Why Homebuyers Should Get a Home Inspection
No home is perfect. Every home - including newly constructed ones - has issues. You should not expect sellers to disclose any information about the condition of the house you want to buy, or about any potential hazards to the property. Even if the seller provides you a recent home inspection report, it's best not to rely on it as the seller may have chosen an inspector who’s a friend or family member, or someone who's not known to be tough on rooting out problems.
You should also ask the seller to provide any and all disclosures about the property before you hire a home inspector. You should be aware that not all sellers will know about all of the problems with the house. Some do know, but will feign ignorance, while others may disclose some but not all of the known issues with the house. In any case, the disclosures will be useful for your home inspector to better check out any known problems.
This makes a home inspection an important part of the home-buying process. So, long before you make settlement on a home, you should have the home checked out by a professional home inspector. And, it should be included in your purchase and sale agreement as a condition of closing the sale.
When to Have the Property Inspected
Before paying for a professional inspection, you can and should conduct your own informal inspection with your agent. The best time to do this is before you make an offer to purchase the house. You’ll save yourself both the time and trouble if you find any serious problems.
When doing your informal inspection, look for issues such as missing roof shingles or gutters coming loose, old or low-quality fixtures and appliances, signs of water damage, problems with the electrical or plumbing system, sloping floors or bowing walls, doors or windows not opening or closing properly, as well as other signs of wear, tear, and things in need of repair.
If you find the issues are relatively minor in nature, you'd most likely will be able to submit a purchase offer without an inspection contingency. This will reassure the seller that your offer is firm, and is not something you're likely to whittle away at after you completed the home inspection.
If you decide that you want the home inspected anyway, it should be done immediately after all parties have signed the Purchase and Sale Agreement. You usually have 10 days from ths signing of the agreement to complete the home inspection. And, you’ll want any major issues addressed early on - not on the day of settlement.
Tips on Choosing a Home Inspector
As a home buyer, you want someone who will be tough and thorough. Ask homeowning friends for recommendations, or check with the American Society of Home Inspectors (ASHI) at www.ashi.org.
Inspectors vary in experience, ability and thoroughness. But, a good inspector should examine certain components of the home you want to purchase, and then produce a detailed report covering his or her findings. A home inspection will cost you around $300 - $500 and about 3 - 4 hours of your time - depending on the age, size and type of home. But when it’s done, you'll be glad you did it.
You should plan on being present for the home inspection, and to walk around the property both inside and out with the inspector. You should insist that your real estate agent be present as well. If the home inspector uncovers any problems, he can point them out to both you and your agent - and it will make more sense to both of you if you see them in person instead of relying solely on the pictures in the report. You can also ask the inspector any questions you may have as he goes along.
What a Home Inspector Can and Cannot Do
You should be aware that a home inspector can't possibly identify everything that might be wrong with the property. In many cases, he can only check for visual cues to potential problems. For example, if the home's doors or windows do not close properly or if the floors are sloped or slanted, the foundation might have a large crack - but if the crack can't be seen without pulling up all the flooring in the house, a home inspector can't tell you for sure if it's there.
Furthermore, most home inspectors are generalists, not specialists. While they can tell you that the foundation might have a problem, they can’t be absolutely certain. In those cases, they will recommend that you hire an expert to verify the problem, to determine whether it’s a small problem or a big issue, what could happen in the short term and long term if repairs are not made, and to give you an estimate of the cost of repairs.
While most home inspectors are not pest inspectors or a structural engineers, they should be able to look for signs of any pest infestations such as termites and powder post beetles, as well as dry rot, mold and mildew, and any structural damage. If there are any signs of fungus or pest infestation, he will recommend that you hire a professional mold or pest inspector to examine the property. If there are large cracks or signs of a crumbling foundation or bowed basement walls, he will recommend the you hire a structural engineer to determine the scope of the problem and what repairs need to be made.
A home inspector also probably won’t be able to tell you if the septic system is functioning properly or whether there is soil or groundwater contamination from an underground oil storage tank. It’s best to leave those for other professionals who are experts in those fields.
The home inspector should note iin his report the following:
Whether each problem is a safety issue, or a major or minor defect
Which items need replacement and which should be repaired or serviced
Items that are suitable for now but that should be monitored closely
While every home has issues, the home inspection can reveal problems with the house that you might be able to get the current owners to fix before you move in. This will save you both time and money.
If you are a first-time homebuyer, a home inspection can give you a crash course in routine home maintenance as well as a checklist of items that need attention to make your home as safe and sound as possible.
After the Inspections Are Completed
If the inspection reports show that the house is in good shape, you can proceed with the purchase, knowing that you're getting what you paid for.
If the home inspection reveals major problems with the house - such as an antiquated plumbing or wiring system or major termite damage - you have several options:
If the problems are too significant or too expensive to fix, and as long as the purchase and sale agreement has an inspection contingency clause, you can choose to walk away from the purchase without losing the earnest money deposit.
For large or small problems, you can ask the seller to either fix them, reduce the purchase price, or to give you a cash credit at closing to fix the problems yourself - this is where a home inspection can pay for itself several times over.
If these options aren't viable in your situation (for example, if the property is a short sale, is bank-owned, or is otherwise being sold ‘as-is’), you can make the repairs yourself (or hire a licensed contractor, depending on the nature and scope of work) and have them completed in order of their importance and affordability once you own the property. Or, you can get a rehabilitation loan such as the FHA 203(k) Rehabilitation loan or the Fannie Mae HomeStyle Rehabilitation loan and incorporate most if not all of the cost of repairs into the mortgage.
The Bottom Line
Home buyers need to be extra vigilant about inspections in the early stages of a purchase because if problems are discovered too late in the process, it can "dash home owners' dreams and budgets," writes Yahoo! Finance in a recent article.
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