Sometimes, it costs a lot of money to get a good education. At least, that’s true for me – I spent $35,000 to learn that home inspections are important… and that one should pay attention, too.
I hope I have your attention now. Not for my sake, but for yours.
What a Home Inspection Is… and What It Isn’t:
During a home inspection, an inspector should thoroughly evaluate the physical structure of the home as well as critical internal systems. A typical home inspection includes the following:
|● Electrical system||● Plumbing systems||● Heating and cooling systems|
|● Walls, ceiling and flooring||● Windows and doors||● Roofing|
|● Foundation||● Basement||● Attic|
|● Insulation||● Appliances||● Other systems|
There are often a number of additional tests that may be indicated based upon the property location, age, and available public services. These might include:
|● Radon (air/water)||● Septic system||● Lead (paint/water)|
|● Asbestos||● Well (flow/function)||● Water (potability)|
It’s important to understand and accept this reality: an inspection will give you an idea of a house’s overall condition but it might not uncover hidden problems such as pests, mold or other elements that can’t be readily observed. It also won’t turn up flaws in areas that are below ground or otherwise inaccessible to the inspector, like wells, septic tanks, and underground oil tanks.
There are times when a home inspector may identify a condition that merits further investigation by an expert to assess and report back. That doesn’t necessarily mean that the inspector has found a problem but, instead, that they recognize that it’s time to call in a specialist who has the expertise and experience to determine whether there really is something to attend to or if it’s a normal condition. Those specialists, whether you hire them or the seller does, are there to report the truth, allowing you to move forward confidently and armed with information that addresses concerns beyond an inspector’s capabilities.
Why You Should Be Present:
When I say “present,” I mean be there in body and mind. There’s a lot to learn during the inspections if you open your mind to the experience. Incredibly, this group of systems we call our “home” asks a lot of us when we are the ones who are tasked with operating and maintaining it. It turns out that your home inspector is the perfect person to introduce you to all of the components and explain what items need to be attended to and why. By investing your mind in this process, you’ll be far better equipped to keep your new home in tip-top shape as well as manage the inevitable emergencies that arise over time.
How to Find a Qualified Inspector:
I’m admittedly a little biased on this topic: I think that the only people who are truly qualified to perform a home inspection are licensed professional engineers. They have the training and certifications that, in my eyes, allow them to inspect your new home properly. To be fair, though, your Realtor likely has a list of qualified home inspectors, too, and the key in selecting the right one for your home is looking for a professional who is experienced, is certified by one of the national accrediting bodies such as NACHI or ASHI, and up to date on all training and educational coursework.
There are some situations that require specialized knowledge and experience so make sure to do your due diligence if you are purchasing an antique home or a property with unique construction elements. Don’t assume that every inspector has the experience necessary to properly inspect your new home or that they will volunteer that they don’t have any relevant experience of training.
The criterion you don’t want to use to select your home inspector is the price: you want someone working for you who is making enough to do the professional job that you expect from them. In my experience, the spread between the cheapest and the most expensive home inspectors is on the order of a few hundred dollars, at most, and that’s just not enough to justify shortchanging yourself on this critical insight into your home’s condition.
What You Can Do With The Results
The central idea behind doing a home inspection is so that you know what you are buying. Unless you are buying a newly constructed home, there will be blemishes and defects. The question, then, is what do you want to do with the information you receive with your home inspection? Here are the basic options:
- You may find that the home is everything that it was advertised to be and there’s nothing that needs to be addressed. (If so, congratulations are in order!)
- You may discover some items that need to be addressed in order to bring the home up to your standards/expectations. At that point, you’ll work with your Realtor to submit your requests to the seller so that they may consider whether they wish to make the repairs, offer a credit towards your closing costs, or reject your requests.
- You may learn that the home has major problems that you are unwilling to accept, at which point you will rescind the contract and request a refund of your deposits.
What Is A Reasonable Request (and what isn’t…)
You are (likely) purchasing a used home so it’s essential to recognize that some deferred maintenance and/or cosmetic blemishes are a part of the bargain. It’s completely appropriate to request that a roof that has outlived its useful life be replaced. It’s also appropriate to ask for a history of maintenance on the heating and cooling systems, and to ask for it to be serviced if that hasn’t been performed in the last 12 months to ensure that it is functioning properly. On the other hand, asking for minor repairs to be made (items such as trimming shrubs away from foundations, sealing driveways, re-directing downspouts, etc) will likely result both in rejection and resentment – the seller’s refusal creating a barrier to your and their satisfaction with the outcome.
Sometimes, an inspector will point out items that fall into the category of upgrading a property to current building codes. These can include things like GFI outlets, fire-stops between the garage and house, or modifying the plumbing. They are all worthy upgrades but not something you can reasonably expect the seller to accommodate.
My advice is to ask yourself which of the items you identify in the home inspection process are truly essential and which are the kinds of things that you are willing to accept as they are. It’s important to bear in mind that the Contract Inspection Contingency is confined to the structural, mechanical, environmental, and health and safety elements of the home. It’s not intended to compare the home to a brand new property. Putting yourself in the Sellers shoes and asking yourself how you would react to repair requests sets the stage for good faith negotiations. Trust your first instinct – it is most likely the best course of action.
Do You Ask For A Credit Or For A Repair?
The answer is more complicated than it might seem. Here are some of the issues that come into play when your home inspection reveals issues that need to be addressed and how they get paid for.
- The first thing to know is that you can never get cash back from a seller to make repairs on your own. Never.
- If making the repairs on your own is preferred, the way to get cash from the seller is to request a “Seller-concession for closing costs and pre-paid items.” Those expenses which you would normally pay out of your pocket end up being paid by the seller, and that keeps those funds in your account so that you may pay for the needed repair items.
There’s a catch, though: You can only get a certain percentage of the purchase price back and it’s based upon the type of financing (Conventional loans = 3% of the sales price; FHA & USDA = 6%, VA = 4%). That means that the cost of the repairs cannot exceed the amount of your closing costs and pre-paid items because of Rule #1: you can’t get cash back from the seller. So, for most smaller repairs, a seller-credit will work but, if you need a new roof or several items that combined add up to a large amount, that won’t work.
- If you do have the seller make the repairs, you will want to make sure that the work is done properly, with permits, and that any warranties are transferable to you. This is another important point: if the repairs end up as part of the contract (or an addendum to the contract), there will be a requirement by the lender to have the appraiser inspect the property to verify completion of the work. That comes at a cost to you, the buyer, of roughly $175 so make sure that you anticipate the expense and slight additional time required.
The Rest of the Story:
If you are interested in learning more about my expensive education, email (Kit@RightTracFG.com) or call me (860-989-3287) and I’ll be happy to share. It doesn’t show off my intelligence but I definitely learned a life-lesson that can save you money and aggravation.