How A Home Inspection Protects You

Here’s a great article from Forbes

How A Home Inspection Protects YouGetty

After the seller accepts your offer to buy a home, the most significant event before closing is the home inspection. It’s such a pivotal point that many home purchase agreements include a contingency that lets buyers dissolve the purchase agreement if major issues are found during the inspection.

If the inspector finds relatively minor issues with the home, it’s likely you can negotiate with the seller to fix them, or the seller can pay you to fix them when you move in (if they are minor, of course). However, an inspector also could find enough major problems that you decide to withdraw your offer.

Here is a look at the home inspection process and how you can use it to your advantage when buying a home.

What Is a Home Inspection?

When you hire a professional home inspector, they conduct a thorough review of the home’s most important components—such as its structure, roof, air conditioning/furnace and electrical system—before you purchase the property. The inspection usually takes at least a couple of hours.

A home inspection takes place after a seller accepts your offer to buy a house and before closing. You’ll likely schedule the inspection directly after you sign the purchase agreement to allow enough time to get the inspector into the home and provide a report well before the closing date. Plus, an early initial inspection makes it easier to set a follow-up inspection, if needed.

As the buyer, you will schedule and pay for the home inspection, which typically ranges from $300 to $500. This is ideal because you want the inspector to provide you with any valuable information that could affect pre-closing negotiations.

Home Inspection vs. Appraisal

While you—the buyer—hire a home inspector to do a thorough review of the condition of your possible future home, your lender hires an appraiser to estimate the value of the home. The appraiser conducts a review of the property as well as comparative properties and sale prices for those houses.

If you’re using an FHA loan to purchase a home, however, the appraisal also includes an inspection. The U.S. Department of Housing and Urban Development (HUD) requires appraisers to look for problems involving health and safety and will put the loan application on hold until the seller resolves the issues. HUD strongly encourages prospective homeowners who are using an FHA loan to also get their own home inspection.

How to Hire a Home Inspector

If you don’t already know a home inspector, check with your real estate agent or family and friends for recommendations. You also can search online, but be sure to check online ratings and reviews.

the International Association of Certified Home Inspectors (InterNACHI) has a Find An Inspector tool. These association websites are also a good way to double-check on referrals you might see from others, as these sites have certification programs and a code of ethics for members. You could consult the Better Business Bureau’s (BBB) website, as well, to see if there are any formal complaints about the home inspector you’re considering.

States often regulate the homeowner inspection industry and set inspector requirements. You can get a glimpse at your state’s regulations on the ASHI website.

What to Ask a Home Inspector

Before you hire an inspector, it’s a good idea to gain some clarity. You might ask these questions directly to the inspector or to a contact at a company that has multiple inspectors on staff or under contract:

  • What is your inspection process?
  • How soon could I schedule an inspection?
  • How soon will an inspector issue a report?
  • How will I get the report? Will you email it to me, or do I need to pick it up?
  • What’s the inspector’s name and what is his/her expertise?
  • Could you share references for your company/inspector?
  • Does the inspector have particular experience with residential home inspections?
  • What will the inspection cover?
  • How long will the inspection take, and is it a problem if I attend?
  • How much will the inspection cost?
  • How Much Does a Home Inspection Cost?

A home inspection could cost you $350 to $600, which is reasonable because you are hiring a certified professional to take a few hours to thoroughly review a property and issue a detailed report soon after.

You will need to pay for the inspection before or at the time it occurs. The cost will vary and could be higher than average if the home is more than 2,000 square feet. It’s a good idea to compare prices and other details with a few home inspectors or inspection companies before you choose one.

You might also need specialty inspections, such as for mold, pests, radon and lead. It’s possible to find an inspector who can do a general home inspection plus one or more of the specialty inspections, but make sure they have experience and certifications–if applicable–to do them.

What a Home Inspector Looks For

A home inspector looks throughout the home during an inspection, from the basement to the roof, as well as for other issues that might affect the property’s value.

The main categories include:

  • Structure, including the foundation
  • Plumbing and electricity, to make sure the systems are working properly
  • HVAC, including the air conditioner, furnace and related equipment
  • Kitchen, including appliances
  • Exterior, such as driveways, porches and other spaces beyond the residence
  • Roof, gutters and windows
  • Attic, especially to find signs of mold and leaks

How Long Does a Home Inspection Take?

The length of the inspection will likely depend on the size of the home and surrounding land. Expect it will take at least a couple of hours, as the inspector has to look into each area of the home, climb on the roof and test the HVAC system, every electric outlet and the plumbing.

It’s vital for you to attend the inspection so you can get a real-time look at what the inspector discovers. Although all of the inspector’s findings will be in the report anyway, a first-hand look at the structural or electrical issues in a home will help you determine how serious they are and whether to bring them up to the seller.

Buyer’s agents often attend the inspection as well, giving you another perspective on how serious any discovered problems might be, and what course of action to take after the inspector issues the report.

How to Read Your Home Inspection Report

Home inspection reports often are completed within days of the inspection and could be sent to you as a PDF and/or through an online portal.

If you attend the inspection and talk to the inspector, it’s unlikely the report will include any major surprises. But it’s important to see some of the issues in writing, as they will give you valuable information to discuss with your real estate agent, lawyer and possibly the seller.

Some of the most costly defects include:

  • Leaks. Whether caused by a foundation crack or faulty plumbing, it’s never good when there are signs of an active or recent leak. It will take time and money to find them and figure out how to fix them, such as a quick foundation repair, new window, new roof and gutters or an overhaul of the plumbing system.
  • Mold. Signs of mold are always a concern. Minor problems might be fixed fairly quickly but more extensive issues could involve major cleanup and repair.
  • Electrical problems. The availability and reliability of electrical power are more important than ever, as more houses have become home offices and gaming centers. An outdated and dangerous electrical system could cause serious problems down the road.

Steps to Take After a Home Inspection

After you review the report, plan to discuss it with your real estate agent and lawyer (if you have one).
You’ll need to:

  • Prioritize. It’s not a good idea to fight tooth and nail over every defect found in the report. Concentrate on the ones that are most important and focus on what you’d like from the seller.
  • Estimate. How much do you want from the seller? Before your representative contacts the seller, check to see how much it might cost, for example, to patch a foundation crack or mold outbreak.
  • Compromise. Decide ahead of time what you can live with–does the repair need to take place before you move in, or can it wait? Maybe it’s OK, for example, that the seller gives you an amount of money for you to do the repairs after you move in because there’s not enough time before closing. If the seller agrees to make repairs, you’ll need to work with the real estate agent to make sure there is a follow-up walk-through to inspect the change.

If the seller ignores your concerns about the repairs–such as refusing to fix them or pay for you to do it–it might be time to back out of the purchase contract as long as you have a proper contingency. If you’re able to negotiate with the seller on the most important repairs and end up moving in, the inspection report can help guide the initial repairs you need to make in the home.

A home inspection is a straightforward way to get a professional, third-party review of the condition of the house you’re about to buy. Although it can be disappointing to find out the home you want is in a state of disrepair, it’s best to confirm that before you finalize the purchase and move in, only to find out you’re on the hook for more money than you bargained for.

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