In my opinion, every buyer should have a home inspection unless you plan on tearing down the property and building something else in its place. A home is typically the largest investment of a person’s life, and you want to make sure that you know exactly what you are getting into. It’s a little scary to think that, just a few years ago, buyers had to waive their home inspection contingencies in order to actually get the home. The market has normalized, and now most sellers allow buyers to conduct not only home inspections, but radon, mold, and lead-based paint inspections. I want to talk a little bit about what to expect during a home inspection, and give you my tips on how to get the most out of the experience.
A home inspection is a thorough visual survey of a property’s structure, systems and site conditions. This includes looking at exposed plumbing, electrical systems, heating, air conditioning, appliances, doors and windows, fixtures, exterior construction including roofing, siding and structures like fences, decks and sheds. The inspection is limited to items that are easily observed; you cannot damage the property (like removing a section of the wall) to view visually obstructed areas.
A basic home inspection does not usually include testing for mold, radon, lead-based paint, soil content, termites, asbestos, well water or septic readings. These tests may be available through the inspection company for an additional fee, since they usually involve taking samples and having them sent out for analysis. That being said, if a home inspector sees evidence of termite damage, mold, a crumbling foundation, etc., during his routine inspection, he will mention it and recommend further testing by a specialist.
I recommend hiring a professional home inspector who is ASHI certified to help find issues with the property. This is definitely a time where quality counts, so don’t just pick someone because they are the cheapest guy in town. Your realtor should be able to recommend a reputable home inspection professional, or you can go to www.ashi.org and find a list of certified home inspectors in your area.
A typical home inspection contingency period is about 7 days in the DC Metropolitan area, although the timeframe is negotiable. This means that within 7 days from the date of ratification on your contract, you will have conducted the home inspection and given notice to the sellers about how you want to proceed. Although this sounds like a short period of time, home inspectors often work on short notice. There are many inspectors who will conduct weekend inspections. Some charge a slightly higher fee for a weekend, and some do not.
I encourage home buyers to attend the entire inspection in order to see issues for themselves, ask the inspector questions, and to learn how to maintain their homes. An inspector will give you a written report of what he finds, but it’s a good idea to bring pen and paper to write down any extra bits of information. A home inspection lasts approximately 2-4 hours, depending on the size of the home and how much you engage the inspector in conversation. A good tip is to wear comfortable clothing, because you will be on your feet most of the time, and you might want to see areas that require you to climb a ladder or crawl on the ground. Other helpful items you can bring are: snacks to help with your fatigue, a measuring tape to measure for draperies or other improvements, and a digital camera. This may be one of the last times you enter the home before your pre-settlement walk-through inspection, so make the most of it!
I go to every home inspection, whether I represent the buyer or the seller. It amazes me that most sellers’ agents don’t do this for their clients. I think it’s important to see any issues for myself, and ask the professional about them (Is this a major issue? What needs to be done to correct the problem? How much does it normally cost to fix?). That way, I can explain what something is to the seller before we even get a copy of the home inspection from the buyer’s agent. Otherwise, a seller may just get a list of items to fix with vague descriptions like “O-ring needs to be replaced.” (An O-ring is a little rubber ring that acts as a seal, often found in plumbing fixtures and other mechanical items). I have learned a lot from the many inspections I’ve attended and that, in turn, helps me see potential problems when I’m showing homes to buyers.
When the home inspection is over, the inspector will give you a written report. Some inspection companies have a standard form template which they fill in by hand. Other inspection companies can email you a typed report with digital pictures. The content may be the same, but the one with pictures may be more useful when identifying issues.
Your realtor will review the home inspection report with you and help you make a decision about how to proceed. In the DC metropolitan area, you have several options:
1. Cancel the contract. Depending on what was previously agreed to in the contract, you usually have the opportunity to void the contract after conducting the home inspection (as long as you are within the contingency period). Be careful when writing a contract for a home that’s being sold “As-Is.” If you agree to take the home “As-Is”, but want the option of canceling the contract if the home inspection turns up something you are not prepared to handle, make sure your agent writes that into the offer (before it is signed by the seller). When voiding a contract based on the home inspection, you do not have to state a reason, but you must give a copy of the inspection report to the seller. Consult your Realtor for more information.
2. Provide a list of items to the seller to fix. This is the most common response. Your inspector will give you a report of the issues he found in the home, and you and your Realtor can decide which items to ask the seller to correct. In the DC Metropolitan area, our contracts have a property condition paragraph which states that certain items (heating, cooling, electrical systems, plumbing systems, appliances, smoke and heat detectors) MUST be in normal working condition as of the possession date. If you are using the MAR contract, these items include mechanical systems (although mechanical systems are not defined, realtors interpret it to cover windows and doors). Notice the property condition paragraphs do not mention roofing, structural issues, safety or code violations. Any issues outside of the property condition paragraph must be negotiated with the seller. Be clear about what you are asking for. If it is important to you that a licensed contractor correct a specific problem, state that in your response. Also remember that just because you ask for something, doesn’t mean you will get it. You might provide the seller a list of 10 issues to correct, and the seller may come back and say they’ll only fix 3 of them. You can keep countering back-and-forth until an agreement is reached. If no agreement is reached, consult your realtor about your options to void the contract. You can also ask for a combination of having the seller fix certain items and receiving a credit.
3. Ask the seller to give you a credit to fix the items yourself. If you prefer to receive money instead of having the items corrected by the seller, you have the option to ask for a credit. CHECK WITH YOUR LENDER FIRST BEFORE ASKING THE SELLER FOR A CREDIT. Some loan products do not allow you to receive an additional credit. If that happens, there are usually ways to work around it. You can ask the seller to reduce the price by the amount of the credit.
There are different strategies when it comes to negotiating home inspection items. My advice is to be fair. No home is perfect. There will always be something that needs some attention. Hopefully, you and your Realtor will negotiate and achieve a result that you will find satisfactory and that will make you happy.