While a home inspection isn’t required by law, most home buyers believe that it’s a crucial part of the home buying process.
The outcome of home inspection reports has the power to close deals or cancel them. In 2018 alone, some 4,500 realtors admitted that home inspections were the second leading cause of delays or cancellations.
Aside from being a deciding factor in the home sale, buyers may benefit from conducting home inspections. According to a survey of 1,000 homeowners, home inspections helped buyers save around $14,000 in additional costs.
How much buyers save depends on several factors, but this shows that buyers can use home inspections to their advantage.
What Is A Home Inspection?
Simply put, a home inspection is an examination or assessment of the property you wish to buy.
While an inspection isn’t an appraisal, it can influence the results of the appraisal report.
Home inspections also allow you to determine whether a house is a good buy or a bust by examining the foundation and inner workings of the property. Moreover, the home inspection report lets you check whether a house is well-maintained or has potential issues that may lead to costly future repairs.
In a standard real estate transaction, home inspections take place after the seller accepts the buyer’s offer. After both parties sign the purchase agreement, the house goes into escrow and the inspection may take place.
What Is Covered In A Home Inspection?
A home inspection report is usually carried out by a qualified home inspector. During a home inspection, the inspector checks the property’s overall condition, including the:
- Attic space
- Cooling and Heating system (thermostats, ventilation/HVAC and cooling system)
- Doors and windows
- Electrical system – panel, switches, outlets
- Exterior stucco or paint
- Plumbing fixtures, water heater, and faucets
- Porches and balconies (if applicable)
- Rain gutters and downspouts
- Stairs, railings, and steps
- Walkways and driveways
Inspectors also assess the home for any potential damage or issue that may significantly decrease its value.
What’s NOT Included In A Home Inspection?
While inspectors are concerned about the physical components of a home, inspections do not include everything. A few things that may not be covered in an inspection include:
- Carpeted floors
- Fireplace and chimney
- Internet service
- Lawn sprinklers
- Rodents (rats, mice) and pests (carpenter ants, termites)
- Roof or outdoor hardscape covered by snow
- Swimming pool equipment
- Trees and landscaping
To determine exactly what’s included in an inspection, ask your home inspector about the coverage. Buyers may need to pay for additional fees if they wish to expand the inspection coverage.
Is It Required To Have A Home Inspection?
NO, but most homeowners believe that home inspections are a necessity, not a luxury. According to the American Society of Home Inspectors, 74% of homeowners believe that having a home inspection helped them avoid problems with their home purchase.
In the 1990s, consumers relied on seller disclosures to know the flaws and required repairs for a listed property. Back then, home inspections were considered an added cost. Today, 88% of home buyers consider inspections as a standard procedure in the buying process.
Today, more buyers think of home inspections as their “protection” against bad deals, and agents feel the same. Real estate agents encourage inspections to protect themselves against possible lawsuits for non-disclosure of defects in a home.
Can A Home Inspection Affect Your Home Purchase?
Yes. The outcome of a home inspection can affect your real estate deal in several ways.
If you’re not satisfied with the current state of the house, you may request the owner to address the necessary repairs. The seller, on the other hand, approves or denies your repair request. After all, sellers are not required to repair all the issues found during the inspection.
In most cases, both parties come to a mutual agreement regarding the repairs. Buyers may leverage the result of the inspection report to negotiate a lower price. This way, the buyer can save on repairs or get a better deal on the house.
If there is an inspection contingency in the contract, the buyers may also back out of the sale in case of a bad home inspection report. The inspection contingency will also allow buyers to break the contract if he or she failed to reach an agreement with the seller regarding the repairs.
Cost Of A Home Inspection
Home inspection prices may vary from property to property. Final home inspection costs depend on the state average, property size and additional testings for issues like mold and radon.
However, according to a survey of 22,378 home buyers average inspections cost from $278 to $390. The same data puts the national average (2019) at $328.
On the other hand, the Department of Urban Housing and Development places the inspection cost anywhere from $300 to $500.
What To Expect During Home Inspections
Due to the unique nature of each home, inspection costs can vary. Some inspectors may charge you based on the size of the property, while others issue a billing based on the time they spent on investigating the house. To get an accurate inspection quote, talk to the property inspector and ask about the cost of the inspection report.
Experienced Home Inspectors Can Be Expensive
Buyers who are keen on hiring experienced inspectors should expect to pay higher inspection fees. For instance, an expert witness home inspector may charge $1,000 or more for a hand-written report.
Inspection Costs May Depend On Square Footage
Some inspectors use property size to determine the cost of the inspection report. For instance, a 2,000 square foot home can cost up to $450 while a 1,000 square foot property’s inspection cost is only $200.
For larger houses, fees will also be higher is the inspector charges by the hour. Surprisingly, inspection costs for smaller, condo-type homes may cost as much as $350. Inspectors usually charge an add-on fee of at least $50 for properties with smaller crawl spaces.
Assessments For Older Houses May Be More Expensive
Newly constructed homes may take less time to inspect, but older and more elaborate homes may need a closer look. Since older homes have potentially more defects, inspectors may take longer to check these homes.
Remember, Inspections Are NOT Part Of Your Closing Costs
Are inspections included in the closing costs?
Having a property inspected means having to pay for it as soon as it’s performed.
In some cases, sellers may commission an inspection to reassure buyers. However, most buyers prefer to hire their own inspectors. Buyers naturally doubt inspection reports ordered by sellers and prefer to hire an independent party.
There May Be Follow-Up Costs
Depending on the result of the inspection report, the inspector may commission additional inspections. If there are underlying issues, additional testing for radon, termites, lead in paint (common in very old houses), termites and mold may be recommended.
How To Save On Home Inspections
Experts suggest hiring the same company to perform general and specialized inspections. Most of the time, companies will offer a package price for general home inspections and add-ons.
To prepare yourself for the cost, contact various inspectors and ask for their fees. Since fees can vary, getting a quote would help you find a reliable home inspector with the most reasonable rate.
Home Inspection Checklist For Buyers
If you have no idea how home inspection deals go, here’s a simple home inspection checklist you can use:
1. Decide To Have The Home Inspected
Once the seller accepts your offer, it’s time to determine if you need a home inspection. While an inspection is optional, it is highly recommended. A home inspection gives you more confidence in your home purchase. After all, you want to know whether a house is worth buying or if it’s a potential money pit.
2. Look For A Home Inspector
Do you need to find a licensed home inspector? Yes and no.
In states like Georgia, home inspectors do not need to be licensed. However, in states like Texas, Nevada or Arizona, home inspectors should complete the required training and hold a license.
For more information on this, you can check home inspection requirements by state from the American Society of Home Inspectors (ASHI).
Your real estate agent may recommend an inspector if you need one. It may also be helpful to tap your personal network when you’re looking for an inspector. Inspector websites like ASHI may also be useful.
After finding qualified inspectors, ask for sample home inspection reports. These sample reports give you a solid idea of how the inspector conducts the examination.
While at it, study the inspection coverage. The home inspection package should include everything you need to check. When in doubt, ask the inspector if they can perform additional testing (ex. Pest, radon) if necessary.
Looking into these factors can help you decide who to hire. And, one final thing – springtime is the peak season for selling homes. If you’re hiring an inspector during this time, expect the demand to be higher than usual.
3. Perform The Inspection
After hiring an inspector and determining the coverage and cost, it’s time to perform the actual inspection. Set an appointment with your inspector, preferably before the peak season to avoid paying more.
In case you were wondering, you also need to show up on the property on your appointment date.
What Long Does It Take To Complete A Home Inspection?
An inspection usually takes 2 to 3 hours on average, depending on the house conditions. Old houses and larger houses usually take longer. Newer houses, on the other hand, tend to be easier to inspect. Take note that it’s harder to come up with a thorough inspection if the house is occupied or if most of the owner’s belongings are in the property.
Who Attends A Home Inspection?
The buyer commonly shows up during a home inspection. Yes, the seller may also show up during, but this arrangement is not advisable.
An inspection can be stressful for the seller. Moreover, sellers might get angry or offended, hence it’s better for them if they’re not present during the inspection.
What To Do During The Inspection
During an inspection, you, the buyer, may accompany the inspector as he checks the house. It’s good to take notes while the inspection takes place.
4. Review The Home Inspection Report
Based on the inspection report, you can create repair requests and forward them to the seller. Bear in mind that sellers are NOT obligated to approve the buyer’s request. However, the buyers may leverage the report to negotiate a better deal or walk away when the inspection unearths major flaws in the property.
Common Problems Identified In An Inspection
An inspection report is bound to reveal issues in your potential home. However, there are issues that are quite common and should not be a cause for concern, like the following:
- Signs of poor maintenance like chipped paint, cracked driveway, worn shingles
- Clogged gutters
- Faulty wiring issues like absence of wire nuts
- Minor plumbing issues such as basement leaks and low water pressure
Inspection Deal-Breakers: When Should You Walk Away From The Deal?
Sometimes, inspection reports uncover major issues that might make you rethink the deal. These problems may include:
- Roof replacement issues which can cost $7,000 on average.
- Major foundation issues like a crumbling foundation.
- Aluminum wirings which may indicate that the whole wiring system needs to be replaced.
- House in a flood zone or found in the FEMA flood zone.
- Extensive mold growth can indicate ventilation issues and may pose a potential health hazard.
- Poor drainage evidenced by wood rot and damp basements may lead to mold overgrowth and may be costly to repair.
- Presence of termites and pests can be a major issue and may take time to address.
5. Wait For The Seller’s Response
Sellers may approve or deny a buyer’s repair request. Buyers and their agents would have to wait and see how sellers react to the requests and move forward accordingly.
If a seller accepts the repair request, both parties may have to amend the purchase agreement before proceeding to the next step in the buying process.
On the other hand, if there is a disagreement regarding repairs or the condition of the home, the buyer may walk out of the deal. If there is an inspection contingency the buyer who cancels the deal will not encounter issues. But if there’s no inspection contingency, the buyer may lose the earnest money deposit and pay penalties.
How To Pass Home Inspection For Sellers
According to Realtor Magazine, sellers and their agents have a big part in making sure that an inspection goes smoothly. If you’re a seller, you may benefit from the following tips:
1. Be transparent about the defects.
Don’t hide the fact that things aren’t working. The more transparent you are about the flaws of your property, the easier it will be to identify the issues in your home. Hiding issues may be a red flag to the inspector and the buyer.
2. Take care of the lighting.
Simple things like making sure the lightbulbs are working will help save time during inspections. Busted bulbs and nonfunctioning lighting fixtures may prompt the inspector to question the integrity of your property’s electrical system.
3. Make things accessible.
Clear passageways to the basement, attic or crawlspaces to make things more accessible to the inspector.
4. Keep the appliances clear.
Make sure your appliances are clean and in working condition since the inspector would have to test them. If appliances are no longer functional, get rid of them before the inspection.
5. Remove the clutter.
Clutter makes it difficult for inspectors to check the house. If possible, get rid of the clutter.
Inspectors can complete the process faster if they have access to the areas that require checking.
6. Mark the septic systems.
Searching for septic systems can take time. Marking or mapping them ahead of time will make the search easier during the inspection.
Inspections Are Necessary When Buying A Home
A home inspection is an important piece of the home buying puzzle. You’ll be taking an unnecessary risk if you skip the home inspection.
Although sellers are required by law to disclose known issues about the property, an inspection gives a more accurate and reliable picture of a home’s condition. Inspectors see properties with different eyes and their advice can save you from a very bad deal.
Buyers may also leverage the home inspection report to request repairs or re-negotiate a part of the contract. An inspection is also a buyer’s get-out-of-jail-free card in case of major issues, as long as there is an inspection contingency.
Ordering a report may cost you extra, but it will be worth it.