The Importance of a Home Inspection
The Importance of a Home Inspection
Of all the purchases you will make in your lifetime, a house will probably be the most expensive.
Because market trends show steady increases in the value of most real estate, houses have become a particularly attractive financial investment option for adults of all ages and income brackets.
Thus, high costs don’t seem to deter the majority of Americans from dreaming of buying a home or from actually buying one.
Yet, investing that kind of money into an asset without having confidence that the reward will outweigh the risk seems like a fool-hardy endeavor. That’s why a home inspection is so important to homebuyers.
What is a Home Inspection?
By definition, a home inspection is the visual examination of the exterior and interior structure and condition of a house that a qualified specialist performs.
Upon completion of the inspection, examiners will prepare a written report for the homeowners or homebuyers that details their discoveries. Unlike a home appraisal, the inspector’s analysis will not determine a house’s current market value or verify code compliance.
Instead, the purpose of the home inspection report is to provide objective, comprehensive descriptions of the physical state of the house. Based on those findings, inspectors will recommend repairs, replacements, or refurbishments.
Should You Be Present at a Home Inspection?
On average, a home inspection takes 2-4 hours, and the only one required to be there is the inspector.
Whether you’re a homeowner or homebuyer, though, you may want to tag along with the inspector or have your real estate agent be there if you cannot.
By being present, homeowners and homebuyers can get the most value out of the inspection because they have an opportunity to ask the inspector questions during the actual examination.
It also provides the inspector an opportunity to visually show interested parties problems or issues he or she sees so they understand what appears in his written report.
How Do You Choose a Home Inspector?
Although some states don’t require home inspectors to be licensed, it’s typically a good idea to choose inspectors who have completed course work and who have passed required tests to become licensed professionals in their industry.
It’s important to verify that home inspectors are insured, too. Their liability insurance protects them from oversights they might make, and it often protects you from getting swindled.
If you find several local home inspectors who meet licensing and insurance requirements but you aren’t sure which ones are the most reliable or capable, defer to your real estate agent’s suggestion or on referrals from friends and family members you trust.
What Does a Home Inspector Inspect?
Once you’ve chosen a home inspector, schedule the home inspection!
Expect the inspector to look at (specifically lay eyes on) the following features of the house:
- Exterior walls and facades
- Land grading
- Foundation (if visible); Cracks or settling issues if not
- Crawl Space
- HVAC systems
- Electrical system
- Visible Insulation
- Interior walls
- Water Heater
- Laundry Ventilation
What a Home Inspector Does NOT Inspect
Although the list looks comprehensive, it’s not!
Knowing what a home inspector is NOT inspecting is almost as important as knowing what he or she IS inspecting.
Essentially, home inspectors are not expected to examine or test for anything in the house not visible to the eye.
That includes features such as:
- Pipes or sewer lines within walls or underground
- Septic tanks
- Chimney cleanliness and functionality
- Electrical wires, insulation, or drywall within or behind walls.
And specialized problems other professionals would handle like:
- Termite damage
How Do Home Inspectors Categorize Their Findings?
If home inspectors find ANY problems with the house features they look at, they must record their findings in the home inspection report.
Typically, they make a list of issues they found and categorize each as:
- A safety issue,
- A major issue, or
- A minor issue.
Inspectors also categorize household features and items by their need for:
- Service, or
How Much Does a Home Inspection Cost?
Generally, a home inspection costs homebuyers $300 - $500.
Buyers, especially first-time buyers, often gawk at the price and ask their real estate agents or lenders if the service is necessary.
The short answer to their question is: buyers paying for a house with cash are not required to have a home inspection done on the property, but buyers paying for a house with a mortgage loan are almost always required to have a home inspection.
Lenders don’t want to assume more risk than they have to on high-dollar loans. Thus, banks will require buyers to have that home inspection done to make sure the asset being used as collateral for the loan isn’t a ticking time bomb.
5 Reasons a Home Inspection is Important
Ultimately, a home inspection can accomplish 5 things. It can:
- Identify major issues before closing.
- Minimize surprises and difficulties.
- Give homebuyers the information they need to make decisions with confidence.
- Provide homeowners with a “to do” list to make their house sellable.
- Save buyers and/or sellers money in the long run.
In fact, a home inspection is considered so important that most real estate sales contracts include a home inspection contingency clause!
This means that if the home inspection reveals serious defects in the house, buyers have the right to terminate the contract if sellers will not or cannot repair or replace the issues.
Sometimes, if the home inspection reveals minor issues or certain major ones, buyers will move forward with the sales contract but ask sellers to fix the issues, reduce the asking price, or give them cash credit at the closing.
Because so much money is on the line - potential losses for the sellers and potential savings for the buyers - most real estate agents recommend that buyers pay for a home inspection even if they plan to buy a house with cash.