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The Business of the Home Inspection and Your Real Estate Purchase

By Eleanor Boschert

Oh, where would you be without a home inspector? One of the key people involved in your real estate transaction, they are responsible for conducing an objective top-to-bottom analysis of a home. What they find can help you avoid surprises and assist you in making an informed decision about your potential new home.

Despite the benefits of home inspections, many states don't require it for purchasing a home. Yet, many lenders, including the Federal Housing Authority, require a home inspection as part of the loan process. Either way, you will be glad you did. Whether a home inspector finds a safety hazard, serious problem, or minor issue, you will have protected yourself from possibly ending up drowning in a money pit of repairs.

Basically, a qualified home inspector will provide you with a comprehensive analysis of a home's major systems and components, both exterior and interior, including:

  • The physical condition of the structure, construction, and mechanical systems
  • The items that need to be repaired or replaced
  • The remaining useful life of the major systems, equipment, structure, and finishes

How to Find a Home Inspector You Can Trust

You are going to want a qualified home inspector who is thorough, professional, and impartial. Not all inspectors are created equal, nor are they all licensed or regulated, so you will need to choose carefully. You're best bet is to check out the American Society of Home Inspectors or NACHI.

What is It They Look For?

A professional home inspector is trained to ferret out a wide range of issues. They look for defects or malfunctions in the building's structure, such as the roof, basement, windows, paint, and foundation. The also can assess for pest infestations and water damage. They inspect all major systems including plumbing, electrical and heating, cooling, insulation and ventilation, and drainage.

While home inspectors are trained in detecting faults - both large and small - they are generalists, not always knowledgeable and licensed in specific areas. You might just want to hire an inspector with specific knowledge of other areas of concern, such as lead paint, asbestos, pests, radon, toxic mold or mildew.

In addition, depending on the inspector, they generally won't inspect appliances such as stoves, refrigerators, dishwashers, washer and dryers. They're looking for issues with the bones and the workings of a home and property.

You should take the two-to-four hours it takes to conduct a home inspection and accompany the inspector throughout a home. Ask questions. Expect honest answers. A good home inspector can explain the severity of any problems they find, advise you on what needs to be done, and provide maintenance tips.

What Happens if They Miss Something Big?

A home inspector gathers information on the current condition of a home. So, if something goes wrong in the future, they are not liable. Some inspectors have a clause in the contract that limits their liability. Some contracts have arbitration clauses that limit your lawsuit ability. Some inspectors carry errors and omissions insurance for if something major goes wrong.

What if They Unearth Too Much?

Typically, an inspection contingency is included in your purchase and sale contract as a condition of closing the sale. Depending on the inspection results, you could:

  • Plan to address the issues yourself and go ahead with the closing
  • Ask the seller to rectify the problem before closing
  • Negotiate your offer amount, deducting repair or replacement costs
  • Withdraw from the deal

Make sure you review the terms of your purchase and sale contract as to what is stipulated about inspection results. You may only have a certain time frame to cancel your contract due to a failed inspection before you are legally obligated to go through with the deal anyway.

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