Home inspector messed up, possible insurance claim?

Question

Hi everyone,

We recently went under contract for a flip and are currently going through the inspection process. The chimney/fireplace inspection came back with major issues saying that it needs to be completely torn down and replaced, and that the price tag will be $25k+. When we purchased the home (6 months ago) we had a full home inspection done by a general home inspector, and he said the fireplace/chimney was up to code and just needed some mortar patched up. This has the potential to completely derail the sale or force us to significantly drop the price, which will put us in the negative for this flip.

We are waiting for the sellers to respond, but are wondering what our options are for possibly making an insurance claim against the original home inspector. Does anyone have any experience with a similar situation or any advice you can give us?

Thanks!

Lucas

Jonathan Jewell · Answer

Does anyone else think 25k+ for a chimney is a little high? And I'm with @Nick Colamarino on this one, actually that was the first thought that ran through my head.

Let me tell you guys a real quick story.  I have ONE hvac guy that services the heaters and AC systems in my units, because he knowswhat he's doing and I trust him, so I give him tons of business..  It was 3 winters ago, and I had a failed heater.  I dropped off elec heaters and told the lady, I put a call into my guy just hang tight.  Well he was on a big commercial job that was a ways away and wasnt coming back for at least 3 days.  Unbeknownst to me the lady called around to other heater repair places to get estimates, she was old and dertermined (God rest her soul).  Run down the list of each estimate 1)blown control boardl, 2)a cracked heat exchager, 3)bad control valve, and brushes failed in blower motor.  Prices ranged from 880 to 4700.  next day, 4th day my guy was back and check the heater out.  $15.00 stuck pressure switch, he had an extra one on the truck, no charge, not even for the visit, was there less than 5 min.  Moral of the story, when got an estimate that high from one guy, give him your smelling a fart face and call someone else.

Patrick L. · Answer

Home inspectors do not guarantee anything.  Most of the agreements with them limit any liability to the cost of the inspection.  There is zero chance you'll get the inspector or their insurance to pay you a dollar of your chimney repairs.  Home inspectors generally are great at finding little things like improperly wired outlets, leaking faucets, etc.  If you want to evaluate the structure you're better off bringing a good contractor with you.

Nick C. · Answer

If home inspectors were liable for any repairs they missed, they'd all be out of a job. It's impossible to catch everything.

This is just a thought, but does the chimney inspector also fix chimneys? That could sway the results of the inspection. Admittedly I don't know anything about chimneys, but it seems if it needed completely torn out, wouldn't it look at least a little decrepit to the novice eye?

JD Martin · Answer

What you do depends on where you are in the sales process and what kind of deal you're getting. If you're getting a dream price, you should probably just give some concessions and let it go. If you're getting nailed to the cross, you should probably let the buyers walk and figure out your next move (mine would probably be tear down and patch, if the $25k+ price tag is even accurate, as fireplaces don't add that much value to a house). If you're somewhere in between, you can probably split the difference with them. Ask the brokers to come off a percent if the deal is going to die. If everyone pitches in, and there's still money on the table, you can figure out a solution.

What I would not do, under any circumstance, is agree to fix the chimney for the current buyer. Either give concessions or walk.

Account Closed · Answer

Did you have a masonry contractor inspect and give you an estimate for a new chimmney? Can you prove that this chimmney was in this exact same condition 6 months ago?

Sean Kremer · Answer

The inspector probably has a brother in the chimney business.......I make it clear that any work done will NOT be by anyone that the inspector recommends.

If it were me I'd get a third secret opinion to make sure there is nothing really wrong with it, then tell the buyers that you have already had an inspection and it was fine.  The report from the 1rst inspector should sway the buyers a little to the drama this guy may be trying to pull.

Another thing I like to do with inspectors is act like you know nothing about everything and you are ready to put all recommendations solely in their hands. Act incompetent........  See if they try to pull stuff over on you because they think you don't know much about the process.

Of course if your chimney is dangerous......you don't want to whitewash something that important.

Lucas LeBlanc · Answer

Update:

We just heard from the buyers realtor and apparently they are still willing to move forward despite the chimney issue, with the only contingency being we leave the house furnished. They apparently were very emotionally attached and the fact we had a back up offer certainly helped to force their hand a bit. I'll believe it when I see it in writing, but this is better news than we expected.

If this news is too good to be true, we will be following your suggestions of looking into the inspectors background/business, getting multiple estimates from engineers/chimney sweep companies/masonry contractors as well as come up with potential creative solutions to come to an agreement with the buyers.

If anyone wants any further details on how this turns out and the issues involved, feel free to reach out to me directly.

Thank you everyone for your input, it is greatly appreciated and helped us wrap our heads around this situation!

- Lucas

Antonio DeFlorio · Answer

$25k does seem high for a chimney. Obviously region and actual design come into play, but I've looked at many homes in northern Michigan of which most have wood burning stoves or fire places. If chimney's were $25k, that would often be 15-25% of the homes value. Not undermining what anyone has posted, but I'd be getting 3-5 opinions for a $25k expense.

Nicholas Shepard · Answer

And no 25k sounds accurate for a complete rebuild. I'd love to see pictures though.

Home inspector messed up, possible insurance claim?

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