Questions about inspections usually come up during the initial buyer consultation as one of the costs of purchasing a home. It also comes up when a buyer is looking at a specific house that may require additional inspections due to a well or septic system. Inspections will also come up with the lender since some programs require certain types of inspections and sometimes who is to pay for the inspection. Most importantly inspections are discussed when a buyer is writing a purchase contract because inspections are one of many contingencies that need to be ordered, reviewed and then released after the repairs are resolved.
Let's talk about the different inspections that are addressed on the purchase contract:
1. The Whole House Inspection: This inspection is highly recommended on all properties that you may want to purchase. It is especially important for properties that have no disclosure such as an estate property or a bank-owned property that may be sold as-is with no repairs. This means that you are doing the inspection with the understanding that you cannot ask for repairs, but you can void the contract if there is something major that you did not anticipate that needs to be remedied. This inspections covers the entire house, exterior and interior.
2. Pest/Termite Inspection: On the purchase contract in Cedar Rapids, it is called a termite inspection. In Iowa, there must not be any signs of current active termite infestation in order for the seller to transfer the property. These inspections will also look for issues with bugs, mice and bats. The termite inspection is one that VA loans require that the SELLER must pay for on their side of the HUD settlement statement. The buyer is NOT responsible for this cost. FHA loans also require a termite inspection to be completed and a warranty to be in force at the time of closing. All other loans may not require a termite inspection, so you will need to ask your lender if this is required to obtain financing in the program that you are pre-approved for.
3. Radon Inspecton: In Iowa, this is a highly recommended inspection, though not required by lenders. Iowa has a very high concentration of radon in the ground. You have a 50/50 chance of having a radon level that is above the EPA standard of 4.0 pc/L. This test is done over a 2 day period where the windows are to remain closed and doors may only be opened for normal exit and entry. In Iowa, if the level is above 4.0 pc/L, the seller MUST mitigate the radon and it must retest at an acceptable level.
4. Well Quality Test: This is an inspection that is necessary if the property has a water source from a well or a community well. This is a fairly inexpensive test, under $20.00 and the kits to collect the water sample are available for free at the Linn County Public Health office. You follow the instructions on taking the sample and then return the sample to the public health office and pay the fee for it to be tested. The testing process can take up to 10 days and they will mail you the results. If the well has been tested in the last year, you may request to see the previous test and waive your contingency for this inspection. If it is a community well, it is REQUIRED that they have a well test completed every year, so you will just need to ask for a copy of the last results.
5. Septic Inspection: In Iowa, there is a septic law in place that protects the buyer from a septic system that does not meet current code. The seller must pay to the have the septic system pumped, then the county inspector must come out to verify that it is up to the current code. If it is not, the seller must pay to have it brought up to current code up to and including full replacement of the system if necessary. The septic system must be re-inspected by the county once the repairs are made and then the property may be transferred by the seller to the buyer.
6. Structural Inspection: This type of inspection is typically required in the cases of an FHA or VA loan appraiser, or the whole house inspector, have expressed a concern and would like a second specialized opinion. This is also an inspection that is called if there is visible termite damage even if there is no active infestation. These inspections are typically ordered by the lender and the findings require the seller to make the necessary repairs in order for the buyer to obtain the financing to continue with the purchase.
You can see that there are many types of inspections available to insure that you are purchasing a safe and sound home with your hard earned money. The inspections that are required will be discussed with your lender and then they will be listed as contingencies in your purchase contract for whichever ones are applicable to the specific property. The key is to make sure that you give yourself enough time to have them completed and addressed in writing with the seller before the contingency is waived.
Call me for your free home buyer consultation and we will discuss the average costs of buying a home including the inspections that you will want to include in the purchase contract. Have a great weekend!