Here are three generalizations which might keep you from getting screwed
when buying a house..
1) All home inspectors are not equal. The one your realtor suggests may be
someone who facilitates sales by only flagging clearly defective items,
instead of noting those AND pointing out any suspicious items. Obviously,
this makes it easier for deals to go through, so the realtor is inclined to
recommend the inspector again.
2) Home warranty companies are often the low end of the insurance market.
You think it is difficult getting a claim settled on your car, just try a
home warranty company. If you buy a home warranty, put everything in
writing when you have a claim. Send your letter certified mail, reciept
required and fully detail the problem. Request that they respond in writing.
If they respond by phone, tell them to send you a letter instead. It is very
easy for them to bluff and deny your claim over the phone. Lots of claims go
away after that tactic. However, they won't pull the same bogus claim
denials in writing because it leaves evidence for small claims court or the
State Insurance Commissioner.
3) Seller paid items. Don't bother writing into the contract that the seller
will have X, Y, and Z fixed or that the seller will have the house
professionally cleaned once they vacate. Instead, as the buyer, get
contractors you trust and will use in the future to give you repair (or
cleaning) estimates and discount the purchase price by the sum or put that
sum into escrow for use on repairs or cleaning. Letting a seller fix
something or letting the seller pay a cleaning service is a great way for
the seller to skimp and have a substandard repair made, or to pay their kid
$25 to "clean" the house.
I've bought and sold 4 personal residences in the last 4 years and have been
on one end or the other of each of these situations.