You and a seller have agreed upon a purchase price, and you’ve signed a contract stating that you’re ready to buy your new home.
Or maybe you’re ready to list your home for sale. You’ve staged your rooms, paid for professional landscaping and worked with a real estate agent to set the right asking price.
What’s the next step? In both examples, it should be hiring a home inspector.
A home inspector studies a home to determine its condition. The inspector will examine a roof to see if it’s leaking or is nearing the end of its life. The inspector will search for signs of a sinking foundation. Inspectors also make sure major appliances are working and will note when big-ticket items such as hot water heaters or furnaces might need to be replaced.
Benjamin Martin, owner of Florida Certified Home Inspections #1, based in Seminole, Florida, said that buyers should always order a home inspection. As he says, a home is one of the biggest purchases people make; an inspection helps them understand more about this investment.
"It’s my job to identify deficiencies in a home that might not be disclosed or even known by the seller," Martin said. "Armed with these findings, buyers can then work with their agents to make any last-minute negotiations or decisions before making the final purchase."
Martin said that in some cases, an inspector's findings might help buyers negotiate a lower price or help them persuade sellers to make repairs or upgrades before they close on the home purchase.
Why do you need a home inspection?
If you’re buying a home, you want to make sure that the residence doesn’t come with any costly surprises. If the home inspection does find expensive problems, you can ask the sellers to reduce the asking price, make the fixes themselves or provide you with a credit at closing so you can hire someone on your own to repair the problems.
If an inspector finds a number of serious problems, you might be able to walk away from the sale without losing any of your earnest money.
Steve Worsley, owner of Pinedale, Wyoming-based CNC Contractor Services, has been performing home inspections since 2004. He said that inspectors work for buyers, or, in the case of a prelisting inspection, the sellers of a home. They don't work for real estate agents.
This makes them an important ally for anyone buying a home.
"A home inspector is looking out for the buyer's interest, not trying to make a commission," Worsley said. "Skipping the inspection could cost thousands down the road once a major defect is discovered."
If you’re selling, ordering a home inspection makes sense, too. This way, you can uncover any serious problems and fix them before listing your home. This will eliminate any surprises that could scuttle your real estate sale.
There is some risk involved in ordering a seller’s, or prelisting, inspection, Worsley said. If a seller’s inspection turns up any defects, you are legally obligated to disclose them if you don’t fix them. This could turn buyers away from your home before they even give it real consideration.
How long is a home inspection?
The length of a home inspection depends on the size and age of the home. Usually, it will take an inspector longer to complete an inspection for a home that is older and larger.
In general, though, you can expect the inspection to take approximately 2-3 hours. If you’re buying a home, make sure to follow along with your inspector. Tagging along will not only give you an up-close look at any potential problem areas, it will also give you a chance to learn the locations of such important home features as your water shut-off and electrical box.
And if you’re selling? Tag along with the seller’s home inspection, too. You’ll want to hear the inspector’s explanation for which systems in your home need upgrades or repairs.
What does the inspection cover?
The American Society of Home Inspectors says that an inspector will study your home from its foundation to its roof. A standard report, then, will cover the home's heating system, air-conditioning unit, plumbing, foundation, electrical systems, roof and attic.
Inspectors also study a home's insulation levels, flooring, windows, doors, foundation, walls and ceilings.
Martin said that the most important and potentially costly problems that inspectors might find center around the roof, electrical system, foundation, plumbing and air and heating systems of homes.
When inspectors complete their evaluation, they’ll send you a detailed report outlining the condition of the home you are selling or buying, along with any recommendations for repairs. A report will also state whether certain appliances – such as a home’s furnace or AC unit – are nearing the end of their lives.
Home inspectors don't cover every possible problem with a home, though. They won't search for mold, asbestos, radon gas, lead paint or signs of pest damage. If you suspect that a home you are buying or selling does have, say, mold or termite issues, you should schedule an inspection by a specialist who focuses on those areas.
How to choose a home inspector:
You know you need a home inspector. But how do you hire the right one?
First, make sure you work with an individual who is a member of the American Society of Home Inspectors, a trade association governing the industry.
You can ask for referrals from your real estate agent or from neighbors or family members who've hired inspectors.
What if there are problems with the inspection?
A home can’t fail an inspection – it’s a report of a residence’s current condition. That doesn’t mean, though, that a home inspection that points out a sinking foundation, aging roof and outdated wiring system won’t make buyers nervous.
If you’re buying a home and the inspection uncovers problems, you have several choices. You can ask the sellers to fix the problems, providing documentation to prove that the repair work was done. You can also ask the sellers to provide you with money at closing that you can then use to hire contractors to fix the problems. You might choose, too, to request a reduction in the sales price to reflect the less-than-ideal conditions of the home.
If the problems seem too severe, you can back out of the sale. Be warned, though: You might have to retain the services of a lawyer to get a refund of your earnest money, even if the inspection turns up serious issues.
If you are selling the home, it might be easier to offer the sellers a credit at closing or a reduction in the asking price. This way, you can sell the home without having to worry about hiring contractors to fix its problems.
If you’ve ordered a seller’s inspection and the resulting report details serious problems, you again have options. You can pay to fix the problems before you list the home or you can list the home without making the repairs, aware that you might have to offer concessions such as a lower sales price or closing credit after the buyers’ inspection uncovers these same issues.
Quick tips to prepare:
A home inspection can be nerve-wracking for owners and buyers. If you’re buying, you might be nervous that a home inspection will uncover problems that will make your future dream home seem less…well…dreamy.
If you’re selling, you might worry that the inspector will find expensive problems that you’ll have to spend big money to repair. You might worry, too, that the buyers may be scared off by these problems and walk away from the deal.
But preparing for a home inspection? There isn’t much you have to do.
If you’ve ordered a seller’s inspection, make sure to de-clutter your home and provide easy access to all areas of your residence. You should also gather any paperwork documenting repairs you’ve made or major appliances you’ve bought or had serviced.
If you’re selling your home, it’s wise to make the smaller, easy-to-see fixes before your buyer’s inspector arrives. Maybe your dishwasher leaks. Get that repaired before the inspection. Maybe one of your kitchen windows doesn’t open – repair that, too. An inspector will find and report these problems. The fewer negatives on a report, the smoother your path to the closing table.
If you’re buying, simply prepare by making sure to be present at the scheduled time. It’s easier to understand when problems are serious and when they’re more cosmetic when you meet in person with your inspector.
One last piece of advice? Don’t skip that inspection!
Karyn Keating-Volke, a real estate agent with Berkshire Hathaway Home Services PenFed Realty in Annapolis, Maryland, said that when she entered the real estate business more than 35 years ago, home inspections were not the rule. Today, that has changed, and almost all buyers order one before purchasing a home.
This is good, because you never know what an inspector might find. Keating-Volke points to the time her recommended inspector found an 8-inch snake skin in the rafters of the unfinished part of a home's basement. Keating-Volke's clients ordered a wildlife inspection. These inspectors found three more snake skins. The inspectors, then, couldn't promise that there weren't live snakes living in the home's walls.
Not surprisingly, the buyers ran away from that deal.
"Home inspectors have a trained eye," Keating-Volke said. "They can look at floor tiles and say, 'That looks like asbestos.' They are aware of the newest laws. They can find double taps in electric panels, failing wiring, unsecured ranges and dishwashers and broken window mechanisms. I would never recommend buying any home without a home inspection."
Have you had a home inspection done in the past? How did it go? Let us know in the comments!