It can cost anywhere from $200-$500 for a home inspection, depending upon the type of property you are buying and where it is located. In attempt to save money, many new homeowners forgo the inspection as a way of reducing closing costs. This can be a bad idea – pound for pound, a home inspection is one of the most valuable services when you’re purchasing a new home.
A home inspection is your last chance to have repairs made before closing
Most existing homes and even many brand-new ones require at least some level of repair. In their excitement to buy a certain property, home buyers often overlook repair issues preferring to move ahead with the purchase as quickly as possible. It’s only after the closing, when moving into the new property, that buyers begin to realize the mistake they made.
One of the advantages of a home inspection is that the property is being carefully evaluated by a trained professional who has no interest in the particular outcome of the sale. He’s going in and looking at the property specifically to find what is wrong with it. And as a professional he’s in a better position to find hidden flaws than most home buyers are.
When those flaws have been identified and documented by the home inspector, you as the home buyer will have an opportunity to have them repaired before you take ownership of the property. It’s much easier to have repairs done in advance of the closing than it is to go back later and have them done after the fact. Once you close, it will usually be too late to have any repairs made by the sellers.
Potential negotiating advantage
An often overlooked advantage of having a home inspection performed is that it can give you some strong bargaining chips in negotiating or re-negotiating the sale price of the property. If your sales contract is contingent upon a satisfactory home inspection and flaws are reported, you can often use this to your advantage.
Repair work can be used to have the sale price lowered, to gain more sales concessions or even to negotiate upgrades in other parts of the property. By forgoing a home inspection you deny yourself the opportunity to have this negotiating power.
Exposing structural flaws
Probably the most important aspect of having a home inspection is the discovery of structural issues with the property. Cosmetic problems can easily be fixed and often for not a lot of money. But structural problems can involve major repairs that will cost thousands of dollars. If these are not discovered prior to the closing your only recourse against the seller will be legal action, and that gets messy. For example: Always check the basement foundation!
Home inspections will reveal structural problems with the property and give you an opportunity to have them remedied before a closing. A $300 home inspection could easily save you $10,000 in structural repairs later on.
Even if you decide that you don’t want to have the seller repair structural problems before closing, it’s still important that you’re aware of these issues before taking possession of the house so that you can make intelligent decisions later on. Any time you buy a home, you have to be fully aware of what it is you are getting into.
A property appraisal is NOT a home inspection
One of the reasons home buyers pass on home inspections is because the mortgage lender will require that an appraisal be done on the property. An appraisal is often mistaken as some form of a home inspection, but the two are only loosely related at best.
An appraisal is a report ordered by the mortgage lender to establish the value of the property. Though an appraiser is required to report significant deficiencies in the property, particularly if they affect safety or livability, the report is not actually a home inspection. In fact, appraiser’s often recommend home inspections if there any open issues in regard to the property.
A home inspection does not involve an assessment of the property’s market value at all. It is completely focused instead on the physical state of the property. The home inspectors job is specifically to identify flaws and deficiencies in the property, and to make suggestions and recommendations as to remedies. Those recommendations often come complete with a cost breakdown that comes in handy when negotiating with the property sellers.
The report will analyze the various components of the property, including structure, mechanical systems and environmental factors. This is a much more detailed report than the appraisal, and prepared specifically for the buyer, not the lender.
As a home buyer, you should not only be interested in the report, but also fully prepared to act upon it by requiring the property seller either to fix any deficiencies in the property, or to offer financial compensation of some sort. Either outcome is a win for you as the buyer.
Did you get a home inspection on the last property you bought, or do you plan to on the next one you buy?