It doesn’t matter if you're buying or selling a property, you’ll likely have to deal with a home inspection. A home inspection is an important part of a real estate transaction. It involves an experienced inspector checking the property’s appliances, electrical system, plumbing, heat and air system, roof, and foundation for minor and major issues.
A home inspection can be a good thing or a bad thing, depending on whether you're the buyer or the seller. As the homebuyer, you should know the overall condition of a property to avoid unexpected expenses after moving in. But as the home seller, the results of a home inspection can make or break the deal.
Most buyers include a contingency in their offer stating the sale is subject to a satisfactory home inspection. If a buyer doesn't like what the report reveals, he has a legal right to walk away from the deal.
Here is what both parties need to know about home inspections.
1. Home inspections are optional
Unlike a home appraisal, which is mandatory by the lender, home inspections are not required. They are, however, recommended by lenders and real estate agents. If you’re buying a property and decide to proceed with an inspection, you are responsible for paying the cost. A property can look pristine on the outside, but have major flaws on the inside. An experienced, competent home inspector will be able to uncover many problems. These inspections are noninvasive, so don't expect your inspector to open up the walls. But even with a non-invasive inspection, he’ll get a clear idea of the home’s condition and bring potential issues to your attention.
2. Be present for your home inspection
As a buyer, you don't have to be present for the home appraisal, but you should be present for the home inspection. At the end of the day, you want to make sure you get your money’s worth. On average, home inspections can costs between $250 and $500. The inspection should spend a fair amount of time checking the outside and inside of the property. These inspections take roughly two to three hours depending on the size of the property. You should shadow the inspector so he can explain his findings to you. Also, don't be shy about asking questions. For example, if you notice a crack in the wall, you can clarify whether the crack is a result of a foundation problem or the property settling over time.
3. Get a home inspection before listing your house
If you’re a seller, there's also the option of having a home inspection before listing your property for sale. A house that looks to be in excellent condition and be anything but perfect. If you get a home inspection before listing the property, you can eliminate surprises down the road. A pre-inspection can provide a rundown of problems with the house, and you can take your time making the needed repairs. Once the repairs are completed, you can list your property with confidence.
4. Negotiating home repairs
There is no such thing as a perfect house. So regardless of whether the house is newer or older, the home inspection report will likely reveal at least one issue. As the buyer, you can ask the seller to repair all or most of these issues. If the seller isn’t prepared financially to cover the cost, you can ask for a credit or a price reduction. The seller can reduce the sale price of the property, or give a credit at closing for repairs.
5. Get quotes before agreeing to repairs
If you're selling the house and eager to move, you might prematurely agree to all repairs on the home inspection report. However, this is dangerous because some home repairs may be more expensive than expected.
After getting an inspection report, the buyer will likely request that you make all repairs. You’ll then have three to five days to decide which repairs you’ll address. During this time, you’ll need to get quotes from contractors. This is important because you don’t want to agree to repairs you can’t afford. If you only have $4,000 set aside for home repairs, and the total cost of repairs comes to $6,000, you can negotiate with the buyer and only agree to fix major problems. Don’t feel as if you have to give into a buyer’s demands. Many homebuyers will start high and ask for everything. But at the end of the day they’re reasonable and willing to overlook a few minor issues.