Home Inspection: What is Covered What Isn’t?
Real estate is a great investment, if done properly. But as with any investment and any purchase, if you don’t do your homework, you could end up with a dud, one that costs the earth, depreciates rapidly, and gives you more sleepless nights than passive income.
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One of the most important parts of the home buying process, and one that can provide some stability and assurances during this difficult time, is a home inspection. A home inspection is important for all real estate, whether it’s your first home or your tenth investment property. It can be expensive and it’s an additional expense you’d prefer not to have, but it’s one that often saves more than it costs.
With that in mind, just what does a home inspection report include, what does the process entail, and are there any things that it doesn’t cover?
What is a Home Inspection?
A home inspection is a completely unbiased report on the condition of a home. If you’re buying a new home, you need to hire a home inspector to check for things you might have missed, issues that you’re simply not qualified to spot.
You’re more than capable of telling whether the doors are hanging off or the house is overrun with mold, but what about potential problems involving the water heater or the septic system; what about interior plumbing, carbon monoxide complications, damaged shingles, and other safety issues?
An inexperienced visual inspection only takes you so far; for everything else, you need certified home inspections.
Average Home Inspection Checklist
The inspection process may differ depending on the company performing the inspection, the buyer requesting it, and the house in which it will take place. However, there is usually some consistency across the board and certified home inspectors will generally abide by a checklist similar to the one outlined below:
- Structural Components: This is perhaps the most important part of the home inspection process. The inspector will look for foundation and structural issues, including sagging, bowing, breaks, and other potential flaws. If left unchecked, you could be purchasing a house that is uninsurable and will cost you thousands to maintain. The inspector will cover the exterior and interior of the house and will even check crawl spaces.
- Systems: The inspector will check to confirm that everything is in working order, from the garage door to the septic system, HVAC system, electrical panels, central air conditioning system and heating system. Although issues here are rarely disastrous, they can be costly to remedy and it’s important for the home buyer to be informed.
- Safety Issues: The health and safety of the homeowners is of paramount importance. The home inspector will check to make sure that gas and electrical systems are working; fire escapes are functional, and both sprinkles and fire alarms are operating as they should. Potential problems can include dangerously high levels of carbon monoxide, broken shingles, and more.
- Basement and Attic: Is fungus growing in the attic, is there mildew in the basement? A quick visual inspection is usually all that’s necessary to spot issues here as they know what to look for. They will also look for visible insulation, making sure the home is properly prepared for harsh weather.
- Plumbing: From poorly maintained kitchens to toilets and bathrooms in serious need of renovation, plumbing issues can require a massive expense on behalf of the home buyer, so the inspector will check these closely.
A home inspection costs between $200 and $400 on average. However, the price you pay will depend on a number of factors, from your state and the inspector used to the size of the house. The bigger the house and the greater the square footage they need to cover, the higher the cost will be.
What’s Not Included
Generally, a home inspector will not look for any of the following issues:
- Pests (termites, cockroaches, ants, etc.)
- Swimming Pools
- Asbestos and Radon
- Lead Paint
If you have reason to believe that there may be an issue with any of these areas, you can consult with a specialist to provide a quick overview of the home. It’s not something you should do just for the sake of it, as it will greatly increase the cost. However, if you have any reason to believe there is, or could be an issue, it may be worth considering. If nothing else, it will give you some peace of mind.
Is a Home Inspection Mandatory?
You don’t need to pay for a home inspection if you don’t want one. Your lender will ask you to cover the cost of an appraisal and this will be used to ensure the home is worth what they are lending you. However, a detailed home inspection is not necessary for this process and it’s entirely up to you whether you want to perform one or not.
How to Find an Inspector
First-time home buyers may feel a little lost when it comes to the lengthy and costly process of buying a home. However, if you take things step-by-step and don’t feel pressured to move quickly, you can get through with your sanity intact. To find a capable home inspector, try the following options:
- Ask Your Real Estate Agent: Real estate agents aren’t always the best people to speak to when you need advice, as their goal is to sell, not to inform. However, they also have some invaluable experience and will know many inspectors who can perform the role.
- Check the American Society of Home Inspectors: The American Society of Home Inspectors, or ASHI for short, is a list of trusted, certified home inspectors. With the ASHI, you’re always guaranteed a capable, honest inspector who provides good value for money.
- Ask Family and Friends: If you know someone who has bought a house, then ask them which inspector they used and what sort of experience they had. Providing the inspector is certified and follow the strict standards of practice, they can provide the help you need.
Can a House Fail an Inspection?
A house cannot fail a home inspection. It is not an appraisal and the goal of the inspector is not to say whether the house is worth the price that you’re paying. That’s what the appraisal does.
The inspection, on the other hand, is simply there to highlight issues that need to be addressed, after which the onus is on the buyer to determine the best course of action, whether that be negotiating a discount or accepting the issues and planning ahead to fix them.
Benefits of a Home Inspection
A Realtor is not best positioned to tell you what’s wrong with the home. Not only are they trying to sell you the house, but they’re also not qualified home inspectors and even if they were, they haven’t performed an inspection. In other words, they don’t know what those issues are and you can’t rely on them to provide you with key information about the home.
The same goes for the sellers. They may seem honest, discussing minor issues here and there during the walk-through, but their ultimate goal is to sell you the home and get as much money as they can.
A home inspector will give you an honest, unbiased report on the state of the home, offering all the following benefits:
It Could Save Your Life
Every year, as many as 30,000 Americans are injured as a result of carbon monoxide exposure in the home, and around 500 of these die. Several thousand more lose their lives in house fires, and that’s before we consider the potential mortality rates associated with faulty appliances and countless other issues that occur in the home.
A home inspector can spot issues that could lead to major complications in months or even years to come, potentially creating a safer home for you and your family. For peace of mind like that, the cost of a home inspection seems like a valuable and minor investment.
It Allows you to Negotiate
Just because an inspector finds a few issues, doesn’t mean your choice is to either give up on the house or pay full price for something that is inherently flawed. Instead, you can use the issues that the inspector finds to negotiate a reduced purchase price with the home seller.
If, for instance, the inspector informs you that you’ll need a new central air conditioning system and septic tank, while also fixing some leaky faucets and insulation issues, you can get a quote from an expert and ask for a reduction of the same amount, using this quote as basis for your request. You’re not trying to turn a bad situation into a good one, as some sellers may believe. You’re simply adjusting your price so that you’re not out of pocket when the deeds are transferred to you.
It Gives you an Escape
Imagine the scenario: You are a first-time buyer and have just fallen in love with a house. It’s at the very limit of your budget and it’s also a little old and dilapidated, but you love it so much that you simply can’t give it up. Your head is screaming at you to back away, but your heart has already committed.
If an inspector finds water damage, major issues with air conditioning and cooling systems, and potentially costly structural faults, your heart will begin to side with your brain and you’ll have the “out” that you so desperately need.
Peace of Mind
You can’t put a price on peace of mind. For the majority of Americans, a house is the single most expensive purchase they will make in their lives. It’s something they spend an average of 14-years saving for and something they steadily repay over 20 to 30 years. That’s a huge investment, and if there is a cloud of uncertainty hanging over it concerning its true value, you may feel anxious about making the commitment.
These anxieties will peak during the lengthy home buying process, but if you have that inspection in the bag you’ll feel more at-ease about the whole process and will be confident that your investment is safe.