Real Estate Home Inspections 101

A home inspection is a critical part of every real estate transaction. Performed by a certified inspector, the goal is to examine the condition and safety of a property. You'll need one when you're buying a home.

What to Expect in a Basic Home Inspection

1. Exterior Evaluation

An inspector looks at the property's foundation to assess its structure. They also evaluate the construction of the floors, ceiling, and walls to analyze the home's structural integrity. Additionally, the inspector takes notes on the state of the roof (tiles, flashings, and gutters), and the condition of the home’s trim, doors, windows, driveways, landscaping, fencing, and outdoor drainage. 

2. Interior Evaluation

The inspector moves inside to make sure everything is functional and up to code. This includes:

  • Electrical and Plumbing: Inspectors test electrical and plumbing throughout the home by flipping switches to make sure lights and fans are operational. They also flush toilets and turn sinks, tubs, and showers on to ensure they operate and drain properly. Lastly, they verify that the electrical box appears sound and look for any wiring red flags. 

  • Systems, Components, and Appliances: The inspector tests all the foundational systems, components, and appliances that will convey (or transfer to the new owner) with the home. They check items like built-in microwaves, dishwashers, garbage disposals, air conditioners, furnaces, water heaters, and smoke and CO2 detectors. The inspector also examines ductwork as well as fireplaces and chimneys. 

  • Garage and Attic: The inspector looks at the condition of the ceiling, verifies that the garage is appropriately fire safe, looks at garage door alignment, and evaluates ventilation and insulation in the garage and attic.  

What Does a Home Inspection Cost, and Who Pays For It?

The Department of Housing and Urban Development (HUD) reports that a home inspection for a single-family property costs between $300 and $500 on average. Your location and the addition of any specialized components — like a pool or termite inspection — can impact the cost. These fees are not regulated.

It’s most common for buyers to pay for the home inspection. However, as with most things in real estate contracts, who pays for the assessment can be up for negotiation. Sometimes buyers and sellers split costs, and other times, sellers cover the entire cost of the inspection.

What Happens After the Inspection?

The goal of a home inspection is to make sure all of the critical components of the home are in good working order. After the inspection, the inspector provides buyers and sellers with a written report that includes notes on the condition of the home and all evaluated items. The report also includes a detailed explanation of anything the inspector believes requires repair or remediation. Next, one of three things happens.

  1. After the inspectionBuyer terminates the agreement: A termination is uncommon, but it does happen. The buyer can bail out of the sale if they're not happy with the inspection results.

  2. Buyer accepts the property as-is: An as-is sale most commonly occurs in a competitive market, when a buyer plans to flip the property, when repairs are minimal, or when a buyer wants to close quickly. 

  3. Buyer requests repairs: In most cases, we land at option three. The buyer will work with their agent to create a request for repairs, which is sent to the seller’s agent. Then, buyers, sellers, and agents work together to negotiate a mutually agreeable path to close.

How Do Repairs Work?

Sellers can do one of three things. They can do repairs themselves, pay to have professionals handle repairs, or offer a concession (or credit) to help cover the repair cost after closing. No matter which path they choose, the buyer has to agree before the contract can move forward.

Concessions can be a great tool for sellers, especially if the needed repairs require highly subjective design decisions. By offering credit, sellers don’t have to source workers and choose materials, and buyers can control the outcome of the project. 

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