Friday, January 25, 2008

About Home Inspections

Once your offer to purchase has been accepted, a few things must happen relatively quickly, including the home inspection by an inspector hired by the buyer. A home buyer has a period of time, as outlined in the purchase and sales agreement and generally 7-10 days, to have the home inspection performed and then notify the seller of any unsatisfactory results.

There can be several parts to a home inspection, including the general home inspection, well, septic, radon and environmental testing. Depending on the property, the market and your experience in home buying, you may want all or none. I always recommend home inspections, no matter the market or the buyer’s experience. These are the typical inspections:

General Home Inspection. The inspector will:
  • Evaluate the physical condition: the structure, construction and mechanical systems.
  • Identify items that should be repaired or replaced.
  • Estimate the remaining useful life of the major systems (such as electrical, plumbing, heating, air conditioning), equipment, structure and finishes.
  • The inspector may also test for radon in air, if you request.

Well Water. Homes may either be on public water or well water. If there is well water, the inspector will:

  • Test for bacteria in your drinking water and the presence of radon in water, among other things.

Septic. Homes can either be on public sewer or an individual septic system. The inspection is performed by licensed septic inspector, rather than the general home inspector. A septic inspector will evaluate:

  • The use of the current septic system.
  • The condition and performance of the septic system.

Environmental Tests. A home buyer may elect to have a variety of environmental-related tests performed, including lead paint, mold, asbestos, and UFFI (Urea Formaldehyde Foam Insulation). Some home inspectors will test for these items but they may also refer you to other companies. Here are some things to consider if you are thinking about having these tests performed:

  • Expect lead paint in a home built before 1978.
  • Mold is present in every home but people with allergies or with diminished immune systems should be more cautious.
  • Asbestos was a common material found in insulating products and is commonly found in wrapping on pipes and water heaters, in floor tiles, shingles, etc. It can be found in many older homes.

How Much Do Home Inspections Cost? Costs for home inspections vary, depending on the size and type of property as well as the number of tests being performed. Expect to pay somewhere around $300 -$500 and up.

Also keep in mind that the inspector(s) may suggest that you ”investigate” certain items further. For example, an inspector may note that there is a foundation crack. He/she will likely recommend that you have a structural engineer analyze the crack for you and determine if you should be concerned or not. This would be an additional expense.

How to select a home inspector

Check with your agent for referrals. While not all qualified inspectors belong to the American Society of Home Inspectors (ASHI), a national organization that enforces a code of conduct and practice standards, their website,, has a referral service. Your inspector should be licensed to conduct home inspections and should have training and or experience in building and construction standards as well as experience as a home inspector. Here are some questions you should ask:

Ten Questions to Ask Your Home Inspector.

1. What does your inspection cover?

  • The inspector should ensure that their inspection and inspection report will meet all applicable requirements in your state if applicable and will comply with a well-recognized standard of practice and code of ethics. You should be able to request and see a copy of these items ahead of time and ask any questions you may have. If there are any areas you want to make sure are inspected, be sure to identify them upfront.

2. How long have you been practicing in the home inspection profession and how many inspections have you completed? May I have some references?

  • The inspector should be able to provide his or her history in the profession and perhaps even a few names as referrals. Newer inspectors can be very qualified, and many work with a partner or have access to more experienced inspectors to assist them in the inspection.

3. Are you specifically experienced in residential inspection?

  • Related experience in construction or engineering is helpful, but is no substitute for training and experience in the unique discipline of home inspection. If the inspection is for a commercial property, then this should be asked about as well.

4. Do you offer to do repairs or improvements based on the inspection?

  • Some inspector associations and state regulations allow the inspector to perform repair work on problems uncovered in the inspection. Other associations and regulations strictly forbid this as a conflict of interest.

5. How long will the inspection take?

  • The average on-site inspection time for a single inspector is two to three hours for a typical single-family house; anything significantly less may not be enough time to perform a thorough inspection. Additional inspectors may be brought in for very large properties and buildings.

6. How much will it cost?

  • Costs vary dramatically, depending on the region, size and age of the house, scope of services and other factors. A typical range might be $300-$500, but consider the value of the home inspection in terms of the investment being made. Cost does not necessarily reflect quality. HUD Does not regulate home inspection fees.

7. What type of inspection report do you provide and how long will it take to receive the report? May I see a sample report?

  • Ask to see samples and determine whether or not you can understand the inspector's reporting style and if the time parameters fulfill your needs. Most inspectors provide their full report within 24 hours of the inspection.

8. Will I be able to attend the inspection?

  • Being there during the inspection is a valuable educational opportunity, and an inspector's refusal to allow this should raise a red flag. Never pass up this opportunity to see your prospective home through the eyes of an expert.

9. Do you maintain membership in a professional home inspector association? Are you bonded and insured?

  • There are many state and national associations for home inspectors. Request to see their membership ID, and perform whatever due diligence you feel is appropriate.

10. Do you participate in continuing education programs to keep your expertise up to date?

  • One can never know it all, and the inspector's commitment to continuing education is a good measure of his or her professionalism and service to the consumer. This is especially important in cases where the home is much older or includes unique elements requiring additional or updated training.

Renegotiating the Contract. Many buyers attempt to use the inspection to renegotiate the purchase price, which aggravates many sellers. However, if a buyer did his/her due diligence when putting in an offer, then there shouldn’t be too many huge surprises at the inspection and the price should hold. If there are any big surprises, then it is perfectly acceptable for the buyer to request the seller repair the items, reduce the selling price or ask for money in lieu of repairs being made. Getting the seller to actually do the repairs is completely out of the buyer’s control.

As-is Sales and What if the Seller Refuses to Make Repairs? If you’re buying a house as-is, that means that the seller is not making any warranties about the condition of the property. However, that does not mean the seller will not necessarily make repairs or offer to reduce the sales price of the property if a problem is discovered that is unexpected.

For example, a buyer can see for himself/herself that a furnace is aged and that it may have to be replaced. However, if that furnace is only a few years old, the buyer could reasonably expect that furnace to be functioning. Upon inspection, the buyer discovers that the furnace was not installed properly and needs modifications. The buyer can certainly request that the seller make repairs, although the seller may still refuse.

If a seller refuses to make repairs you requested, you have three options:

  1. Continue to negotiate and possibly give them an ultimatum - if you don’t do X, we’re walking. Only do this if you really are willing to walk away from the deal.
  2. Accept the property as it is and buy it, knowing that you will have to make the repairs yourself.
  3. Terminate the contract - you are within your rights to terminate the contract as long as it’s done within the time-frame specified in the contract.

I hope this information is useful to you in your home-buying and home-selling journey. If you have questions about anything in this post, please contact me.

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