Are Municipal Inspections a Waste of Time?

Inconsistent Provisions, Fees, Enforcement:
A-Not-So Necessary Evil

Until recently, I've always defended municipal point-of-sale inspections -- required by 14 municipalities locally, including Minneapolis, St. Paul, Bloomington, and St. Louis Park -- as a well-intentioned (if annoying and occasionally, expensive) hurdle for home Sellers.

Typically, so-called Time of Sale Inspections focus on safety-related concerns such as the working condition (or not) of the heating system; basic electric features (GFI's in Kitchens and Bathrooms); and plumbing (for example, back-flow preventers).

However, after seeing all the various inconsistencies and loopholes over the years, I've come to the conclusion that their costs don't justify their benefits.

Here are the five reasons why:

One. Buyer's inspections cover the same ground much more thoroughly.

Once upon a time, a Buyer's inspection was considered optional.

Not anymore.

In the nine years I've been selling real estate, I've never represented a Buyer who declined to do an inspection -- nor would I ever recommend it.

Even if a home was selling in multiple offers -- not so common these days -- I still wouldn't recommend waiving the inspection, as some especially eager Buyers have been known to do.

On a scale of 1-10, a good Buyer's inspection is a "9" or "10," typically taking 3-4 hours and costing $300-$400, depending on the size house.

The city inspection?

I'd rate even the best ones as no higher than "2" on that same scale -- and have seen them performed in less than 30 minutes (even though they can cost north of $200).

Two. Dubious logic.

By definition, point-of-sale inspections kick in . . . only when title changes hands.

So, Golden Valley wants to know that, prior to sale, each home's sewer connection to the municipal system meets minimum standards.

However, if that's such an urgent priority, Golden Valley should implement that requirement city-wide, immediately, not just require it as a condition of a home sale.

After all, most Golden Valley homes don't change hands in any given year -- and some don't sell for decades.

How is such spotty enforcement furthering the city's goals?

Expensive & Redundant

Three. Inconsistent Provisions, Fees, Enforcement.

Some cities have their own inspectors (St. Louis Park, Bloomington); others outsource their inspections (Minneapolis, St. Paul, Maplewood).

Of the latter, the primary qualification to become a "certified city inspector" -- as best I can tell -- is to fill in a form and pay a fee.

While each city's approved list of certified inspectors contain many experienced, reputable inspectors . . . I've certainly encountered my share of incompetent inspectors.

In fact, one of my first listings (representing the Seller) involved a Minneapolis home that had just gotten a clean "point of sale" inspection.

Unfortunately, the deal collapsed when the Buyer's inspection revealed -- with lots of documenting photos -- that my client's roof was clearly past its useful life.

My client ultimately put on a new roof (and, I believe, was genuinely unaware how bad the existing roof was) . . . but by then the Buyer had walked.

Less egregiously, I've seen homes blocks apart in the same city undergo city inspections within weeks of each other, and one will get written up for plumbing and electrical violations, while the other -- in worse condition -- gets a pass.

Four. Confusing compliance.

In some cities, home owners must correct any "repair or replace" ("R&R's") items before the home can be offered for sale (Minneapolis); in others, the items must be corrected prior to closing (St. Louis Park).

If the homeowner can't or won't address the R&R items, cities typically allow responsibility to be transferred to the Buyer.

However, the protocol for doing so -- paperwork, escrow provisions, post-sale timetable for correction -- vary widely.

Finally, at least one city (Maplewood) requires a point-of-sale inspection . . . and nothing more: there's no requirement that anyone fix anything, before or after the closing, let alone a reinspection requirement (which most cities require).

I suppose this state of affairs is more agreeable to homeowners, but then what's the point?

Five. Potential to Mislead Buyers.

At least some unsophisticated Buyers, when they learn that the home has passed the city inspection, erroneously conclude that it's in good condition.

For all the reasons discussed above, that conclusion is most definitely not warranted.

Ultimately, at least in my opinion, there's scant evidence that municipal point-of-sale inspections help to ensure that the city's housing stock meets minimum standards.

After all, some of the local cities with the best housing stock (Edina, Wayzata, Minnetonka, Plymouth, etc.) don't have them.