Using a Contractor to do Inspection

10 Replies

What are the thoughts on using the contractor you plan to hire to do the initial inspection on a house you plan to flip. 

Sounds like a great idea to me if you can get that contractor to do it for free or for a small fee.

If you are just looking for a rough estimate of cost the contractor will be fine.

If you want an actual inspection, hire an inspector. They will document and note EVERY LITTLE THING. and they have E&O insurance (or something like that ) just in case something catastrophic is missed.

If your contractor missed a foundation issue that’s going to cost $50k to fix, your contractor will be excitedly awaiting the check you’re about to write him or her.

If an inspector misses that, they could be writing you a check instead.

Originally posted by @Lauren B. :

they have E&O insurance (or something like that ) just in case something catastrophic is missed.

I would make sure to check this with the inspector before hand. I don't know if certain states require it, but I've seen a ton of inspectors that don't make that guarantee and it's expressly written in the inspection. Get it in writing, at least via email, BEFORE you have the inspection done. 

An example is my current residence. I always thought it was a normal thing. I asked if he was insured and he showed the evidence of it. Therefore, I assumed his inspection were insured for that. He completed the inspection, I paid for it, and went through all of the findings (I was out of state at the time). 

After receiving the inspection, the report was littered with "I do not guarantee or warrant....blah blah.... but upon inspection noticed X and Y" When I say littered, I mean every section of the house. 
"I do not guarantee or warrant the roof, but here's what I found"
"I do not guarantee or warrant the living room, but here's what I found"
So on and so forth.

Thanks for the comments so far.  Good points.

@Lauren B. have you ever seen an inspector or his insurance writing checks for anything they missed? Every home inspection I have seen has enough verbiage to cover them from "missing" items. If they miss a $50k foundation issue, good luck getting anything from them or their insurance. Their report and the paperwork you sign will absolve them from being held responsible.

I will also say that home inspectors don't give you every little detail of the house that needs to be repaired (like you need for a flip). On any house I have had inspected, they missed a bunch of things that I found after moving in. Not to mention inspectors usually won't go into details on mechanicals, structural, etc, they will refer you to specialists (which would cost even more money).

It is hard to give advice on who to bring with you for potential deals you don't own. Contractors/inspectors will want to be paid. Unless your area is better than mine you will probably look at 50+ houses before landing a deal. Would you ask the contractor to come to each? Would you pay for 50 home inspections?

Inspectors don’t literally write checks. Their insurance companies do.  I’m not saying they hand them out like candy, but that is their job. Just because they say they don’t warrant it, doesn’t mean that in all states that will hold up in a court of law. A Google search will give you plenty of examples. 

The Op asked about hiring an inspector or contractor for a house “he plans to flip”. 

I wasn’t under the impression he was asking about if he should drag a contractor or inspector to 50 properties.  At some point, the investor needs to be able to evaluate properties  on their own and rely on a professional opinion when they feel good about a property.  

It’s my opinion that an inspector will be more thorough and has more at risk to be thorough. It costs more; so that’s a personal decision each individual needs to make. Ideally I would have an inspector for each deal. Realistically that is sometimes not possible. If my margins were thin, I would do both. If I knew the contractor intimately and trusted him 100% I’d be more inclined to forego inspection. If I found the dude on CL and never worked with him before, I wouldn’t even bother.  It’s not a one size fits all solution. 

For Me personally - I have enough room so that any issues or surprises won't kill my deal. I'm not always hiring an inspector before I buy , due to time constraints and some sellers not being so cooperative. My current project was a distressed property and I didn't even have a contract and scheduled closing anyway because she was about to lose her house. I didn't even know til the night before if she would show up for closing. (Closed in 6 days). Getting her to allow an inspector or contractor would have been impossible. I got the house for 30% of ARV so I have some room for the unexpected.

I will pay for an inspector anyway before listing so I am aware of what might come up and so deals don’t fall through when under contract. May as well do it before and just pay for a follow up. Just my $.02. 

two different inspections, 2 different goals.

If you want someone to walk it, and tell you where you have sagging, which windows are shot, find dry rot, etc... AND give you a $... get your contractor.

If you want someone to go under the house, in the attic, look for shoddy construction, code violations etc.... get an inspector...

I have been using a 10 day inspection period on offers but haven’t had an offer accepted yet. Just wondered how I would inspect if I get a bite.  I’m fairly handy but don’t know these older houses 50s and 40s.  Want my first few to not be my last so trying to go conservative until I can learn from the results.  Think I’ll try using both and try and keep my contractor happy by giving him work if the deal goes down.  I haven’t called the guy until I get an accepted offer.  10 days can go quick though. 

Its a terrible idea to have a contractor inspect a home for purchase. I can guarantee you that the contractor will find tons of issues to require fixing, especially if you are going to use that contractor. A contractor wants to earn money, that will be accomplished by fixing those repairs. Spend the money and get a independent evaluation of the home. It will be worth it.

If the house is a deal , you have to go in all cash , as is ,where is ,how is . Or the next person will . 

I just stopped by a house for sale and looked from the outside . They wanted $140 K for a 2/1 . ( cheap in my area)  Another guy was there and we talked a while ,  he was interested , I wasnt . He asked why . Well in 15 minutes , I showed him the roof , lack of front porch , outdoor unit for hvac gone , windows shot , septic overflowing . Location of well making it difficult for new septic ( need to be 100 ft away ) Looked in the windows , warped floor , no kitchen , trash all over the place .  Done the house would be worth $210 K at best .  Repairs were $50 K on the cheap side ( septic would be $15K ) Thats without looking at the inside , just what was  obvious .

I gave him my card , and told him if he needs a contractor , I will gladly take his money .  He laughed and asked me if I ate lunch yet . We went to lunch , he picked up the bill and told me that I saved him a lot of money  he was going to buy it . I had to tell him as crazy as it is around here some one will pay full asking on it . 

I am a contractor , when I look at a house I dont look at the little things , they are easily overcome , I just look at the expensive  $$$$$$$ stuff . This is just to bring it up to builder grade , not flip grade . 

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