Whether you are an experienced home seller or buyer, or a first-timer, the building inspection process always causes some worries. Even with a home in tip top condition, everyone assumes that an inspector is likely to find something. This part of the home selling and buying process is always nerve-wracking. With some preparation, however, we hope you can experience this phase with a little less stress.
Don’t Skip the Inspection
The home inspection part of the process is actually very useful for both the buyer and the seller. Many sellers opt to get an independent inspection done prior to listing their house so that they are aware of any issues, and can make any corrections they may need prior to putting their house up for sale. These repairs or changes can increase a home’s value, just having a professional inspection report in hand is impressive to most buyers.
According to a joint study by the American Society of Home Inspectors (ASHI) and the National Association of Realtors (NAR), nearly four out of every five homes sold in the nation are evaluated by a professional home inspector before they are sold. The Buyer hires the home inspector, and having this important step as part of the purchase contract is meant to protect the buyer.
While building inspectors are not looking for problems with a house, it’s their job to give the property a thorough assessment, from basement to roof, inspecting all the building materials, mechanical systems, and other property functions that affect value and public safety.
The home inspection tends to be the biggest deal-breaker in a real estate transaction, so it’s important that both buyer and seller understand the process fully. Having a qualified negotiator in your corner (your Realtor) is also critical, as often times the deal does not have to fall through if both sides can communicate effectively, and come to reasonable solutions that satisfy both parties.
How a Home Inspection Works
Most home Purchase and Sale Agreements include a home inspection contingency clause. This contingency allows the buyer to hire a professional home inspector, and possibly specialty inspectors such as septic or water, to thoroughly evaluate the property to determine if there are any issues regarding its systems or structure. Once a purchase agreement has been signed, the buyer has a certain amount of time to hire a professional inspector to investigate the property. Both the Seller and the Buyer will be notified of the scheduling of the inspections, however it is mandatory to schedule them during the contingency period as stated in the Purchase and Sale contract.
A typical home inspection lasts between two and three hours. The inspector will physically move throughout the property, checking structural elements, and testing systems. Additionally, specific tests such as radon, or well water conditions may be conducted.
According the American Society of Home Inspectors (ASHI), the 10 critical areas for inspection include:
- Structure
- Exterior Building
- Roofing System
- Plumbing System
- Electrical System
- Heating/Cooling System(s)
- Interior Building
- Insulation
- Ventilation
- Fireplaces
During the Inspection
The building inspector needs full access, without interruption or distraction, to do a thorough inspection. The Buyer typically attends the inspection, and should be free to speak candidly and ask question of the inspector during the process. Additionally, one or both licensed Realtors involved in the transaction will be in attendance.
After the Inspection
Once the Building Inspection is completed, the inspector prepares a detailed report of findings, outlining the detailed finding for each area of the property and any issues that were found. A professional inspector’s report will prioritize problems, prioritizing those needing immediate attention. Inspection reports are the property of the inspector’s client (the Buyer), and become excellent to-do lists for new owners. This report is the property of the buyer/client, and not shared with the seller unless a special agreement is made.
If significant issues are found, the Buyer has the option to walk away from the agreement, or ask the seller to make necessary repairs. This may include a reduction in the sales price, a credit for repairs at closing, or the buyer may request repairs to be made by the seller prior to closing. The Seller may or may not agree to any repairs requested, and therefore the agreement will also fall through unless the Buyer withdraws their requests. Some loan programs require how repairs are handled, so they should be included in the conversation if so. Hopefully, both parties have an experienced real estate broker working on their behalf to help work through this stage, and negotiate for a reasonable solution to keep the purchase contract together.
Finding a Qualified Home Inspector
It’s up to the Buyer to find and hire an inspector. Your real estate agent is a great source for a good referral of home inspectors in the area. They work with inspectors all the time, and know which ones are qualified and knowledgeable in the area and type of building you are selling or buying. To locate a professional Building Inspector in your area, you can also visit www.ashi.org for a full list.