When you find that perfect home, especially in today's competitive housing market, it can be tempting to skip a home inspection to fast-track the sale. Don't do it. While there is no legal obligation to have a professional home inspection, this crucial step in the home-buying process protects you as you embark on one of the largest investments of your lifetime.
1. Gain Insight Into the Purchase
A home inspection typically occurs after you make an offer or purchase agreement and before the closing. A proper home inspection gives you a deeper look into your dream home and uncovers potential problems that aren't visible on a typical walkthrough, from minor cosmetic damage to serious safety issues.
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A certified home inspector provides an impartial, factual report on the condition of the home. This professional works on your behalf to let you know what you are getting into.
A qualified home inspector performs a close visual examination of the physical structure and major systems of the property, from the foundation to the roof and from exterior components to interior walls — and all of the systems in between. The American Society of Home Inspectors (ASHI) publishes a Standard of Practice and Code of Ethics outlining how home inspectors should inspect each component of the home. The organization also offers an FAQs resource page about the entire home-inspection process.
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Once you make your offer, if your home inspector finds major issues with the property, your realtor may be able to modify your offer to compensate for the repairs or negotiate closing costs based on the condition of the home.
2. Determine Potential Deal-Breakers
Expect that your home inspector will have plenty to tell you after they've gone through their exhaustive home inspection checklist. Hopefully, most issues are minor, like peeling paint, missing shingles or torn window screens. However, some discoveries are more grim, such as termite infestation, electrical issues, an unstable foundation, water damage or the presence of asbestos or mold.
These red flags might point to costly major repairs and must be addressed before you continue with the sale. If you decide to go forth, you may be able to negotiate adjustments to the purchase price to compensate.
Note that radon testing is not part of the standard home inspection checklist and requires specialized equipment and training. Contact your state radon program to find a certified home inspector for this service.
3. Project Future Expenses
When the home inspector looks into major systems, they'll be pinpointing the age and condition of the heating, cooling, electrical and plumbing systems. The inspection report will give you an idea of how long it might be before you need to replace expensive pieces of the HVAC system.
If the home has an ancient furnace, water heater or air conditioning unit, you may be able to have your real estate agent negotiate with the seller to account for the replacement of these big-ticket items. No matter the size of the home, these units are a significant investment worth bargaining for.
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4. Negotiate the Purchase Price
Once you make your offer, if your home inspector finds major issues with the property, your realtor may be able to modify your offer to compensate for the repairs or negotiate closing costs based on the condition of the home. Another option is for the buyer to make the repairs.
A home inspection contingency clause on your purchase offer ensures you have the right to adjust or cancel your bid based on the findings in the home inspection report. The clause will give you a specified time period for these actions.
Having the inspection report details out on the table allows the current homeowner and home buyer the opportunity to look at the complete picture before committing to the purchase contract.
Consider also: How to Renegotiate a House Offer After an Inspection
5. Cover Yourself Before Committing
Having a professional home inspector examine your new home is an essential step in the home-buying process. In addition to the peace of mind a home inspection brings before the sale, it can also save you a lot of headaches afterward. And with a home inspection contingency, you can back out of a sale if your inspector finds deal-breaking problems you aren't willing to take on.
The home inspection cost is minimal compared to the price of a home purchase, and the home inspection takes just two to four hours, depending on the size of the home.
If you're going through the refinance process of a home you have already purchased, then your lender will likely not require an inspection. However, whether you are a seasoned or first-time homebuyer, the home inspection process is an invaluable safeguard when purchasing a new home.
Consider also: Can I Refinance My Mortgage Without an Inspection?
- Consumer Finance Protection Bureau (CFPB): Schedule a Home Inspection
- U.S. Department of Housing and Urban Development (HUD): For Your Protection: Get a Home Inspection
- CFPB: Your Home Loan Toolkit
- American Society of Home Inspectors (ASHI): Watch Out for Home Inspection Deal Breakers
- ASHI: FAQs About Home Inspection
- International Association of Certified Home Inspectors (NACHI): Home Inspection Checklists
- Illinois State Bar Association: Your Guide to Buying a Home
- ASHI: Standard of Practice
- ASHI: Code of Ethics
- U.S. Environmental Protection Agency: Find a Radon Test Kit or Measurement and Mitigation Professional
- EPA: EPA Map of Radon Zones and Supplemental Information
- American Bar Association: Buying or Selling a Home