Home Inspections And Its Importance For Home Purchases

Home Inspections And Its Importance For Home Purchases

Gustan Cho Associates are mortgage brokers licensed in 48 states

This BLOG On Home Inspections And Its Importance For Home Purchases Was PUBLISHED On June 22nd, 2020

Home inspections are not required by lenders:

  • It is up to the home buyer whether or not to do a home inspection on a home they are purchasing
  • Home inspections normally cost around $300 to $500, depending on the county and state
  • Buyers can check prices on home inspections
  • Since a home will probably be a person’s greatest investment, it is highly recommended buyers spend the money to do a home inspection
  • Home inspectors are professionals who can detect defects with the home.

In this article, we will discuss and cover Home Inspections And Its Importance For Home Purchases.

Issues Home Inspectors Can RevealHome Inspections

There are many issues in the home that is not detectable by the naked eye. This holds true especially when it comes to high ticket repair items such as the following:

  • foundation issues
  • HVAC issues
  • mold
  • termite
  • plumbing
  • electrical
  • insulation
  • other potential defects with the subject property

Just because a home inspector may come up with a bad report on certain issues such as reporting that the roof has only a three-year life span left does not mean that the home buyer should cancel the real estate purchase contract.

Renegotiating Home Purchase Price After Home Inspections

An inspection report may mean buyers can renegotiate the price due to certain problems with the home:

  • It can also alert buyers what types of improvements should be on the radar
  • May need to start saving funds to do the repairs in the near future
  • Inspections may be a way of getting out of the real estate purchase contract if the repairs needed may be too large and intense
  • For example, a roof may not be a big issue where if the inspector recommends a new roof needs to be installed in three to five years
  • However, if the inspector notes that the subject property has major foundation problems and crack foundation walls, this can mean major problems

It may be best to get out of the real estate purchase contract and look for another home.

What Do Home Inspections Cover?

What is renegotiating the price of buying a home after a home inspection

A reputable inspector should carefully examine both the interior and exterior of the home including the attic space, basement, and/or crawl space.

  • Each home is different
  • So the home inspection will differ and vary depending on the type of property
  • In general, inspectors will be examining the foundation of the home, the roof, attic, basement, crawl space, plumbing, electrical, air conditioning and heating systems, insulation of the home, structural components
  • Most importantly, the potential hazards of the home such as potential fire hazards with the electrical and/or HVAC systems, and potential leaks with the plumbing system
  • An inspector is a general inspector and not a specialist
  • If he suspects issues with a particular system such as the well and septic, he may note that on his report that further examination will be required

Buyers then may need to hire a well and septic specialist where further due diligence is required.

Home Inspection Report

After a home inspector has thoroughly inspected the subject property, the inspector will prepare a home inspection report:

  • The report details his inspection and findings in writing with pictures
  • The inspection report is sent to the buyer and the real estate agent
  • Lenders do not get a copy of the home inspection report since the inspection is not mandatory
  • There are times where a home inspection is required by lenders
  • That is in the case where the appraiser notes defects of the property

That is when a lender may require a home inspection.

Home Inspection Contingency

Is a home inspection report necessary?

Buyers will put contingencies when writing up an offer. Mortgage contingencies and home inspection contingencies are very common. Most inspection contingencies are for 7 days from the date of the accepted offer. Buyers normally order the home inspection before ordering the appraisal. This is so in the even if the home has issues that the home buyer does not want to deal with, they can cancel the real estate purchase contract or try to renegotiate the purchase price.  Unfortunately, the home inspection fee will be spent and the buyer will be out of pocket if they decide not to pursue the real estate purchase transaction. However, the few hundred dollars is worth its weight in gold if the home inspector may find major flaws such as foundation damage or mold behind the drywall.