A home inspection is an evaluation of the current condition of a structure and its systems. If you’re just starting the homebuying process, it may surprise you to learn that a home inspection is not required to take out a mortgage.
In a seller’s market, some buyers will even consider forgoing the inspection to make their offer stand out. However, a home inspection is an important tool to protect yourself from making a bad investment.
If you’ve recently found the home you want to buy, conducting a home inspection can feel like another hurdle to jump through. But an inspection is an important step in the homebuying process.
During a home inspection, a certified inspector will evaluate the property for potential problems. That person will do an honest and thorough inspection of the property and report their findings and recommendations.
Once the inspection is finished, you’ll receive a written report that you can review with your real estate agent. Depending on the inspector’s findings, you may decide to proceed with the sale as planned, ask for repairs or a lower price, or back out of the sale altogether.
Note
Be sure to include a home inspection contingency in your contract with the seller. This contingency allows you to back out of the sale based on the findings of the home inspection without losing your earnest money.
A home inspection is a visual inspection of a property to identify any potential problems. It usually takes between two to four hours to complete, depending on the size of the house. Once the inspection is over, the inspector sends a report summarizing their findings and recommendations.
In most cases, the homebuyer is responsible for finding and scheduling a home inspection. The exact cost will vary depending on the size and condition of the house but will typically range between $300-$500.
When inspection day arrives, the inspector will start by evaluating the home’s structure and foundation. They’ll look for problems with the walls, floor framing, and window alignment. They’ll check to see that the electrical system is up to code and the heating and cooling systems operate efficiently.
The inspector will also check to see that the fire alarms, carbon monoxide monitors, and sprinklers are working correctly. They’ll also assess the insulation in the attic and look for signs of water damage in the basement.
When the inspection is finished, you’ll receive a written report of the inspector’s findings. This report will give you a greater understanding of the current condition of the home.
Note
A home inspection is an in-depth evaluation of the property, but a few things are not included. If the house comes with a swimming pool, that may not be included in the inspection. And the home inspector won’t check for radon, mold, or asbestos.
A home inspection and an appraisal are similar, but they aren’t the same thing. Both involve evaluating the property, but each is done for different reasons.
Like a home inspection, an appraisal is an important step you’ll need to take when you’re buying a home. But while a home inspection is usually done at the buyer’s discretion, your lender will require an appraisal.
While a home inspection looks at the current condition of the home, an appraisal determines the property’s value. This ensures that you don’t pay more for the house than its fair market value. It also protects the lender because the value of the home is used as collateral for the loan.
Note
By law, appraisals have to be completed by a neutral third party and cannot be connected to your mortgage lender (nor to you or the property).
During an appraisal, a licensed appraiser will assess the property and take note of its condition and location. They’ll compare the house to similar homes in that area to determine the fair market value.
Once the appraisal is complete, you’ll receive a written report of the findings. If the appraisal comes in low, it could jeopardize your ability to buy the house. In this case, you can either contest the appraiser’s findings or agree to pay the difference in financing.
Key Takeaways
* A home inspection is a visual evaluation of the current state of the property.
* Home inspections are not usually required for a mortgage, but getting them is still a good idea.
* A thorough home inspection will help you identify potential problems with the home so you can decide if you still want to buy it.
* Home inspectors won’t look for things like mold, asbestos, or radon, so you may need additional testing for those things.
* An appraisal evaluates the fair market value of the home, and unlike an inspection, it’s required by your lender.
Mildew stains and odors scare buyers, especially because toxic black mold is such a hot topic. You likely won’t even get an acceptable offer if mold and mildew are present. Even if the mold in your house is the normal variety, treat it and address the source of the problem. If it comes up in the home inspection, the buyer might demand professional mold remediation, and that can cost thousands.
Mildew odors signal that a basement is too moist. Buyers and home inspectors will look closely at the walls and floors for patches of mildew and signs of dampness. The inspector might use a meter to determine how much moisture is present in these spaces because moisture deteriorates building materials and attracts insects. Cover exposed earth in basements and crawl spaces with plastic to help keep moisture levels down. Most foundation “leaks” are a result of poor drainage that funnels water towards the foundation.
To address this issue, consider the following steps:
* Make sure gutters are clean so that rainwater flows toward downspouts instead of spilling over gutter sides along the foundation.
* Point drainage downspouts away from the house.
* Check water flow through buried drainage lines by flooding them with water from a hose. If water comes back towards you, the line is plugged and should be cleared.
If foundation problems do exist, and you cannot make repairs, you might need to lower the price of the house upfront, with the understanding that the price reflects the problem. Another option is to give the buyers an allowance to make repairs after closing.
Deteriorated shingles or other roof coverings are one of the first things home buyers and home inspectors notice. If the elements underneath the shingles are moist or rotted, repairs will likely be requested. Some states require a separate roof inspection. Make sure flashing around the base of the chimney is watertight, and that mortar and bricks are in good condition. Inspect the fireplace to make sure it is functioning properly.
Fix leaks long before the home inspection takes place. The inspector will check water pressure by turning on multiple faucets and flushing toilets at the same time. The inspector will also run the dishwasher. The home inspector might check the septic system. One method uses dyes that are flushed down a stool. The inspector waits to see if the dye surfaces on top of the septic drain field, which would indicate a drainage problem.
The electrical panel and circuit breaker configuration should be adequate for the needs of the house. Depending on the code, these systems change over the years, especially with older homes. The inspector will look for receptacles with ground fault circuit interrupters (GFI) in bathrooms and kitchens.
These receptacles contain mini-circuit breakers that click off during a short circuit or overload. The home inspector will likely make sure the receptacles are what they appear to be, and not “dummies” that aren’t wired correctly. The inspector will test a portion of the remaining receptacles in the house.
The home inspector will check the heating and cooling systems, making sure they work and commenting on their efficiency.
The home inspector will take a close look at the structure and foundation.
The home inspector will check appliances that remain with the house, including smoke detectors and carbon monoxide detectors.
Do everything you can to get the house in good condition before you attempt to sell it, but don’t be discouraged if the inspection report contains a few negative statements. Home inspectors make a note of everything they see. All homes have defects.
Remember that the home inspection report is not a wish-list for buyers. Read your contract carefully; it dictates which systems should be in good working order at closing. If the roof is older but doesn’t leak, it’s in good working condition. The same is true for older appliances.
Your contract may also state that you are under no obligation to make any repairs at all, although the buyers can then likely withdraw from the contract. Don’t feel you must comply with unreasonable demands for repairs.
You’ve made an offer, the seller has accepted, and now it’s time for the home inspection. The purchase agreement has been signed, and the funds are in escrow. During the home inspection, the inspector will attempt to find as many defects as possible in the home’s roof, floors, walls, windows, and structural support members.
After the inspection is done, you can begin to make repair requests with the seller; you generally can’t start making requests before that. Once you have the inspection report in hand, you can ask the seller to repair the items/situations found. They may agree or decline; or, in some cases, they might offer you “repair credits” instead. These essentially lower the selling price, giving you more cash to do the repairs yourself once you own the home.
Learn more about serious issues to look out for, tips for making requests after a home inspection, and the different ways to pay for repairs.
Key Takeaways
* In most cases, home inspections are done shortly after a homebuyer’s offer is accepted.
* The buyer has to decide which issues warrant a repair request with the sellers, and which they’ll ask for cash for, handle themselves, or let slide altogether.
* There are certain repairs that are mandatory for sellers to fix, including issues related to safety.
* Sometimes, buyers are better off asking for cash credit on a repair item instead of asking the seller to replace or repair something.
Serious Repair Requests To Watch For
Your job as a buyer is to figure out which issues warrant a repair request with the sellers, and which you’ll ask cash for, handle yourself, or let slide altogether. However, if serious issues are found on your home inspection, you should request repairs from the sellers.
Some of the more severe issues you should keep an eye out for in your home inspection report include the following.
Ungrounded Wiring
Homes built before 1960 often have ungrounded wiring and polarized receptacles. These are two-prong outlets that come with a higher risk of electric shock than current standards allow.
There’s nothing bad about ungrounded wiring, but it’s not a good idea to plug sensitive electronic equipment such as computers or televisions into an ungrounded outlet, or appliances that draw a lot of power, such as microwaves or newer refrigerators.
If a home you’re looking to buy has ungrounded wiring, you might want to request it be rewired before closing. If the sellers don’t agree, you could consider a newer property with modern wiring instead.
Galvanized Water Pipes
Most homes built before 1970 have galvanized steel pipes. Minerals in the water supply can cause a buildup inside these pipes over time. This buildup could become a problem if you notice low water pressure. Galvanized pipes can also rust and leak.
Many homeowners don’t replace galvanized pipes; they repair them when they leak. It’s not unreasonable to ask a seller to repair a leaking galvanized pipe. You may also ask them to replace all galvanized pipes with copper, CVPC, or Pex, although they might be less likely to take on such a large project just before moving out.
Orangeburg Sewer Pipes
Ask your real estate agent whether other homes in the neighborhood have had Orangeburg or “tar paper” sewer pipes. Orangeburg pipes are common in homes built between 1945 and 1972. These pipes can absorb moisture and become distorted, causing poor flow and other issues.
You can hire plumbing specialists to insert a camera down the sewer line to look for tree roots or to find out whether the sewer line is Orangeburg. If so, these types of pipes last about 50 years before they disintegrate. They can also cause a need for thousands of dollars in repairs if a pipe should burst.
When having your home inspection done, you can also ask for a sewer inspection. Replacement of sewer lines is expensive, but it’s an item many sellers will replace if asked.
Roofing Issues
If roof issues crop up during your inspection, you can certainly ask for them to be repaired. Usually, sellers will get a roof inspection when these requests are made. These are conducted by a roofing company and are designed to find any issues with the roof, its materials, and its features, such as ridges, caps, and pipes. The roof inspection will give you a complete estimate of the damage and costs to repair.
If the roof needs a full replacement, there’s a chance the seller will replace it or have it replaced under their homeowners insurance policy. Sometimes, they will offer cash credits instead.
Note
Once the repairs are made, the roofing company will issue a roof certification to show that it’s in good condition.
HVAC Systems and Water Heaters
Age is a good indicator for determining when heating and cooling systems should be replaced. The average life expectancy of a central A/C unit is usually 15 to 20 years.
Be wary if a system is nearing its age limit. If your home inspector notes a unit’s old age on your report, have it inspected by a licensed HVAC professional to make sure it’s up to snuff.
It’s not unusual for a buyer to request new systems, but they’re expensive to replace, so keep that in mind if you intend to request a full replacement.
Mandatory Repairs After a Home Inspection
After a home inspection, there are certain repairs that are mandatory for sellers to fix. They include issues related to safety, such as structural damage, mold, and fire code violations.
Important
If you’re a homebuyer, getting a professional home inspection is an important step in the process. Home inspectors are specifically trained to find deficiencies in residential properties. They can also advise you as to what deficiencies are most important or pose safety issues.
Some of the most common mandatory repairs include:
* Water damage
* Mold
* Fire or electrical hazards
* Chemical hazards
* Pest infestation
* Structural hazards
* Building code violations
If your home inspection report notes issues in those areas, it is the responsibility of the seller to fix them.
Tips for Successfully Making Requests for Repairs After a Home Inspection
When it’s time to make repair requests, you’ll generally want to focus on the bigger-picture items. Remember that sellers are on their way out of the home (they may already have a new one), and they probably don’t want to put much time or cash into a property they’re just about to leave. They may also be on a tight timeline.
Here are some general tips for making repair requests as a homebuyer.
Consider Which Repairs the Seller Should Handle
Remember that the sellers will be responsible for any repairs that are crucial to health and safety. But beyond that, how can you know what types of repairs to ask for?
If you’re not sure, you can always ask your real estate agent. They should be able to help by letting you know what typically happens in your local market.
Keep in mind that sellers don’t have to agree to any repair requests. In fact, if it’s a seller’s market, and there are a lot of buyers vying for the property, a seller may reject the requests altogether.
Note
Consider asking the seller to pay for a home warranty. Home warranties cover major defects for a year and provide added peace of mind.
Determine What Is a Need and What Is a Want
While there might be a lot of changes you’d like to make to the home, take a step back. Read through the inspection report, and begin to separate out what is a need and what is a want.
Needs are things that must be addressed during the homebuying process to ensure the house is safe and habitable. Wants are things that can probably wait a while—like a new water heater.
It’s not a great idea to make repair requests for items that could have been easily noticed during your initial walk-through of the home, such as cracked sidewalks, a bad paint job, or uneven floors.
Get Relevant Quotes and Estimates
When making decisions about repairs, it’s a good idea to get a variety of quotes from experts to get an estimate on costs. Your real estate agent can likely point you toward reputable businesses in your area.
Whether the seller ends up making the repairs or you do as the buyer, knowing what to expect from a cost perspective can help.
Approach the Requests for Repairs Carefully
When it comes time to make repair requests, approach the sellers carefully. Keep in mind that they may not have been aware of the repairs that need to be made. They are not required to cover anything that isn’t mandatory from a safety perspective.
Being respectful when requesting repairs from the sellers can go a long way.
Know When To Walk Away
Keep in mind that the seller is not responsible for covering every single repair request you may have. But if they are refusing to cover the costs of important repairs—such as electrical hazards or pest infestation—it may be time to walk away from the sale. You deserve a safe place to live, and if the seller isn’t willing to give you that, it’s likely best to look elsewhere.
It also may be time to walk away if the home inspection report reveals an extreme number of hidden problems. You didn’t know about these issues when you agreed to purchase the home, so you may be able to exit the agreement if you have a home inspection contingency.
Note
A home inspection contingency is a clause in the purchase agreement that allows the buyer to back out of the sale if necessary due to the results of the inspection report.
Understanding Cash Credit vs. Repair
Sometimes, buyers are better off asking for cash credit on a repair item instead of asking the seller to replace or repair something. The seller has no vested interest in the home after it’s sold, and they might not hire the most qualified contractor or do the repair in a manner that’s satisfactory to the buyer.
Sellers may have different aesthetic tastes and standards from yours. If it’s important to you to have something repaired or updated a certain way, you may want to wait and handle it yourself.
Ask your lender whether a cash credit is allowed before asking for one, and work with your agent to determine the best strategy for working with the home’s sellers. The current market, the condition of the home, and the exact sellers you’re working with will all play roles.
If the credit is approved, it can work in a few different ways. The seller may pay some of the buyer’s closing costs, so the savings can be used to make repairs, or the credit can be included in the final sales cost, which gives the buyers more time to pay off the repairs.
What is a cash credit?
A cash credit is a way a home seller can pay for home repairs for the buyer without actually having the work done themselves. They may apply the credit to the final sale price or pay some of the buyer’s closing costs so that money can be used for repairs.
What do you do if the seller refuses to make the requested repairs?
The right way to handle a seller who won’t make requested repairs depends on the type of repairs they are refusing. If they refuse to make mandatory safety repairs, you can walk away from the purchase contract. If the repairs are more cosmetic, you may need to make them yourself.
Are any repairs mandatory to make?
Some types of repairs are mandatory for sellers to make after a home inspection. These include issues related to safety, such as structural damage, mold, and fire code violations.
Is cash credit for repairs a good idea?
Seller credit for repairs often benefits both sellers and buyers. It helps sellers move forward with selling their home without having to spend time making repairs on a property they are leaving. And it helps buyers make the repairs they want and need, in the way they want.