A home inspection reveals the true market value of a home
No one wants to purchase a home and then later realize that they inherited tens of thousands of dollars (or more) worth of home repairs and maintenance!
Including a home inspection contingency in your purchase offer is critical for helping you to understand the condition and true market value of a home. For every dollar that needs to be put into repairs and maintenance, at least one dollar (or more) should be deducted from home's value.
Budget for home inspection costs at the start of your home buying journey, as this is not something you want to be cheap about. Even if you are buying a newly constructed or recently renovated home, an independent home inspection is still recommended, because not all builders and contractors are created equal.
Here's what a standard home inspection covers
The following is a non-exhaustive list of the areas a home inspector should address, depending on the features of the property:
- Structural Components: Foundation, walls, ceilings, and floors
- Exterior Elements: Siding, exterior windows and doors, garage doors, gutters, and grading around the home
- Roofing: Shingles, flashing, chimneys, and skylights
- Plumbing: Pipes, fixtures, water heaters, sprinkler systems, and drainage systems
- Electrical Systems: Wiring, outlets, circuit breakers, and lighting fixtures
- HVAC Systems: Heating, ventilation, and air conditioning units
- Interior Features: Stairs, railings, interior doors and windows
- Building envelope: Insulation, Air sealing, and humidity management
- Appliances: Refrigerators, dishwashers, ovens, stove tops, microwaves, and clothes washer & dryer
- Safety Features: Fire safety, carbon monoxide detectors, and security systems
Certain items identified in a home inspection report may require more specialized experts to conduct further testing or assessments. These items include:
- Mold and Mildew concerns
- Pest infestations and wood destroying insects
- Environmental hazards such as radon, asbestos, and lead-based paint
- Pool and Spa inspections
- Septic System inspection
- Structural concerns that require the expertise of a structural engineer
Should you include an inspection contingency in competitive offer situations?
When a property is in high demand and has received several offers, removing your home inspection contingency is one strategy that can help make your offer more appealing to the seller. In many cases, a seller will even prefer a lower offer that is "clean" (i.e. an offer with no contingencies) over a higher offer that includes inspection, financing, or other contingencies.
Ultimately, it's up to you to decide how much risk you are willing to take on.
How can you protect yourself without a home inspection contingency?
A pre-offer inspection is an appropriate option when you choose not to include a home inspection contingency in your offer. While you’ll have to pay for an inspection before knowing if your offer will be accepted, paying a few hundred dollars for an inspection fee can save you thousands in the long run.
In these scenarios, you might be limited to an hour or so, and you may not be able to inspect as thoroughly, but at least you should be able to cover the most critical, and costly, areas of the home.
What if the seller has already had an inspection done?
You may encounter a seller that presents to you the results of a recently completed inspection. While you may see this as an opportunity to save a few hundred dollars on inspection fees, I would be cautious about taking the results at face value.
Even if a home seller provides a recent inspection report of their own, I would always recommend to get your own inspection done for two reasons:
- Your home inspector is incentivized to do a thorough job for you because it's good for their business. If they help to save you money, both you and I will be more likely to refer them to future customers.
- Two different home inspectors can produce drastically different home inspection reports depending on how much time they spend inspecting each area and which areas they are told to investigate more thoroughly.
Use a home inspection to be a savvy buyer
A home inspection can save you from costly mistakes and headaches. Unless you are planning to completely teardown and rebuild a home, getting a home inspected should be a top priority when you are planning to buy a home.