This is the ninth article in my series called Buying a Home 101. This step-by-step series will take you through the entire home-buying process — from finding a buyer’s agent to settlement day, and even maintaining your home after you’re all moved in.
You don’t want any nasty surprises after you move into your new home, right? Getting a professional home inspection is one very important step you must take!
Depending on the level of competition for the home you are looking to purchase, you might decide to do a home inspection before offers are due so you can write your offer non-contingent on a home inspection. While at other times, you may not have the need to do that and will include a home inspection contingency in your offer.
In either case, these tips will help you understand how to navigate what should happen before, during and after your inspection to make sure that you get the house you want AND have no surprises after settlement.
No home is perfect but at least a home inspection gives you some guidance on what you are facing.
Only you can decide what you are willing to accept or undertake if you decide to buy this home. BUT remember, you can only do that if you know the facts about your home. That’s why the home inspection is your fact-finding mission!
If any red flags arise, then you’ll need to decide what’s a deal breaker or not; and whether you’re going to negotiate repairs with the seller or void the contract entirely.
Here’s a rundown of what to expect:
Make sure you hire a reputable and experienced inspector. Most states don’t require licensing so you want to find someone who is highly recommended, works full-time in the field, and is affiliated with a professional organization, such as the American Society of Home Inspectors (ASHI). Also look for someone who’s familiar with local building codes and the home’s type of construction and age.
Items to Check Off
A home inspector will visually inspect the physical condition of the home and its major systems. A standard checklist usually includes heating system; cooling system; electrical system; appliances — kitchen/bath/laundry; plumbing; chimney; framing/structure; foundation/basement; drainage; roofing; and garage.
What to Expect
Keep in mind that inspectors look for deficiencies that are in view and won’t pull up carpet or look for any other hidden defects.
Also, if the inspector has serious concerns about a specific element, then you may need to hire an expert – such as a structural engineer, HVAC contractor, or plumber — to give you a more thorough evaluation.
If a home is vacant, make sure the seller will have all the utilities on during the inspection so the inspector can see how they operate. You don’t want to incur the cost of a second trip out to your home!
Time and Cost
On average, a standard inspection can take 2 to 4 hours depending on the size of the home and can cost a few hundred dollars. Ask to be one of the first or second appointments of the day, so you have a “fresh” inspector who will take time at your home.
For an additional fee, some inspectors may include items such as wood destroying insects, rodents, mold, fences, pools, spas, sprinkler systems, septic tanks and also environmental services, including testing for radon, lead, asbestos, carbon monoxide, and formaldehyde.
Usually, a specific license is required to inspect these items so check to see if your inspector can handle them. If not, you will need to bring in an expert if you have any concerns.
Show and Tell
Having an inspection is a great opportunity to gain some first-hand knowledge of the home you are about to purchase. You should accompany the inspector during the inspection to take advantage of his/her expertise and find out how the home functions.
During an inspection, you will see what type of systems exist in your home and their condition. You also can learn how to maintain them to improve the enjoyment and value of your home.
It’s a good time to ask questions so you understand your home AND the inspection report you’re about to receive.
After the inspection, you will receive a signed report that summarizes what was discovered. This report is your property and no other party is entitled to see it. Ask if you will receive the report on-site or if it will be emailed to you.
Remember, it’s important to understand that an inspection is not a warranty since it is limited to what is visually accessible at the time of inspection. Many inspectors carry errors-and-omissions insurance but their contracts often limit their liability to a refund of the fee.
Take the time to carefully review this report and reconcile it with the seller’s disclosure statement. If nothing is amiss, you can go forward with your purchase.
However, if the inspector discovers some defect, you now need to make a plan of action to resolve the issue or just cancel the contract.
Red Flag Alerts
Some red flag issues are hidden and hard to see at first so make sure your inspector keeps a keen eye on the following:
- Lack of general maintenance. A home that hasn’t been properly taken care of for many years could have major issues – such as water damage — lurking. That’s when due diligence is especially needed during an inspection.
- Too many issues in a home that isn’t old. Some issues are typical of a home’s age and location and not the sign of poor construction. For example, you may not mind a fixer-upper that has “good bones” located in a certain neighborhood. However, you do want to steer clear of a home one that isn’t really that old for the amount work it might entail.
- Do-it-yourself additions or any DIY work that isn’t up to code. If the addition looks awkward and cheap, it probably is and could be detrimental to the home when you want to resell. Or, you’ll need to factor in the cost and time to tear down and rebuild properly.
- Termite infestation. This can wreak havoc on a home so you’ll need to determine how bad it is AND how much it will cost to fix and prevent in the future.
- Moisture in the basement. This can mean two things: the home’s grading has some seepage issues and/or you’ve got the potential for mold. Usually, the basement will smell musty if this is the case. Mold is a serious issue and can cause health problems if pervasive, so tread carefully!
- Watermarks on the ceiling or walls could signal a leaking roof, gutters rusting, or faulty plumbing. These can all leading to wood rot and other possible destruction. All can be fixed but you’ll need to determine the extent of the damage.
- Cracks in the wall and sloping floors. These indicate possible structural and foundation issues, which can be costly depending on the age of the home.
- Toxic materials in homes built before 1970 such as lead paint or asbestos (found in some building materials). Factor in containment and professional replacement costs before you buy!
- Faulty and outdated wiring. This can be a serious fire hazard so inspectors should check for overloaded circuits and proper grounding.
If something was red flagged in the report, you may need to hire an expert and get some estimates for needed repairs before you can move forward with the sale.
Knowing what you’re willing to fix or not fix is important. Talk to your agent, family, or friends and also call a contractor to discuss which defects are minor or not.
For some items, it could be a simple solution. A trip to the hardware store may be all that’s needed. Get a list of those items you want to fix yourself and price it out.
If you want to go ahead with the sale, you’ll need to decide if you want the sellers to fix it themselves or offer as credit. If you have a choice, sometimes it’s smarter to hire your own contractors and supervise repairs.
Before issuing a formal “request to repair,” consider the seller’s incentive to hire the cheapest contractor or to replace appliances with the least expensive brands.
To eliminate this risk, you could ask for a credit from the seller to cover these costs yourself after settlement. This is not always possible and requires an agreement with your title company and lender. If this is the route you’d prefer, definitely work with all parties to ensure this can be done.
Stay tuned for next week’s Review Those Condo Docs! Purchasing a condo unit is like you’re buying into a business. You need to determine how stable and financially sound this “business venture” is before taking it on.