Inspection Report. New Buyer-Do we walk away or counter?

Question

Admitting that I am very new to real estate and am on a steep learning curve. We're the buyers and are looking at our first investment property (rental). Our offer was accepted by the seller--it's contingent on inspection. The inspection found  about 26 things--some minor but others that sound like we will lose money on this invesment. At a glance--does someone have an idea of what we're looking at over time to fix these? And/or do we walk away OR counter and what is a reasonable counter? Thanks for ANY advice. Our real estate agent is having a contractor look at the house tomorrow. It's a one bedroom, single-family, selling at $180,000. I believe the sellers recently flipped and did do a lot of work inside and replaced roof.

Issues:

• There are one or more areas of moisture damaged siding material on exterior of home. 
• There is a drain line plumbing vent for pitched roof with a roof termination that is less than 6 inches above roof surface. This is a non-standard application. Repair may be desired.
• The inspector was not able to visually verify the electrical system main ground. It is recommended that a licensed electrician further investigate.
• There is a need to install one or more insulated bushings over the end of conduit OR within knockout to protect wires from sharp edges in panel.
• The inspector has discovered a number of three-prong, 110-volt electrical outlets in home with reversed polarity.
• There is no discharge pipe on the safety valve for water heating system.
• There is a noticeable bow/sag to interior ceiling within home AND to roof ridge. The cause was not determined.
• It is recommended to make modifications to the attic ventilation system in this home in order to meet minimum requirements -inadequate soffit venting.
• The inspection has identified an active plumbing leak at joint within water supply piping under home as seen in crawl area.
• The access opening size (for small crawl area) is not adequate to allow for easy entrance to the crawl area.
• The vapor barrier/plastic covering on floor of crawl area needs repair to provide the intended service. It is recommended to install additional section(s) of 6-mil vapor barrier material OR re-snug/re-set existing material to cover over all exposed soil
• There is ACTIVE evidence of more than one kind of wood destroying insect found in the crawl space. The insects appear to be anobiid beetles AND carpenter ants/moisture ants.
• A licensed contractor will need to "sound"/inspect the structural members under the home to determine which, if any, should be replaced. This should include the main beams, posts, sub-flooring, and floor joists.
• It is recommended to modify/replace stacked block support under home with one properly-sized wood post secured to concrete pier pad AND gussetted to beam support
• There are one or more wood support posts, as seen in crawl area, that are situated on pier pads that are below the soil
• There is no insulation installed under structure

Michael Hayworth · Answer

OK, first some general notes, then I'll get to specifics of your report.

As a contractor, I have little use for home inspectors, unless they're of the "old guy who spent decades in construction and now is a home inspector because it's less physical wear & tear" type. Those guys are worth their weight in gold. But there's not nearly enough of them to keep up with the real estate boom. The other major types are:

• Failed in construction, was frustrated that his genius was never recognized, decided to go be an inspector so he could find fault with others' work. (A lotta these guys are building inspectors, too.)
• Have never worked in construction. Learned from a book or online course.

Then add on top of that, inspection standards make them afraid of getting sued, so they call out all kinds of minor crap that every single house in the world will have. I've seen them terrify buyers over nothing, because there's no perspective to their reports.

It's still better having a home inspection than not. I just wish there were, by and large, a better pool of home inspectors out there. (By the same token, people feel the same way about contractors....and they're right!) That's just background, saying "Don't freak out over inspection reports."

Now, all that said, there are some things that concern me in this report. I would ask for an extension of the option period in order to give a real contractor a chance to look at things. The items that are of particular concern to me are the structural issues:

• There is a noticeable bow/sag to interior ceiling within home AND to roof ridge. The cause was not determined.
• There is ACTIVE evidence of more than one kind of wood destroying insect found in the crawl space. The insects appear to be anobiid beetles AND carpenter ants/moisture ants.
• A licensed contractor will need to "sound"/inspect the structural members under the home to determine which, if any, should be replaced. This should include the main beams, posts, sub-flooring, and floor joists. (I'm assuming this is related to the WDI...they can screw up structural integrity. Usually, it's readily fixable, but they can in some instances do serious damage.)
• It is recommended to modify/replace stacked block support under home with one properly-sized wood post secured to concrete pier pad AND gussetted to beam support

Other stuff, like the plumbing leak, reversed polarity, WDI, discharge pipe, vapor barrier - that's all stuff that can be fixed in a few hours each. If I was the seller, I wouldn't bat an eye at being asked to repair those and complete the sale. Other stuff, like the attic ventilation, is no big deal to me - most older houses won't meet current standards. But the thing you want to avoid is big structural issues that can cost tens of thousands to fix. Get a real contractor in there and evaluate. Don't be afraid to walk away if the deal isn't right.

Simone Boe · Answer

That's helpful--thank you!