Houses are the most expensive purchases many people will make in their lifetimes.
So why don't folks research the purchase more?
Many lenders require home inspections and real estate agents typically recommend them. For these reasons, 93 percent of people buying an existing home and 58 percent of people buying new homes hire someone to do a home inspection as part of the purchase process. (These stats come from a pretty interesting report from the United States General Accounting Office: "Home Inspections: Many Buyers Benefit from Inspections, but Mandating Their Use is Questionable").
Yet, let's be honest: Home inspections are cursory, highlights-only reviews. The GAO report referenced above found that 16 percent of people believed inspectors should have caught problems they had in the first year of home ownership.
Going by a single, cursory inspection is awfully trusting when making a six-figure purchase.
People expend more effort researching electronics, home appliances, and cars than they do houses. They check consumer reports, perform Google searches, talk to friends, and order CarFax reports on used cars' histories.
So why, when it comes to purchasing houses, aren't people
checking reviews of home builders;
looking up builders' business histories, including legal actions;
researching the house and the property with city and state government offices, from tax offices to building and permitting offices that show what was constructed when and by whom and give hints as to what damage the house may have sustained;
pulling insurance claims made on the property; and
knocking on neighbors' doors to ask what living in the neighborhood is like and what they know about the house's builders, how it was maintained by previous owners, and what's happened there.
I've lived in my house for eleven years. I've seen a considerable amount of construction in my area. Often, I'm horrified at how houses are built. (For example, the balconies on one set of new homes slid off twice during the final stages of construction.) In other cases, I'm impressed by the builder's professionalism and craftsmanship. With existing homes, I typically know a bit about who's lived in each over the past decade and what’s happened there.
Yet only once has someone asked me about a home he and his wife considered purchasing.
Might we have a business idea? Looks like a couple companies have given it a go: HouseFix tried something similar to a CarFax for houses, but it didn't get off the ground, and LexisNexis offers C.L.U.E. Home Seller’s Disclosure Reports on a property's insurance claims over the previous five years.
But that's it. Not very comprehensive. Anyone game?