Why should you have your home inspected?

Inspection is a critical step before you finalize your home purchase agreement.

When should you inspect?

Home inspection generally takes place after an offer has been accepted and the buyer and seller have signed a contract, but before the closing of the sale that makes you the owner. The home purchase agreement needs to have a clause that allows for a home inspection to occur within a specific number of days as a contingency to the final agreement. There is a difference between the home inspection and the home appraisal. After the buyer applies for a mortgage loan, an appraisal is ordered by the lender as part of the approval process. The appraisal is for the purpose of determining the home’s market value, and is often conducted between lender, appraiser and real estate agent without any involvement on the part of the buyer aside from covering the cost.

An inspection, meanwhile, is arranged solely between the professional inspector and the buyer, and is conducted for the purpose of determining the overall structural soundness of the home. The US Department of Housing and Urban Development Federal Housing Administration (HUD) has prepared Ten Important Questions to Ask Your Home Inspector for buyers to use as a guide when looking for and working with a home inspector. It is the responsibility of the buyer to pay for the inspection on the day it is conducted, and a few days later, you will receive a detailed written report from the inspector. Michigan State University Extension recommends that the buyer arranges for an inspection as soon as possible after your offer has been accepted by the seller. The inspection and any subsequent negotiations must occur within the time period specified in the purchase agreement or the sale will move forward.

While a lender may require an inspection and appraisal, if you are buying on a land contract or paying cash for your new home, an inspection is still a good idea. An inspection doesn’t mean you are buying a perfect home. It means you know what you are getting into. The inspector’s evaluation addresses the home’s condition at the time of inspection. If the furnace worked in June when it was inspected, you can’t sue the inspector in December when it doesn’t.

What is included in a home inspection?

A home inspection is an objective visual examination of the physical structure and systems of a house, from the roof to the foundation. The standard home inspector’s report will cover the condition of the home’s heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement and structural components.

HUD has an additional bulletin, For Your Protection: Get a Home Inspection that can provide you with specifics when purchasing a FHA property.

Depending on what state you’re buying a home in, additional inspections may be required. For example, some states require the seller to obtain a certification from a pest control company that the house is free of termites or other pests. Other such inspections may include detection of lead paint or radon gas or the quality of water and septic systems on the property. Check with your real estate agent to make sure you know all the inspections required and who is responsible for arranging and paying for them.

What If…?

Of course, a home inspection begs the question – what if something serious is discovered? Problems discovered during the home inspection process that were unknown before an offer was made and accepted may affect your desire to go through with the purchase. Your purchase agreement should state that the sale is contingent on the home passing inspection. It is important to be certain that the inspection and any negotiations in response to the inspection take place within the time specified in the purchase agreement. The buyer and seller have the right negotiate the cost of any needed repairs or to cancel the contract based on the outcome of the inspection report. Most likely, the inspection report will include a few less serious issues, and the seller may agree to a set amount of liability in making the repairs.

Overall, a home inspection is a vital step in making one of the largest purchases you will ever make. Based on the investment you are making in your new home, it is a wise step to take and worth the cost to know every detail of the property you are buying and to make sure you are getting exactly what you expect as you move ahead on the purchase of your new home. 

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