Atop the long list of items to do when buying or selling a house is the home inspection. But what is involved? How much does it cost? Why is it done in the first place? It’s important to understand what a home inspection entails and how it affects the sale of your home or the purchase of a new one. The more you know, the less likely you are to get taken by surprise.
What is a Home Inspection?
First of all, let’s clear up a commonly misunderstood point: a home inspection is not the same as an appraisal. An appraisal is an estimate of a property’s overall market value. A home inspection is much more detailed and practical. It is also not a code inspection; therefore, does not report on building code compliance or give a “passing” or “failing” grade. It is defined as an objective visual examination of the structure and systems of a home by an impartial, neutral third party. In layman’s terms, it shows you what’s possibly wrong with the property you want to buy or sell and if it is serious enough to prevent a sale. It is not a requirement of your bank. It is not required for a loan.
The three main points of the inspection are to evaluate the physical condition of the home, including structure, construction and mechanical systems; identify items that need to be repaired or replaced; and estimate the remaining useful life of the major systems, equipment, structure, and finishes. Bottom line: a home inspection is to inform the buyer of any readily visible major defects in the mechanical and structural components, and to disclose any significant health or safety issues. It informs a seller of items they may want to fix before listing the home.
What Does a Home Inspection Cover?
A home inspection includes a visual examination of the house from top to bottom. There are hundred of items a home inspection covers, including general structure, flashings, basement or lower level, framing, central cooling and heating, chimneys, plumbing and electrical systems, drainage, bathrooms and laundry facilities, foundation, common safety devices, fireplaces and wood stoves, kitchen and kitchen appliances, general interior, attic, insulation, ventilation, roof, and exterior.
An inspector cannot report on defects that are not visible. For instance, defects hidden behind finished walls, beneath carpeting, behind storage items and in inaccessible areas, and even those that have been intentionally concealed. Systems that are seasonally inoperable (swamp coolers, air conditioning, furnaces) will not be turned on during the inspection.
How Do I Find an Inspector?
To hire an inspector, get recommendations from your Realtor, friends and family. If you don’t know anyone who has hired a home inspector, you can find home inspectors on-line, searching for “Home Inspection Services.” When interviewing inspectors, be sure to ask for references and any memberships in professional associations. Find out about the inspector’s professional training, length of time in the business, and experience.
It’s a good idea to be present during the inspection or right afterwards for a couple of reasons: First, you can ask the inspector questions during the inspection. Also, the inspector will have the opportunity to point out areas of potential trouble, which will mean more to you if you see it with your own eyes than read it in the inspector’s report later. Many inspectors also will offer maintenance tips as the inspection progresses. If you can't be present, your Realtor can video the inspector going over the report or, like I do, have a Facetime discussion.
Is the Seller Obligated to Make Suggested Repairs?
The seller is not required to make most repairs, replacements or maintenance updates since this is not a code inspection. However, the buyer can use the inspection report as a negotiating tool. For instance, if certain repairs or replacements are made, the buyer might offer to pay more, or if they’re not, the buyer can bid lower.
Also, never allow an inspector to contract with you to make repairs he/she has suggested — this is a major conflict of interest, not to mention unethical.
There are items required by the lender that must be completed such as: vapor barrier under the home, smoke detectors, CO2 detectors and double straps on the water heater.
How Much Does it Cost and How Long Will it Take?
Remember that a thorough, accurate home inspection takes time. The last thing you want to do is to try to hurry the inspector along. The inspector’s most important priority is accuracy, and accuracy takes time. The chances of mistakes and missed conditions are much more likely the more the inspector rushes through. Expect your home inspection to take around two hours (allowing about one hour for each 1,500 square feet of living space over 3,500 square feet). Of course, older homes will take longer than newer ones.
Expect your inspection to cost anywhere from $400-$700 depending on size and options you choose. The cost is worth it and may be one of the most important investments you make when buying a home.