You’ve come a long way on your homebuying journey. Now, you’ve finally found a home that’s just right, have signed a purchase contract, and are waiting for the sale to close.
But how do you know that the home you’re buying is in good condition? This can cause some stress even if you’re pretty handy, as potential problems and safety issues may cost you significantly after you move in. That’s why it’s crucial to have a home inspection done before the sale closes and the title is in your name.
What is a home inspection?
A home inspection is an assessment of a home’s current condition. It’s completed as part of the closing process after the seller accepts the buyer’s offer, and provides the buyer (you) with additional information and peace of mind before making such a significant investment.
Certified home inspectors will perform an inspection that focuses on areas such as the home’s HVAC, plumbing and electrical systems, foundation, structural elements such as the roof and walls, and other areas. You’ll receive an inspection report outlining both major and minor issues with the home.
The home inspection contingency
A home inspection is even more meaningful if your purchase contract includes a home inspection contingency. This contingency allows you to walk away from the sale, with your earnest money, in the event the home inspection reveals any issues with the home. If you walk without a contingency in the contract, the seller can keep the earnest money regardless of what the inspection uncovers.
The contingency gives you negotiating power, especially in a housing market that favors buyers. If there is an issue you’d like to have addressed, the seller will be encouraged to act to prevent the sale from falling through.
On the other hand, in a highly competitive housing market, you might consider waiving the home inspection contingency (and other contingencies) to make your offer more attractive. While this may be an effective buying tactic, it leaves you at greater risk if there’s a problem with the home.
Your real estate agent, who creates the purchase contract (often using a template created by an attorney who specializes in real estate transactions) can discuss the pros and cons of using an inspection contingency.
Home inspection cost and timing
As the buyer, it’s your responsibility to find an inspector, and schedule and pay for the inspection. The cost varies by inspector, as well as the home’s size, age, and condition. Setting aside $500 for a home inspection is a good rule of thumb.
An inspection typically happens in the weeks leading up to the final close. However, it’s important to time the inspection early enough in the closing process to give the seller a fair chance to address any issues.
The inspector may also recommend a specialist come to the house for specific issues — for example, an electrician to inspect the condition of old wiring or an HVAC technician to look at a noisy furnace. This adds cost (your responsibility) and time to the process. Budget accordingly.
It’s not uncommon for a seller to schedule an inspection, then present the home inspection report (presumably free of any major issues) to prospective buyers. The seller is entirely within their rights to do this. But it’s important to have an additional inspection done by a certified home inspector of your choosing and not simply accept the findings of an inspector hired by an eager seller.
How to find a certified home inspector
Your real estate agent probably has a list of inspectors in your area that they know and trust. You can also turn to family, friends, and colleagues who’ve recently moved to get inspector recommendations.
If you prefer to search online, check out Home Advisor or the “Find an Inspector” tool on the American Society of Home Inspectors (ASHI) website. ASHI certifies inspectors who pass an exam and pledge to follow a code of ethics and professional standards. It also publishes a state-by-state list of home inspection regulations.
Questions to ask when hiring a home inspector
• Do you have required state licenses, and are you bonded?
• How much experience do you have?
• What do you charge?
• Do you have any specializations or additional services?
• How will we communicate (email, text, phone) during the process?
• Can I attend the home inspection?
• Can you provide references?
The home inspection process
If possible, attend your home inspection. This way you can see first-hand what the inspector sees, ask questions, and discuss any issues that may be uncovered. Attending also lets you get to know your (soon-to-be) new home a bit better, as the inspector will focus on things you might not have paid much attention to during the showing. This can be particularly advantageous for first-time homebuyers, who may not be familiar with the ins and outs of owning a home.
The home inspection process could take anywhere from an hour to four hours, depending on the size and condition of the home. The inspector will focus on critical areas such as:
• Plumbing — Check for leaks, monitor water pressure, ensure proper drainage and fixtures work correctly, and check that the water heater works properly.
• HVAC — Ensure the furnace and air conditioner work properly and are maintained, and that the home has adequate airflow.
• Electrical — Check the condition of the wiring, switches and electrical outlets. Ensure that the panel functions properly and is adequate to the home’s electrical needs.
• Interior space — Ensure the walls and floors are even and in good condition, and the windows and doors open and close properly.
• Foundation, roof, and structure — Check the foundation’s structural integrity. Ensure walls and window/door frames are not bowed or sagging. Look for signs of rotted wood or insect damage.
• Exterior — Ensure the grounds are free of standing water and that landscaping/trees are not coming into contact with the house.
Use AmeriSave’s house inspection checklist to help ensure your inspector focuses on all the home’s most important systems and features.
What’s not included in a home inspection?
A home inspection is, by design, a high-level look at the home’s current condition. Your inspector can flag areas of concern, but they may not always be able to investigate suspected issues deeply. As mentioned above, they may recommend that other specialists come to the home, when appropriate, for a more expert look.
An inspector will also be constrained by what they can and can’t see. Carpeting, walls, furniture, and landscaping may limit their access to certain home areas.
When shopping for an inspector, ask if there are any specific areas they don’t include. Don’t be surprised if a standard inspection doesn’t cover things such as the sewer and other underground lines, swimming pools, landscaping, the fireplace and chimney, or pest detection.
Finally, note that most inspectors’ liability is limited to the fee you pay for the inspection. This means that if the inspector misses something that ends up costing you, the most you’d be able to get back is your inspection fee (unless you hire an attorney and file a lawsuit).
Differentiating major and minor home inspection issues
Even for a newer, well-kept home, you may be surprised at how many issues the inspector flags in their report. Remember that the inspector’s job is to note both major and minor issues. And while you may want to ask the seller to address major issues (such as a needed roof replacement or furnace repair), it’s likely not worth your time and effort to nitpick the minor stuff (such as scuffed paint in the foyer).
One of the benefits of attending the inspection is the opportunity to talk to the inspector about what issues might be potential deal breakers. Your real estate agent can also provide guidance about what’s worthwhile to address with the seller.
Negotiating with the seller for the cost of repairs
Hopefully, the inspection reveals no major issues, and you can move forward with the close. If, however, the report does raise some red flags, you have a few options.
• Ask the seller to handle the needed repairs or replacement, at their expense, before closing.
• Get an estimate for the needed repairs or replacement. Then, ask the seller to adjust the sale price to account for the value of the estimate. Have the repairs completed after you close the sale.
• Walk away from the sale. This may be your best course of action if the seller is unwilling to be financially responsible for any major work. Remember that you should get your earnest money back if the purchase contract includes a home inspection contingency.
• Have the repairs completed at your own expense, without the seller’s financial support, after the sale closes. This may be the best and most reasonable option for a fixer-upper, provided the home is priced accordingly.
Once again, you’ll want to discuss the pros and cons of these approaches with your real estate agent and decide what is best for you.
A little peace of mind goes a long way
The cost, time, and effort of finding a home inspector and attending the inspection may seem like a hassle — one you don’t necessarily need when trying to close on a home. But consider the cost to repair or replace your new home’s air conditioning unit or roof, or the uneasiness you may feel if you’re unsure whether the home has any issues.
Fact is, a home inspection is likely very worthwhile. It can help you avoid some future repairs and other unpleasant surprises and become a new homeowner with peace of mind.
Frequently asked questions: Home inspections
What are the most common problems found in home inspections?
According to top home inspectors featured on HGTV’s House Detective, common issues include faulty wiring (especially in older homes), problems with the roof, HVAC defects, and plumbing issues such as leaks or outdated systems.
What are some deal breakers in a home inspection?
ASHI recommends looking out for the following issues:
• Pests and bugs
• Incorrect wiring
• Roof and/or foundation problems
• Lead paint
• Bad pipes (indicated by low water pressure or signs of leakage)
• Faulty wells
• Presence of radon gas
• Location of the home in a floodplain
• Presence of mold
• Septic system issues
Any of these issues can be extremely costly and time-and-energy-consuming to remedy. They may require changes to the terms of the purchase contract, or ultimately cause the home sale to fall through.
Should I be nervous about a home inspection?
Nervous about a home inspection? It’s understandable. You’ve put in a lot of time and effort into finding a new home, and you know that moving forward with the closing hinges upon the inspector’s report.
Just keep in mind that knowledge is power. Knowledge can also save you a lot of money and headaches in the long run. If the inspection finds any major problems or safety issues, you should (provided your purchase contract has an inspection contingency) be able to renegotiate with the seller before the sale closes. You don’t want the seller’s issues with the home to become your issues.
Check out AmeriSave’s home inspection checklist to better understand all an inspection includes.
Why is it important to attend the home inspection?
By attending the home inspection, you can see what the inspector sees, discuss any issues they uncover, and ask questions. It’s also an excellent opportunity to get to know the home better and focus on things you might not have looked closely at during the showing.