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Lesson 7.2

Home Inspections

Barby Wulff | Mortgage Expert | NMLS #177100

Get a Home Inspection

Most prospective buyers will want to get a professional home inspection lined up as soon as they’re under contract on a home. A home inspection and the VA appraisal are not the same thing. Unlike the appraisal, a home inspection isn’t mandatory. But you should treat it that way.

A home inspection is much more granular and detailed than an appraisal. It’s a truly in-depth look at the property. The inspection focuses on a home’s problem areas and makes recommendations for improvements. It’s a way for buyers to gain as much information as possible about a property and to make an educated decision about whether to proceed with the transaction.

Home inspectors are professionally trained to evaluate every last detail of a home, including structural elements, plumbing, wiring and heating/cooling systems. These experts can assess current problems and highlight potential issues that may be on their way.

Professional home inspectors can also remain emotionally impartial while evaluating a home, which some buyers may not be able to do. Think about it: If you’ve already fallen in love with a home, you don’t want to look for reasons to derail the process. To obtain a fair assessment, you need to rely on someone who can remain objective.

That assessment can have a huge impact on your purchase, because it allows you to reopen the contract to negotiation, provided you have a home inspection contingency. A professional home inspection alerts you to a home’s negatives before the deal is done and gives you a chance to rethink and renegotiate the purchase contract.

Without an inspection, you’re out on a wire, and there’s no safety net. Imagine purchasing a home only to discover in six months that your roof is failing, the wiring is on the fritz and the foundation is crumbling. It’s not a pretty picture.

In fact, some buyers prefer to have the home inspection first before deciding whether to move forward with (and pay for) the VA appraisal. If the home inspection turns up major problems that buyers don’t want to deal with, there’s little sense in moving forward with that property. In those cases, buyers with a home inspection contingency in their purchase agreement can typically walk away from the deal with their earnest money intact.

Finding a Home Inspector

Not all home inspectors provide the same level of service. To find an experienced, reputable home inspector, consider the following tips:

  • Use recommended inspectors. Ask your real estate agent or even your loan officer for home inspector recommendations. One of these professionals should be able to recommend quality inspectors in your area. Also check with friends and family members who have recently purchased homes.
  • Check with trade groups. Organizations like the American Society of Home Inspectors or the National Association of Home Inspectors maintain a list of local members. Inspectors have to go through a certification process to belong to these organizations, which helps ensure members maintain a high level of service.
  • Examine qualifications. Some states require home inspectors to be licensed. Check with your real estate agent about licensing requirements in your state, and make sure that your inspector meets those requirements.
  • Ask to see a sample inspection report. A sample inspection can tell you a lot about an inspector’s abilities. Is the report clear and thorough? Are images of deficiencies included? Does the report make recommendations for potential homebuyers? Failure to include any of these items is a warning sign. You’re responsible for the cost of a home inspection, and you want to make sure you’re getting your money’s worth.
  • Ask about costs. Ask about fees before hiring an inspector. Home inspection fees vary based on the provider, the size of your home and your location. A common range for home inspection costs is $300 to $500, according to the U.S. Department of Housing and Urban Development. Considering the amount you’ll ultimately end up paying for your home, that's a relatively minor price to pay for peace of mind.

Scope of Inspection

An inspector will examine practically every corner of your home for current or expected problems, from the roof to the crawl space and everything in between.

Inspectors will examine a host of areas, including:

  • Heating system
  • Central air conditioning system
  • Plumbing
  • Electrical systems
  • Roof
  • Attic
  • Insulation
  • Walls
  • Ceilings
  • Floors
  • Windows/doors
  • Foundation
  • Basement/crawl space
  • Structural components

The inspection report will detail the current condition of a home and list any problems that may be on the horizon. Your home inspector will typically spend at least two hours evaluating your home. Try to be present for the inspection. It’s a great way to become more familiar with the home and its potential problems.

Your inspector will usually provide a detailed inspection report within a few business days. The report will contain extensive data about the condition of the home and recommended repairs.

As a buyer, you can decide how to proceed at this point. If the inspection uncovered a crumbling foundation or a huge sinkhole in the backyard, you may be thinking twice about your purchase.

If the inspection revealed a few minor problems, you can renegotiate the contract with your seller. When you made your original offer, you believed the home was in a certain condition. The inspection provided new information, so the value of the home may have changed.

Let’s say that an inspection revealed a home has foundation problems. You could ask the seller to pay for the repair work or to renegotiate the terms of the contract. You could consider trying to pay for the repairs yourself. Or you might decide that you don’t want to move forward on a home with foundation issues.

As long as your contract is contingent on the results of a home inspection, you’re free to walk away with your earnest money back. The only cost to you is the home inspection fee.

This is another time when having a good real estate agent can make a big difference. Lean on them and your lending team when deciding how to pivot based on the home inspection.

  • Still haven't talked to a lender?

Remember, too, that there’s a danger in asking for too much. Most buyers won’t ask a seller to fix every single item from the inspector’s report. Focus on the major problems.

Inspections for New Homes

It definitely makes sense to get an inspection on an existing home. Outdated air conditioning units or old wiring could pose big expenses or big safety hazards to new buyers.

But do you really need an inspection if you’re purchasing a brand new home?

Just because a home is new doesn’t mean that everything has been built safely or correctly. Shortcuts may have been taken, safety measures may have been skipped or improper materials may have been used. A home is a big investment, and it’s important to take the necessary precautions.

No matter what type of home you’re purchasing, we strongly recommend a professional home inspection.