Benefits Of Home Inspections On Home Purchase
This BLOG On Benefits Of Home Inspections On Home Purchase Was PUBLISHED On June 11th, 2019
Home inspections are not a mandatory requirement by mortgage lenders.
- It is up to the home buyer to order a home inspection on a home purchase
- A home is most people’s largest investment in their lifetime
- Average homes in the United States cost $265,900
- It will take most homeowners 30 years to pay off a home loan
- There are certain repairs that may run into tens of thousands of dollars
- Foundations, HVAC, Well/Septic, and structural issues can cost tens of thousands of dollars
- Home inspections can discover most defects on a subject property during a home inspection
In this blog, we will discuss the Benefits Of Home Inspections On Home Purchase.
Appraisal Versus Home Inspection
- Appraisers do inspect the home to see if the items are in working order and safe
- The appraiser will not check to see if there are hidden problems
- Appraisers only check to see that the home meets the safety and functionality standards
- A home inspector will take a few hours combing every aspect of the home
- The inspector will check the longevity of the roof, HVAC Systems, and other hidden issues the home may have
- Unused attic spaces will be checked
- The foundation will be checked for cracks
- The house will be checked for mold and termites
- Once the inspection is done, the inspector will prepare and complete a home inspection report with pictures
The cost of inspections vary. Most inspections cost anywhere between $250 to $500. The fee needs to be paid by the home buyer and is not refundable if the buyer does not proceed with the purchase. There are many benefits to home inspections. Borrowers need to realize that a home appraisal is not a home inspection.
Home Inspection During The Home Buying And Mortgage Process
Once a home buyer finds the home they want to purchase, they enter into a real estate purchase contract.
- There will be a list of contingencies buyers will list on the purchase contracts such as finance contingencies and home inspection contingencies
- The home inspection is done right away
- There is no reason to proceed with the home buying and mortgage process if something is wrong with the home
- The home inspection is ordered prior to the appraisal
- An inspection report normally takes a week from the time it is ordered to the time the inspector delivers the report
- If there are any issues on the report, both buyers and sellers will try to negotiate
- Negotiations may be that the sellers fix the issue and/or a cash credit back to the home buyer
- Or it can be a reduced purchase price
- If there are major issues such as foundation issues or past history of flooding in the basement or other parts in the house, the real estate contract can be canceled
- The earnest money needs to be refunded back to the home buyer
- In a recent transaction, a home buyer did not order the home inspection
- After the closing, the buyer finds out that the basement has flooded due to heavy rains this spring
- This cost thousands of dollars in damages
- The carpeting needed to be torn apart
- Expensive furniture and boxes stored with values were damaged
This is a perfect example of why a home inspection is highly recommended.