Home inspection protects the buyer

Question: We are purchasing a home and it has turned into a major nightmare. Our real estate agent is brand new and inexperienced, and we signed the papers without reading them well enough.

The most recent problem is that we found water under the house.

Do you have any recommendations for people who know a lot about the problem of water under the house, “French drains,” etc.

Is it common for the appraiser on a conventional loan (sent by the mortgage company) to check underneath a three-year old home for water? And if water is found under the house, would they then order a structural inspection?

Answer: The “Uniform Residential Appraisal Report” used on all conventional mortgages requires the appraiser to comment on any “Dampness, settlement or infestation” in the crawl space under the home. So the appraiser might check under the house for water, but it’s not up to the appraiser to order a structural inspection.

However, if the underwriter for the mortgage lender sees a comment about dampness or water in the crawl space on the appraisal report, they will typically call for a structural inspection to make sure there is no damage to the house. Water is one of the prime causes of structural damage in a home. It causes wood to rot and dampness provides a rich breeding ground for wood-destroying insects. A professional building inspector will look for both of these problems and recommend treatments, corrections and repairs if necessary.

You mentioned a “French drain” in you letter, which is an underground drainage system consisting of a perforated pipe buried in gravel-filled ditch to divert ground water away from the house. The problem would have to be pretty severe to require of a French drain. Sometimes the solution is much simpler, such as cleaning out the downspouts and diverting their output away from the house.

I recommend hiring a professional building inspector to examine the crawl space and recommend a solution. Do some research online and talk to a few of the building inspectors who work in your area. Ask if they are familiar with French drains and water in crawl spaces.

If the water problem was noted on the appraisal report and an inspection required by the mortgage recommended any repairs, then those repairs would have to be completed before you could close the loan. That’s primarily to protect the lender’s interest in the house as collateral for the loan, but it is for your benefit as well.

Once the water problem is solved, the appraiser would have to return to confirm that the problem is fixed and the crawl space is dry. Appraisers typically charge up to $100 for a re-inspection report.

Your situation once again emphasizes the importance of hiring a professional home inspector as a condition of your offer. Home buyers should always make their purchase offers contingent upon satisfactory review and approval of a structural inspection report. That way, when a problem is discovered, it’s up to the sellers to correct the problem or lose the sale.

If you had an inspection contingency written into your purchase offer and you found that the water under the house was a serious problem, you could back out of the purchased contract and get a full refund of your earnest money. But without an inspection contingency in the contract, you could lose your earnest money if you chose to walk away from the house.

Email Steve Tytler at business@heraldnet.com.