By Ray Boss Jr. | Contributor, U.S. News & World Report
(Originally published on Oct. 18, 2016 in U.S. News & World Report)
Throughout the homebuying process, you will encounter a number of expenses including, but certainly not limited to, an appraisal, transaction fees and a survey – but none is more important than the home inspection. Dollar for dollar, there is no better use of your money, as a home inspection will not only outline the strengths and weakness of the house you are buying, but will show you how to operate it.
Choosing the Right Type
When you sit down with your real estate agent to prepare your offer, he or she will go over the different types of inspections you can choose from. While there are different inspection options – radon, pest and mold, among others – you first want to steal with a standard home inspection.
There are primarily two different types of home inspections – the home and general inspection (the names may differ depending on your location). There’s no difference in the way the inspector approaches the property or with the report he generates – it’s how that information is used that makes it unique.
A home inspection is arguably the more classic option. Based on the report you receive, you will send a notice to the seller asking for either certain items to be fixed prior to settlement, or a dollar amount be credited toward your closing costs.
The general inspection, on the other hand, is for informational purposes only. While it allows you a full inspection and often gives you the right to walk away based on those results, it does not provide an opportunity for items to be fixed or a credit given in negotiations.
Choosing Your Inspector
Every individual involved in the homebuying process must be top-notch. This is likely the biggest investment of your life and understanding what you are getting yourself into is of the utmost importance. With this in mind, be sure you choose a tried and true inspector you can trust to overlook nothing and provide your report in a timely, organized manner.
The first person to talk to for referrals is your real estate agent. Most agents have likely encountered the good, the bad and the ugly of the home inspecting world and found a few professionals they trust. Make sure your inspector is actively licensed and a member of a trade association, like the National Association of Certified Home Inspectors or American Society of Home Inspectors, and other local professional groups. Members of professional organizations are often held to a higher standard and have gone through more rigorous training to be associated with an industry group.
Finally, ask if the inspector will allow you to see a sample inspection report. While you’ll receive all the information during the time of the inspection, the sheer amount of details can be overwhelming. Seeing a report in advance helps to prepare you for the information to come, and how it can be used as a negotiation and recordation tool as well.
Owner’s Manual
Whether this is your first home or 10th, each house offers its own quirks and there’s no owner’s manual provided. It’s highly recommended you attend the inspection, as the inspector will provide useful information throughout the process of not only the pros and cons of the property, but show you how everything works as well.
An inspector will give you a plethora of information, from which way to point your air filter to where the main water shutoff valve is and how old all your major systems are. While the age and condition of many systems and appliances will be noted in the report, an explanation of how to use everything isn’t standard in written form. Bring a notepad and jot down useful information throughout the process.
Using the Report
After the inspector has gone through the entire property and provided the report, take time to review it carefully and ask any questions to either your agent or the inspector so you fully understand what you’re reading.
As you read the report, it’s important to remember the inspector is acting as a primary care physician, and should anything need further evaluation you’ll be referred to a specialist. If the home inspector finds evidence of mold or a pest problem, for example, they’ll recommend to you talk to a mold abatement specialist or exterminator to discuss the work needed to alleviate the problem.
Every negotiation is unique and should be handled as such. That said, there are general guidelines when handling a post-inspection negotiation. First, if there are any major components that are obviously broken and in need of major repair or replacement – such as heating and cooling systems, roof and windows – go after those and don’t sweat the small stuff. You want to make sure you take care of the important items that are needed for your house to function optimally.
If there aren’t any major items to take care of, it’s time to sweat the small stuff. Create a list in order of what you consider most important to least, and present it to the sellers and make sure they understand where your priorities lie.
Finally, if you prefer to oversee the repair or update work yourself and opt for a credit from the seller, make sure you’re able to ask for the amount per the guidelines of the loan by consulting your lender. There is typically a percentage (commonly 3 to 6 percent) you are allowed to receive in total credits. Should the amount be in excess of what you need, you simply won’t receive it and it goes back in the seller’s pocket.
Keep in mind … It is important to remember several things during and after your inspection. First, inspectors can’t see through walls. While their inspection is certainly thorough, it does not include things they can’t see. Also, an inspection assesses the property as it is that day. Things change, and so do the components within the house.
I agree with you in that it is important to choose a home inspector that you trust when getting a home you want to buy inspected. It is important to remember that taking the time to do some research and to compare several inspectors can help you find the best one to give you a detailed report on the house you want to get. Personally, I would also want to read online reviews and ratings in order to find the best and most reputable inspector to help you get an idea about the type of house you want.
Thanks for the tip to ask an inspector if they will allow you to see a sample inspection report. Getting the information from a report beforehand would be really helpful for me in preparing my home. With getting a home inspection, I’ll be sure to plan in advance by learning what is in a report.
Practicality when dealing with home inspections can be key to finding problematic areas. I liked how you mentioned that inspectors can’t see through walls, but are more than willing to negotiate with price usually because they know it’s possible to miss something. It sounds like they can help a lot with identifying everything from water leaks to mold! My wife and I are considering getting one done, we will be looking into a professional to help!
I like that tip about getting a sample report. I wouldn’t want to be overwhelmed by the information. I would already have enough to worry about. I will have to ask for that the next time I work with a home inspector.
Thanks for telling us that an inspector will give us a lot of information. I will make sure to bring something to write with if I ever have a home inspected. I wouldn’t want to miss a single thing they said.
Nice!It would also be quite helpful if there were a “Bullet-point” summary of the requirements!Thanks!-Randy
I didn’t realize that home inspection is so important in the house buying process. My husband and I will start asking around for referrals before we decide on hiring anyone, like you suggested. It’s also really smart to check to see their licensing and a sample inspection report, so we will make sure to do that as well.
I really appreciate your tip to try and understand how to operate all of the appliances that your home inspector shows you. My wife and I have been thinking of getting a new house, and we want to make sure that we are operating everything correctly. I will be sure to tell my wife that we should listen to everything the home inspector has to say!