Property Condition

 

A systematic physical inspection of the home is a routine aspect of the home buying process in our market. The right to this inspection is outlined in Section 10 of the standard Colorado purchase contract and it is rarely waived. Inspections can be performed by the home buyer or by anyone the home buyer selects, but generally the inspection is performed by a professional home inspector hired by the home buyer.

The Home Inspection

Using a professional home inspector is important. Good home inspectors not only know a great deal about how houses are built and how they function, but they understand how houses age and sustain damage over time. They are familiar with the impact of water and soils on foundations and siding. They have seen how furnaces are damaged by leaking humidifiers, air conditioners, and flues. And they have experience with the often bizarre, and occasionally dangerous, things that homeowners do in the process of repairing, upgrading and remodeling their homes.

There is nothing wrong with having your uncle-the-contractor take a look at the home, but don’t use your uncle as a substitute for a professional inspector. It also may not be a bad idea to hire an electrician, plumber, structural engineer or heating contractor to look at the systems they specialize in, but don’t use this as a substitute for a general inspector who will look at how all these systems work together.

You need to be aware of two things when selecting and working with an inspector. First, there are no licensing or training requirements for inspectors in Colorado. Anyone can run an ad in the yellow pages and immediately become a “home inspector.” There are national associations and national franchises that may guarantee some basic level of competence from their members, but referrals from people in the industry are probably the best means of assuring you are working with a good inspector. However, you also need to be aware that inspectors are in a very difficult position within the industry. Most receive the bulk of their business through referrals from real estate agents, agents who only get paid when home sales close. While most inspectors do a good job of representing the interests of the buyer, the pressures and potential conflicts of interest are real.

My recommendation is to hire an inspector who has extensive experience in the inspection business and who will spend 2 to 4 hours in the home. This will cost between $200 and $300. I also think you’re better off if you talk with the inspector about the results of the inspection without the seller or any real estate agents present. Both you and the inspector may feel more comfortable to speak openly under these circumstances.

Homeowner Projects and Building Permits

Homes with extensive additions, remodels and upgrades often stand out from their peers as potential good buys, but they also pose a potential risk to the home buyer. A finished basement may look great, but if the homeowner or handyman built the walls like they do in most other areas of the country, the expansive soils we have in this area could cause extensive damage to the home. If they did the wiring improperly, you could be electrocuted or the house could burn.

A good inspector should be able to identify most hazards that the remodeling owner has built into the home, but it is also a good idea to check with the local building department to see if the owner obtained building permits for any work that’s been done. The inspections performed by the building department during construction provide some assurance that the work was done properly.

Utilities

It is important to know that the utility costs for the home are not excessive. In our area, for example, electric heat is much more expensive than gas. Consequently, a home with electric heat may be more difficult to sell. Generally, it is easy to obtain objective information on these costs by calling the local utility company and giving them the address of the home you are interested in. Keep in mind, however, that utility costs can vary dramatically depending on living habits. Cautious buyers may want to obtain information on several similar homes in the same neighborhood to get a better picture of what the utility costs in their target home are likely to run.

Termites and Other Pests

Pest inspections are routine in many states, but they are not in our market. You will hear that we don’t have termites in Colorado, but that is not the case. Primarily because of the dry conditions in the region, termite infestations do not spread easily through neighborhoods, but there are homes with serious termite problems. We also have other pests such as carpenter ants. Most people rely on their general inspector to flag potential problems and then follow up with a professional pest inspection. However, since pest control companies will do inspections for little or no money, there is no reason not to have such an inspection done if you have any concern.

Soils

Soils with high concentrations of expansive clay are common in many parts of the Boulder County and Denver Metro real estate markets. When wet, the clay in these soils can swell to several times their normal volume, creating forces that can easily lift the concrete slabs in driveways and basement floors several inches. In extreme cases, these forces can result in extensive damage to foundations and structures, pushing a foundation wall inward a foot or more.

Builders are now required to test for expansive soils and a wide range of construction practices are used to mitigate the potential effects of expansive soils. Many experts contend that the impact of expansive soils on most homes will have already manifested themselves on homes more than three to five years old. Experienced inspectors are well versed in looking for signs of such damage. An important caveat, however: If you or your neighbors do anything to change the landscaping, or otherwise cause more water to accumulate near the home, you may create new problems. With new homes, you should try to obtain a copy of the builder’s soils report and verify that the builder has followed the engineer’s recommendations on construction practices. Be very cautious if you are considering finishing a basement in a new home, since movement of the basement slabs could be extremely costly. The Colorado Geological Survey (303-866-2611) has several useful publications on expansive soils and construction practices.

Water Wells

Stated simply, you should not consider purchasing a home that is dependent on a private water well without paying a professional to test the productivity of the well. The “livability” and the resale value of the home are absolutely dependent on an adequate water supply. Re-drilling a well, or otherwise improving well productivity, can be a very expensive proposition.

Well tests are a routine part of the purchase process in mountain and rural areas. Ideally, a well test should provide information on the storage capacity of the well, how rapidly water flows into the well once it is drained, and the rate at which water is delivered to the home by the well pump and the piping system. The storage capacity of the well is a critical but often overlooked issue in evaluating a well. If a well is 400 feet deep and water fills the well column to within 50 feet of the surface, the well may contain enough water in storage to provide for a family’s needs for a day. If water flows into this well at the rate of a half-gallon a minute, it may provide plenty of water. In contrast, water flowing into a 50 foot well at the rate of 3 gallons a minute may not provide adequate water if you run the shower and the dishwasher at the same time.

The major difficulty in testing a well in connection with a home purchase arises from the variability of well productivity depending on the weather and time of year. A well that is providing plenty of water during the rains of May could be dry as a bone during an August drought. Records from previous well tests that the seller may have on file, or records from the initial licensing and permitting for the well, can provide useful supplementary information.

Be forewarned that many wells in the Front Range are permitted only for water usage within the house. The property owner cannot use well water for lawns, gardens, or livestock. Call the Water Resources Ground Water Information desk for information on permits (303-866-3587).

Septic Systems

Septic systems are as important as wells and they too can be very expensive to repair or replace. A septic inspection should tell you whether the system is the appropriate size for the home, whether the tank and other components seem to be in good condition, and whether the system seems to be functioning properly. The answers to the first two questions should be relatively straightforward, though there are components of the system that simply are not accessible to any inspector. It can be much more difficult to tell whether a system is functioning properly unless the malfunction is serious. It may be impossible to say whether a system that is working fine for the couple currently living in the home will continue to function adequately once you move in with your family of six.

The Grounds

In addition to the home and the other physical “improvements” on the property (e.g., garages, outbuildings, or fences), you need to consider the land and the vegetation that you are buying as well. In urban subdivisions, you should try to be sure that trees and plants are in good shape. Removing a mature oak or cottonwood that has died could cost several thousand dollars, while replacing midsize trees and shrubs could cost hundreds. On larger rural and mountain properties, you should look for dump sites that could contain hazardous substances or for mine shafts that could create safety and liability issues.