Homebuyers

All About Home Inspections

There are many variables in the homebuying process. There are applications for a loan and any assistance a borrower might want, approvals, and negotiations with the seller once your dream home has been found. One variable that is generally recommended for a new homebuyer is a home inspection. Home inspections are not usually required by a lender the same way an appraisal is, but they can be very beneficial to a buyer by giving them insight into the property they want to purchase and potentially helping them negotiate the price of the house. 

What is a home inspection?

A home inspection is essentially an unbiased report made by a qualified third party on the physical condition of a house. They can cost anywhere from $200-$1,000 depending on the location and square footage. When you are buying a home, the cost of the home inspection is usually included in your closing costs.

What is included in a home inspection depends on several variables. These can include:

The scope of the inspection: Certain systems may require specialized inspections to determine their condition and usability. For instance, a home inspector may examine certain aspects of the electrical system in your home and report on the state of the conductors or whether the outlets are loose. They cannot examine the state of the wiring in the walls. You would need an electrician if you are curious about the condition of your full electrical system.

Accessibility: Home inspectors will not enter restricted or locked areas or inspect places that are dangerous to their safety or generally inaccessible. For example, they may not fully examine your roof if it is dangerously steep or enter the attic if it’s behind a locked door.

Visibility: Your home inspector will examine components of systems and structures that are visible to them. For instance, they may record water damage to an internal wall and recommend that it be examined further for the possibility of mold or rot, but they cannot determine the presence of mold or rot themselves unless it is visible.

In general, home inspections will cover visually accessible structural, systematic, exterior, and interior aspects of a home. These can include:

• The home’s foundation
• The floor
• The roof
• The ceiling
• Walls and wall coverings
• Exterior and interior doors
• Windows
• Any steps or stairs
• Cabinets and countertops
• Appliances
• Insulation and ventilation
• Heating and cooling systems
• Electrical and plumbing systems
• Driveway, patio, and walkways

Your home inspector will examine these structures and systems and create a detailed report of their observations and recommendations. They will note parts of the home that need repairs, may be close to wearing out, or may be indicative of further damage. They will provide photos and recommendations for the next steps. The inspection itself generally takes 2-4 hours, though it may take longer depending on the size and condition of the home and you can usually expect to have the report within 2 days.

What a home inspection is not

A home inspection is not an appraisal, a guarantee, or an in-depth examination. Your home inspector will not tell you how much your house is worth and is not a replacement for specialized evaluations of your systems like electrical or plumbing. There are plenty of things home inspectors are not required to determine. These can include:

• Market value or marketability
• Whether or not you should purchase the property
• The presence of hazardous substances
• The presence of environmental hazards
• Operating costs of current systems
• Soil conditions
• Potential liability
• Surveying services

Why a home inspection is beneficial

Buying a home is one of the largest financial investments a person can make. Getting a home inspection can help you protect that investment by making sure that you know exactly what you’re getting. A home inspector will report on the things that need to be repaired and point out indicators of potentially larger issues that may end up costing you more than you expect in the long run. This allows you to make a fully informed decision about your purchase.

A home inspection can also give you negotiating power. For instance, if a home inspector finds potentially costly repairs are needed in some part of the home, you may be able to negotiate for a lower home price. You can also ask a seller to fix certain things before you agree to move in.

A home inspection report does not guarantee seller cooperation though, so you may want to have a home inspection contingency in your purchase offer. This contingency allows you to back out of the purchase transaction if you are dissatisfied with the results of the home inspection report.

Home inspection vs. appraisal

Home inspections and appraisals are often mentioned in the same context. Inspections are recommended and appraisals are usually required by your lender. Both are included in the closing costs of buying a home. But they have very different goals and consequences.

A home inspection records issues and potential issues with a home’s structure, systems, and interior and exterior aspects. A home inspection informs the buyer of the condition of the home they are considering purchasing. It can give you an idea of how much work you may need to do on a property and can warn you if there are things that may be potentially dangerous or costly in the future. Home inspections are recommended to help a buyer make an informed decision about the major investment that is buying a home.

Where a home inspection focuses on the condition of the home, an appraisal focuses on the value. Lenders require an appraisal of the property to confirm that the value of the property aligns with the loan amount the buyer is borrowing. This tells the lender whether or not the property value is enough to act as collateral for the loan itself. An appraiser evaluates the fair market value of a home by considering the condition of the home, its location, the land it sits on, and the value and/or sales price of other homes in the area.

Home inspection FAQs

Can a home fail an inspection?

No. Home inspections are not pass/fail examinations. They are simply objective observations of the condition of the home. They do not determine the value of the house or whether it is up to code, they just record the current state of the house. The impact the report has depends on the buyer.

What is included in a home inspection report?

The scope of the report depends on the home inspector, the size and structure of the house, and the accessibility of various components. You can find sample reports on the International Association of Certified Home Inspectors website.

Are home inspectors licensed?

Whether or not a home inspector is licensed depends on the requirements of the state in which they are located. Many housing-related regulations such homeowners insurance and home inspections vary by state. The American Society of Home Inspectors lists state-by-state regulations on its website.