, all is not lost. Tri-State Home Inspections LLC  may be able to review the seller’s disclosure and testify as to what the seller knew or should have known about.  The inspector may find evidence that the seller made misrepresentations or concealed relevant information from you.  Even the seller of an “as is” home may be held liable for misrepresentation or concealment.

Here is an article from the Wisconsin Real Estate Magazine from June 3, 2011

“Uncovering the Truth: As-is Transactions”

An “as-is” clause may be used in the offer to purchase for any type of property. The reason why a seller may choose to use this type of clause may vary from financial constraints on the seller’s ability to commit any more funds to repairs, to environmental or other problems the seller does not want to confront, to an elderly person who is physically or mentally unable to deal with the situation. In other words, there are no limits on who may use an “as-is” clause or on the type of property that may be involved.

Generally, an “as-is” clause means that the seller (1) will not complete a Real Estate Condition Report (RECR) or other seller condition reports, leaving the buyer primarily responsible for determining the condition of the property being purchased, and (2) will not repair the property or “cure any defects.” Typically an “as-is” clause also alerts the buyer that he or she is responsible to determine the condition of the property being purchased.

The folklore of “as-is” urban legends are plentiful. However, the widespread tales, or a derivative there of, fit into one of the following five urban legends.

URBAN LEGEND # 1: A Seller Selling a Home “As-is” is Not Required to Make Any Disclosures

The Truth:
While the seller may believe deciding to sell “as-is” is as easy as playing the game Monopoly®, the use of an “as-is” clause is not necessarily a seller’s “Get Out of Jail Free Card.” The seller may still need to make some disclosures about the property.

  1. Seller cannot create risk: The seller has the duty to exercise ordinary care in refraining from any act which would cause foreseeable harm to another or create an unreasonable risk to others.
  2. Seller cannot conceal or prevent discovery of defects: the seller may be liable for misrepresentation if he or she actively conceals a defect or prevents a buyer from investigating the property and discovering the defect.
  3. Seller cannot make false affirmative representations: the seller may be liable if he or she makes false affirmative statements about the property.
  4. Seller must disclose defects that are difficult to discover: the seller may be liable in an “as-is” situation if he or she fails to disclose material conditions which the buyer is in a poor position to discover.

Thus the use of an “as-is” clause is not always going to be an escape for the seller from all disclosures.

URBAN LEGEND # 2: When Listing an “As-is” Property a Listing Agent is Not Required to Make Disclosures

The Truth:  The fact the seller is choosing to sell “as-is” does not eliminate the listing agent’s duty to disclose. Wis. Admin. Code § RL 24.07 requires licensees to disclose potential material adverse facts to the parties in writing and in a timely manner. In fact, where the buyer is purchasing “as-is” it is very important for the buyer to know the condition of the property. Generally, the buyer has professionals inspect the property as a condition of the offer to purchase, but this does not excuse the agent from his or her duty to assure that all known and information suggesting material adverse facts are disclosed in writing to the buyer.

URBAN LEGEND # 3: The Listing Agent is Not Required to Inspect the “As-is” Property

The Truth: 
License law requires all licensees to inspect the property by performing reasonably competent and diligent property inspections; regardless of the type of property or if it’s being sold “as-is.” § RL 24.07(1)(b) requires listing brokers to inspect the property prior to executing the listing and make inquiries of the seller on the condition of the structure, mechanical systems and other relevant aspects of the property as applicable.

The rule also states licensees shall ask the seller provide written responses to the licensee’s inquiry. Generally, this response takes the form of a RECR or a seller disclosure report. However, when a seller refuses to complete a report and sell “as is,” best practice for the listing broker would be to obtain written evidence that the licensee asked about the condition of the property and the seller refused to answer. The WRA Seller’s Refusal to Complete Condition Report form (SRR) could serve as that written evidence.

URBAN LEGEND # 4: A Seller of a Pre-1978 “As-Is” Property is Exempt From the Lead Based Paint Disclosures

The Truth: 
Lead-based paint (LBP) disclosure requirements are not waived with an “as-is” sale. Licensees are required to assure lead based paint disclosures are properly made. As of December 6, 1996, no offers on residential housing built prior to 1978 can be accepted without the LBP disclosure.

This disclosure requirement is independent of the RECR law. The penalties for noncompliance with the LBP law are federal and apply not only to the seller, but also to the real estate agents involved in the transaction who must ensure compliance.

URBAN LEGEND # 5: If a buyer is writing an offer on an “as-is” property, the buyer is prohibited from writing an offer contingent on a home inspection contingency.

The Truth:

While it is common for an “as-is” seller to counter out an inspection, the buyer is not prohibited from including an inspection contingency in the offer. If the buyer did not include this contingency, then the buyer would be buying the property “as-is.” An inspection contingency would generally give the buyer the option to back out of the offer if the defects were so bad that the buyer no longer wanted the property.

“As-is” language does not prevent inspection contingencies. It simply means that if the buyer goes through to closing, and defects are later found, they cannot go back to the seller for any compensation. The buyer is solely responsible for determining whether the property is in acceptable condition.

So how do you avoid getting slapped in the face by your state’s disclosure laws? Get a home inspection done before you list your house. The typical cost of a home inspection is around $200–400.3 That’s a small price to pay compared to losing a deal or getting sued for not disclosing a serious defect.

On a brighter note, providing potential buyers with a full disclosure report based on a professional home inspection proves you have nothing to hide, which could help you sell your home faster.

Here are a few examples of problems you might have to disclose to potential buyers:

Foundation damage

Plumbing problems

Electrical issues

Water intrusion

Mold

Remember, your real estate agent will be able to shed some light on your state’s disclosure laws so you’re not left in the dark, trying to guess what potential buyers legally need to know.

For more information please go to www.tristateinspections.com

Feel Free to Contact Tri-State Home Inspections LLC at

608-620-5320 / 563-380-2515 or tristate.org@gmail.com

Is PEX Waterline Always Okay, No It’s Not

PEX is a medium or high-density cross-linked polyethylene tubing used extensively to distribute water through homes.

Up to the 1960’s galvanized piping was used in homes and is very common to find yet today. Galvanized lines replaced lead water lines. After decades of exposure to water have caused galvanized pipes to corrode and rust on the inside. Many of these systems are outdated and in need or replacement.

From the 1960’ though 1980’s, copper tubing was the primary material for piping, but was a costly piping material. Copper is not only expensive but using a torch to solder every joint also makes it costly to install.

Through the mid-90’s, builders had a troubled relationship with polybutylene and CPVC water lines before switching in earnest to PEX.  PEX relatively easy to install and, for the most part, a robust material.

Compared to copper, PEX

·      resists scale build-up.

·      is more resistant to freeze.

·      does not pit or corrode when exposed to acidic water.

·      does not as readily transfer heat.

·      distributes water more quietly virtually eliminating “water hammer” noise.

PROBLEM WITH THE FITTINGS

F the most part PEX tubing is often joined together with brass fittings, which can de-zincify. It is believed hard water (water having high levels of carbonates, oxygen, chlorine or fluorine) leaches zinc from the fitting, leaving it porous and prone to failure. The leached zinc oxide also builds up inside the fittings and tubing, causing clogs and reducing water pressure at the faucets.

There are two types of brass found in residential water fittings:

  • Yellow brass, which is 35% zinc
  • Red brass, which has less than 15%.

Yellow brass is more prone to failure due to dezincification and three manufacturers have experienced problems.  

  • Zurn Industries used yellow brass from 1996 until 2010 to manufacture their “QPex” brand fittings. A US class action lawsuit alleging excessive failure was brought against Zurn who settled without admitting there was a defect.
    • Click here for more information regarding the Zurn lawsuit.
  • Kitec is another brand of plumbing system that was the subject of a class action suit in Nevada due to fitting failures. Manufactured by a Canadian corporation named IPEX, it sold in the United States until 2007. The Kitec system usually is made up of blue and orange tubing.
  • NIBCO also experienced problems with its yellow brass fittings. The October 2018 settlement referenced below also covers failures of their fittings manufactured until 2012.

TUBING PROBLEMS ALSO

At the end of October 2018, NIBCO INC reached a settlement to resolve issues related to its NEXT-Pure and DURA-PEX brand tubing that was manufactured until 2012. The NIBCO tubing can sometimes split and leak into wall cavities causing damage that is not visible until it has soaked through drywall or other building materials. The Settlement Class includes all persons that own or have owned a home that contains or contained NIBCO’s Tubing since January 1, 2005. The compensation is limited to those who have paid to repair “qualifying” leaks and covers only a portion of the cost to completely re-plumb a home that has experienced three or more separate “qualifying” leaks.

Click here for more information regarding the NIBCO lawsuit.

WHAT ABOUT TODAY?

To avoid the problem of dezincification, most PEX companies today use a resistant brass or PPSU (plastic) fitting.  NIBCO has not manufactured the 1006 type tubing since 2012 and I’m not aware of issues with other PEX tubing manufacturers.

WHAT’S THE BOTTOM LINE

No, PEX is not a cause for widespread panic – it requires routine inspection for signs of potential failure. Things to lookout for are corrosion and leaking, especially if the fittings are brass and have the QPEX or NIBCO brand. Refer your concerns to a licensed plumbing contractor. It can be difficult to identify, but installations of tubing labeled DURA-PEX, NEXT-Pure or CPI should be noted.

The information provided here is based on extensive research, but I am an inspector – not a licensed plumber. Always consult a licensed plumber regarding a particular installation.

Thinking of Skipping or Convinced Not to Do a Home Inspection?

Here is why that is a bad idea!

Buying a home can be a stressful process, and most likely the most important financial decision you will ever make.  Many first-time buyers do not realize that there are some crucial steps in home buying such as arranging for a home inspection. Maybe people also wonder, “do I need a home inspection or not?” A home inspection can provide the ounce of prevention to help you feel more secure in your new home and alleviate some of the stress of a first-time purchase.

On the other end of the spectrum, I hear stories of buyers that skip their home inspection as a negotiation tactic. Forgoing your inspection contingency can sweeten your offer in a competitive seller’s market.

Skipping your home inspection is an extremely risky thing to do. Only two parties will benefit from this the homeowner and the real estate professionals.

If you are thinking of skipping a home inspection, here is why you should not:

Gain a deep understanding of the home.

  • Every home is different. Pick two homes built in the exact same year in the same neighborhood, and I could give you a laundry list of differences between the two. This is especially true with older homes. Additions, renovations, and upgrades can change a home drastically. Because of this, you need an expert. Someone that has seen thousands of homes and has diagnosed the systems of each.
  • A home inspection gives a top to bottom overview of a home, its condition, its systems, its hidden flaws. TSI home inspections do not just highlights the bad news but lets you know the true condition of the home, good or bad. The home inspection gives you, the buyer, a deep understanding of the home. You can take this information and use it however you need.

A benefit to you before and after negotiation.

  • When buying a home, the number one reason to get a home inspection is to understand the condition of the home and to help negotiate problems found during the inspection. When you get the report, you and your realtor can put together your objections in hopes the seller will address them or price them into the sale.
  • However, a lot of items found in a home inspection report are current or preventative maintenance items. These smaller defects might not be worth asking the seller to fix, but it is great to have a punch list or a honey-do list for when you move-in.
  • This will help keep your home in great condition and prevent future issues.

Skipping a home inspection because of the seller.

  • A seller may “encourage” a buyer to waive the inspection or they’ll say the house is being sold “as is”. Even if the house is sold “as is,” you may be able to negotiate in a health and safety item that comes up during the inspection or learn that it may best to walk away and find another home.
  • Sellers are typically more prone to negotiation if a big health and safety item is found. This is because if you decide to walk away from the deal, they now are obligated to disclose these issues to the next buyer.
  • In rare cases, a seller may be trying to hide something in the home by selling the property as is as well. This is a very bad idea as a seller and can put them in a tough legal situation in the future. However, it still happens occasionally and as a buyer you do not want to get caught in the middle. A home inspection can help dig out these cover-ups and avoid them or mitigate the situation.

To be there… or not to be there

  • Whether or not you are available to be in the home at the time of inspection, be sure to read the reports in detail, to identify if any follow up is needed. A thorough home inspection can uncover information that can protect you in the short and long run. I always encourage our clients to attend if possible or at least come for a first-hand summary.
  • Even if you are not on the hip of the inspector during the inspection, this gives you time to walk the property yourself. I always thought it was crazy that people make one of the biggest purchase decisions of their lives, but only get to see the property for 15 mins during the showing.
  • The inspection gives you a 2-3 of hours to measure rooms, envision different furniture setups, and plan out any immediate remodel projects. You can make great use of the time!
  • Most inspectors will tell you that they perform a higher quality service when you are not following there every step, but this is a great time to voice your concerns to the inspector, so they are aware. It is also recommended you have your inspector show you your main emergency shut offs. These are documented in my reports but seeing them in person is beneficial.

As you can imagine, I do not recommend skipping a home inspection.

Obviously, Tri-State Home Inspections LLC, I advise people to not skip their home inspection. But I only say that because I truly believe in the value I am providing to future homeowners. My mission since the company was started was to help families live in safe, healthy, and comfortable homes, and I believe our home inspections help complete that mission.

Tri-State Home Inspections LLC recommends you use an InterNACHI or ASHI certified home inspector. Iowa and Minnesota do not require a state certification to become a home inspector.  Wisconsin requires licensing (I am a licensed Home Inspector 2402-106)  that meets the minimum requirement for the state

Using an ASHI certified inspector ensures your inspector has passed the national home inspection exam, has performed at least 250 inspections, and more. As of 2021 I have done over 5000 inspections. InterNACHI requires a certification process and 24 hours of education a year, more then ASHI or Wisconsin 20 hours.

At Tri-State Home Inspection LLC, I am licensed, InterNACHI and ASHI certified

If I have talked you out of SKIPPING your home inspection, then you can click here to get more information on Tri-State Home Inspections LLC