What you need to know about home inspections and pest inspections

Raziel Ungar

Raziel Ungar

January 10th, 2023 - 12 min read

In this video

What is required at the minimum for an "as-is" sale in California
What will happen if as a seller you choose not to do inspections up front and how that could affect your pocketbook
The benefits of getting your inspections going before going on the market
What sellers should do about more concerning issues
What the home inspector looks at during the inspection
The five most common systems to pay attention to in the home inspection
Minimizing surprises for buyers - communication and transparency is key
How to approach inspections in the purchase contract
Pest inspections - who can perform them, and the three types of things inspectors look for, plus Section 1 and Section 2 items (termites, fungus, dry rot, etc)
Asbestos issues
Foundation or settlement issues
Why reading the disclosure package in advance of viewing the home is smart, and what most buyers do but shouldn't
Confusion about property lines and boundaries

Whether you're a buyer or a seller, or just want to know more about how to best understand the condition of your home, I hope you find this conversation educational and informative. For a deeper dive into everything inspections, including required disclosures about the property from the buyer and seller’s experience, please visit our comprehensive Due Diligence: All About The Disclosure Package. If you're thinking about buying or selling real estate in San Mateo County, or need a referral, I'd love to connect.

This video is an overview of the most important things you should know about before doing a home or pest inspection. Having represented hundreds of nice families, couples, individuals, and estates over the years, my goal is to de-mystify the inspection process so it all makes sense and doesn't feel overwhelming.

Hi everyone. Welcome to Raziel TV. Today we're going to talk a little bit about the inspection process, and things that I've learned throughout my career representing hundreds of nice people like you who buy and sell throughout San Mateo County. So what is typical in a transaction, at least in the San Francisco Peninsula, and pretty much throughout Northern California would be my understanding. It's very standard practice that the seller will obtain a home and pest inspection prior to putting their home on the market.

They're not required though, many people think they're required. What is required by California law, whether it's an as-is sale or not, and almost everything is as-is because the default contract that we all use is from the California Association of Realtors, and that's an as-is contract. So what is typically required by California law is that there needs to be smoke detectors and carbon monoxide detectors in the appropriate places throughout the house, and the hot water heater needs to be braced and strapped, and if it's in the garage, it needs to be at least 18 inches off the ground.

However, it does make sense, and it's very common for sellers to get a home and pest inspection in advance. Why is that? You might say, "Well, I've lived in my home for 10 years, 20 years. I already know when I had a leaky roof. I know when my faucet leaked. I know that I have some settlement in the guest bedroom in the house. I know that the train is a block or two from my house and I can hear it at these three times a day. I know about the dog that barks."

So you already know all these disclosure items that you're required by law to disclose to the buyers. However, there might be things that you don't know that you would want to be aware of ahead of time. What's standard practice in most of the country -- and I hear this because I have of clients who I've represented here who have gone to buy in Wisconsin or Florida or places in the Midwest, the Pacific Northwest -- is that the buyer will get the seller's disclosures in advance about the history of the house, but no inspection reports, and then the buyer will go write the offer.

The buyer and seller will agree on a price, let's say $500,000. And then the buyer will bring in their inspectors and their inspectors will typically be a home inspector, could be a pest inspector, could be an engineer, kind of whoever they want, could be a roof inspector, and then they'll find out X, Y, and Z issues with the new home that they're in contract to buy. And then they'll go back to the seller and they'll say, "Hey, I just learned X, Y, Z things. Honestly, I didn't know these prior to going into the negotiations and agreeing on the price. I would like for you to pay for all of these items. I'd like for you to pay for the new furnace, the new roof. I didn't realize it was in such poor condition."

And then you have this back and forth. The seller could say, "Yep, we didn't know that, we agree with you. We're going to give you that money." Or they could say, "Sorry, we're not going to give you anything." Or maybe there's a back-and-forth. And in my view, that's kind of awkward and difficult because you're already trying to make plans with your moving truck. Maybe you've given your 30-day notice. That can be a little bit more stressful.

What I like about real estate in the Bay Area is typically the summer will obtain the home inspection, and the pest inspection in advance of going on the market. And then it's really nice because then we can review them. We can say, "Okay, we see X, Y, and Z issues. None of them are showstoppers, none of them are crazy, but we've now learned about them." Then we can go ask the handyman to take care of those items prior to going to market.

Or maybe we just disclose them. I have many clients I've represented who it's a trust sale and this was their parents' home and they've inherited the home, and maybe there's some deferred maintenance on the home. And they're like, "You know what? We're going to leave these issues to the next buyer and we want them to take care of them if they so choose to. We're just going to be honest about the condition of what we know and put it out there for the buyer to address if and when they choose."

But it's still helpful that we know about that. The other benefit of knowing about the condition in advance is from a pricing perspective, we can kind of take all this in consideration. So as an agent, I represent dozens and dozens of buyers and sellers throughout the year. I see hundreds of homes. There's kind of a knowledge base that a competent realtor will have where they can kind of advise the seller from their whole history of transactions that they've done.

And so since I've been doing this a while, typically we'll share with my sellers, "Hey, based on what I've seen, we can just kind of disclose that," or, "I think a buyer's probably going to have an issue with that. We should address it." So for example, I recently represented the seller of a home where the foundation in a backroom that had been added onto at one point with a permit had dropped about four inches.

Obviously, that's very substantial and that would for sure be cause for concern for the buyers. So prior to my sellers engaging me, they had obtained inspection reports from several different contractors. They had an engineering inspection. So I reviewed all those. I said, "Okay, this is really good. However, we have prices that are across the board. We need to contextualize this for the buyer."

So we ended up bringing in a civil and structural engineer who is also a structural steel specialist. We had him review all the reports and even the soils report that had been done 15 years prior or so. And then he wrote up his report with his determination. And so I can't comment what's right or wrong, but I can say the goal here is to try to give the buyer a complete picture of what they're buying, right? We're not pretending that this issue doesn't exist. We're being very open about it.

We ended up on that home having several offers and it sold way over asking. I think part of it was because my sellers were so transparent with what the condition was of the home. So the idea is, again, that we disclose everything in advance. We get the home inspection done, we get the termite inspection done. The home inspection, what's included in that? The home inspector will crawl under the house, they'll go through every room in the house, they'll turn on all the appliances. Typically, they'll go on the roof. Most will do that.

And they're giving a general, you could say, synopsis of what they're seeing. And their report will typically be anywhere from 15 or 30 pages. A stronger home inspection report will include photos describing the issue. A weaker home inspection report, which I do see 10 to 20% of the time, they might say there's some cracks in the foundation. Now that doesn't mean that there's a major issue with the foundation, but cracks in the foundation is naturally something we need to be very concerned about.

A not-great home inspection will just say, "There's a bunch of cracks in the foundation. Buyers should investigate further." A helpful inspection will have photos of all the different cracks. It'll talk about the width of the crack, whether they think that this is an issue or not. And then the buyer can make a further determination. And then as a buyer's agent, then I'll say to my buyers, "Look, this is really helpful, but we need to learn more. Maybe we should bring in an engineer to look at this."

So that's the idea with these reports. The home inspection is more of a general inspection. It's enough for many people. However, we definitely don't want to leave anything uncovered. So the five main systems of the home that a home inspection should cover would be the roof, the plumbing, the foundation, electrical, and the HVAC system. HVAC is H-V-A-C. It stands a heating, ventilation, and air conditioning.

If you have radiant heat, that would be a separate inspection. I have radiant heat in my house and it's fantastic, although it's not very common. So those are the five main systems of the home that we really want to look for if you're a seller to understand those. A lot of times we'll see insulation under the house installed upside down. We could see frequent issues with hot water heaters. I feel like most of the time when we represent our sellers from the beginning to the end of the process, there's usually one thing that pops up that we need to address either before we go on the market or once we're on the market.

I had a listing last year where my clients had moved out of state, and while the home was on the market, a buyer's agent called me and said, "Hey, it looks like there's some water pooling in the kitchen on the floor". We're all surprised to see this. We went over immediately and it turns out that the dishwasher had been turned on by someone maybe who was in the house previously, and that there was a leak in the outside of the dishwasher. We ended up getting it fixed. It was $500 or $600 and we disclosed it and it was a non-issue.

So things pop up. These are normal and it's just all about being communicative, being transparent, being open with everybody so that way there's no surprises because the S word is surprise, and that's the goal is to minimize surprises as much as possible. Now let's look at this from the perspective of the buyer.

If you're the buyer, you want to be really looking closely at all these systems of the home, and you have the right in the purchase contract to write a contingency for doing further inspections. So if you find that what the seller has provided is either not adequate or you're concerned about it or you might not trust it, you're going to want to get a second inspection. We always recommend that you get as many inspections as you want from anyone who you wish to feel comfortable about the condition of the home.

The disclosures that you'll see and that you'll sign as part of the buying process, I'll recommend that you have a contingency period in place so that you can get further inspections and do any type of due diligence that you wish to do. Now, if we go back to the pest inspection for a second since I only talked about the home inspection, the pest inspection is something that it's going to cover several things, termites, dry rot, fungus, beetles, all those kind of gross things.

They're super important. They're conducted by someone who's licensed by the California Structural Pest Control Board. So whereas home inspectors, anyone can claim to be a home inspector. However, the most reputable ones are members of the American Society of Home inspectors, and there's a couple other accreditation agencies. To be a pest inspector though, you need to go through a lot of training. You need to be licensed in the use of chemicals, and there's four or five local companies that do a lot of pest inspections in our area.

When the pest inspector comes out, they'll look for several things. They'll look for things that I already mentioned, and then they'll designate them as section one items or section two items on their report that they issue afterwards. A section one item is something that the inspector feels is like a threat to the property, meaning it's something that should be taken care of right away. It's an active infestation, it's an active issue. There could be some dry rot in the bathroom that if you walked on the floor, maybe the floor could collapse, for anything serious like that.

A section two item is something that you really ought to keep your eye on. Maybe it's not an immediate threat, but it's something that's still very important that the inspector highlighted. For example, a section two item could be they see some cellulose debris under the house. That could easily be removed. It might have been there for years, but it still should be removed. So that's their job as we call that out.

Things that they'll give estimates for are section one items. They're required, I believe, by California law to give an estimate for anything significant. So for example, I see oftentimes front steps. So if the front steps of the home, there's not a huge overhang, maybe they've been hit by rainwater for 50 plus years, and maybe you could walk on it and it feels totally fine. But then the pest inspector goes underneath the front steps and then the inspector notices that there's a lot of rot.

I had that recently at a listing a few months ago. My sellers had owned the property for 30, 40 years and they were surprised to learn this, but then when they looked under there with their eyes, they were able to see that the rot was there. So that was about a $15,000 item to redo the front steps. My sellers did not redo the front steps, but they disclosed that and it was in the pest report, and that way the buyer was totally aware of it.

Other things that the inspector will note will be termite issues. So there's a couple of different types of termites. There's subterranean termites and there's dry wood termites. The subterranean termites, they can kind of get into the house by close contact between soil and the framing or the outside structure of the house where there's kind of the stucco or siding, and then the subterranean termites can kind of burrow under and they can kind of come into the house that way. The way you can remedy that is by doing a local treatment with chemicals. Obviously, no one likes to use chemicals at their house, but that's typically the best way that you can kill them. And they'll kind of go out there and they'll spray the chemicals and hopefully that will kill it. That's the local treatment.

The other type of termites you can have would be dry wood termites, and those could be in your house unfortunately for a while before you even discover them. I've had sellers who have been in their home for a long period of time and then we do the inspection and they notice that they're dry wood termites and my seller's like my gosh I had no idea that I had termites in their home. That's never a good feeling, but it's not something that you might have been aware of on your own and that's why the inspection's really good.

So if you do have dry wood termites, the most common way that you can get rid of them is by tenting the house. So tenting it, they basically, the termite company will come in and the best time this is done is after the close of escrow. They'll put a massive tent over the house. Depending on the size of the home, it could be two, three, $4,000 and then they'll release some very strong chemicals inside the home and that'll kill all the dry wood termites.

I recently learned that an investment property that I owned had dry wood termites and I was really concerned about it, and so the home will be tented. But what the owner of the company who came out to take a look at the property for me, told me that they most likely had been there for one or two years and we just didn't know about it, and we hadn't seen them fly around or anything, so that's why we didn't know.

That kind of grossed me out hearing that they had been there for that period of time, although he let me know that it's not like they had eaten away a lot of the house. It's a very slow-moving thing. So I'm not an expert in termites, I'm not an expert in home inspections, but just wanted to share with you some things that I've kind of learned from my experience.

So some other things that you might be concerned about reading in the home inspection would be asbestos. I'm for sure not an expert in asbestos, however, I do see it often enough that have a minimal amount of experience. You can see asbestos. It's usually a white material and it was used as insulation wrapped around ductwork. It would often be in popcorn ceilings, the bumpy kind of ceilings. Asbestos could have been used in tile floors.

And so if that's a concern of yours, you can absolutely test for that in the process. It's not typically a standard inspection, but if the seller is aware that they do have asbestos in their home, they're required to disclose that. And if the home inspector sees it, then the home inspector is required to disclose that as well. If you're a buyer and you're concerned about the presence of asbestos, or maybe could there be asbestos and you don't know, you can always get a test where a company will come out and take samples.

I see this less frequently during the home-buying process, but it is something that you absolutely can do and remove it. I remember we had an experience where a family member of mine purchased a condo in San Mateo and it had popcorn ceilings, and this was a property that was 30 to 40 years old and we were able to test for asbestos and there was a low level of asbestos in the popcorn ceiling.

This was about a 1200-square-foot property. And then we had a company come out for about five, $6,000. They were able to remove all of it very safely and then were able to paint afterwards with a regular painter. So these are things that can be done. It's not a good feeling knowing this, because obviously asbestos is carcinogenic. However, it's something that you can be addressed. And my point of bringing it up here is so that you know that it's something that if it's of importance to you, that you can have it looked at.

Another thing for the home inspection that you should be aware of, and we go back to the foundation here, is if you see any sloping in the floors in the house. Obviously, you want everything to be even. On the peninsula, we see homes where there's expansive soils. Now, I'm not a soils expert, I can just share I grew up in an old home that was built in 1911 and the floors were not perfectly straight. So that's something that could bother you though, and that also might be indicative of a serious foundation issue, a serious settlement issue.

If you're on the side of a hill, that's something you'd want to look into for sure. And if you're in a flatter area, it could be an indication of liquefaction or maybe there is a foundation issue and it's something that you want to take very seriously and maybe have an engineer take a look at. Going back to the buying process though, you'll typically get the inspection in advance from the seller, the home inspection or termite inspection.

I recommend getting the disclosure package prior to seeing the house so that way before you see the house, you have a really good understanding of those five main systems, the roof, electrical, foundation, plumbing, and HVAC. And then you can review them prior to seeing the house. And that way if you go see it at the open house, you're like, "Okay, I remember that the guest bedroom said that there's some settlement. There may or may not be an issue there, but at least I can walk in and see if that's something that bothers me and then I can look into it further if I want to."

The other benefit of getting the disclosure package in advance is if you've done a really thorough job on screening for a neighborhood, then you know that this home is a really good candidate. It makes sense to go spend the 30 minutes or an hour reviewing that in advance. So if you're really thorough as a buyer, you can be a lot more efficient by only reading disclosure packages for homes that you feel, in my view, are like a candidate for purchase. So if you think it's a candidate for purchase, it absolutely makes sense to get it ahead of time.

A more conventional approach is buyers will go to the open house, and then after they see it, they reach out to their agent and request the disclosure package. And then, if the offers are being looked at the following Tuesday, Wednesday, or Thursday, it's going to feel ... really compressed.. that timeline. So that's why it's my view to try to know as much as you can about the house prior to seeing it. And then if and when you go back for a second time, you still are armed with a lot of information about the house.

I'll just chat for a second about lot boundaries. Unfortunately, it's not standard practice as part of the home purchase process that a survey is performed. However, so you'd want to go into this knowing that you don't know exactly if the fence is on the property line. I wish that if I could wave my magic wand that there'd be a drone up in the sky and it would know exactly where the boundaries of the property are and they could shoot some lasers down. You could then know exactly where the boundaries are and maybe that'll happen in near future.

As a home buyer though, you want to be okay knowing that the property line could be an inch off, it could be several feet off, it could be more than that. And if that's really important for you, then you could put a contingency in there to get a survey done. Surveys though typically can take weeks and weeks to get done.They're pretty involved. However, if that's something that's matters for you, you absolutely can get that done.

If you're planning to build a new house, you're going to need a survey. If you're planning to expand the house, the city's also going to require you to do a survey. There can be dicey issues around fences where they're not on the property line. They could be a foot onto the neighbor's property line. They could be multiple feet or inches into your property line.

Just from speaking from personal experience, I have observed many times where the lines were not where people thought they were. So if that's something that's important to you, then you would want to look into that further. The sellers typically, in my experience, unless they have an issue or they're aware of a dispute around that, many people just assume that the property line is where the fence is, but no one should ever make that assumption.

Hope you enjoyed learning a little bit more about the inspection process. I certainly enjoyed chatting about it. If there's more questions you have or things that I can expand on further, certainly let me know. You can always keep learning about the condition of your home, and so I encourage you to get whatever advice you can to feel comfortable about the condition of the home that you're buying.

Thanks for watching my video. If you'd like to stay in the know about what's happening in the real estate market in San Mateo County, or just what's going on in your local neighborhood, please consider subscribing to my channel. If you have ideas for future content that you'd enjoy, also I'd love to hear from you. Thanks.

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