Buying a home is a big commitment and it’s essential to know what you’re buying before you close. Just as you would read product reviews online before buying a new television or car, you need to do everything you can to understand the condition of the property you plan to buy. That’s where the home inspection comes in.

A home inspection is your opportunity to learn more about your new home, including its livability, safety, and other factors. At SIRVA Mortgage, we often have home buyers ask us about home inspection costs and why a home inspection is recommended. Here’s what you need to know.

Why Is a Home Inspection Necessary?

As you review the costs associated with buying a home, you might wonder if a home inspection is necessary. The home inspection cost might seem like something you can skip if the house appears to be in good condition. Let's talk about why we recommend an inspection.

Safety

The first benefit of a home inspection is that it will reveal potential safety issues. For example, your home inspection can and should test for the following things:

• Radon

• Carbon monoxide

• Mold

• Structural soundness

The last thing you want is to move into a home that's got a potential carbon monoxide leak or a dangerous mold problem. Your inspection will minimize the risks to your health and safety.

Future Repair Costs

Every component in a home, from the roof to the foundation plus appliances and more, has a shelf life. You can't understand the true cost of homeownership unless you have an idea of the condition of each component in the home you're buying.

A qualified home inspector will be able to give you an estimate of when the roof was installed and how old the appliances and fixtures are. Using this information, you'll be able to determine whether immediate repairs might be necessary and get a handle on your potential future expenses.

Negotiations

After you receive your inspection report, you'll be able to review it and use it as a negotiating tool with the seller. For example, if major repairs are needed to the roof or plumbing, you have two options.

1. Make the repairs a contingency of your purchase; or

2. Agree to take on the repairs yourself for a reduction in the purchase price.

Without a home inspection report, you would not have the information or leverage you need to make either of these demands.

Insurance

As a home buyer, you'll be required to purchase homeowners insurance before your closing. Some insurance companies may refuse to provide coverage without a thorough inspection.

A standard home inspection may be enough to satisfy most insurers, although some may require additional specialty inspections to insure you. Make sure to ask your carrier about their requirements.

What is Included in a Standard Home Inspection?

Whether you're buying an older home or looking at newer homes, you should know what is covered in a standard home inspection before you hire a home inspection service.

A good way to understand what is covered and why is to remember the things that are issues to every potential buyer. It's not cost effective for a home inspection service to include elements and tests that don't apply to most houses in their standard service. Here is what you can expect your home inspector to look at:

• Heating, ventilation, and central air conditioning (HVAC)

• Interior plumbing

• Electrical systems

• The roof, attic, and visible insulation

• The interior structure of the home, including walls, ceilings, floors, windows, and doors

• The foundation, basement, and other structural components

You will note some key exclusions here and you may desire to order additional inspections. While a responsible home inspector will mention any potential problem they can see, including termite damage or visible mold, the usual home inspection fee does not include in-depth inspections for these issues.

Your inspector may not be able to access every area of the home and when that's the case, they should note the specifics in the inspection report. For example, if the roof is unstable, they may not be able to inspect it thoroughly.

Additional Inspection Services to Consider (and When to Consider Them)

Now that you understand what is covered by a standard home inspection, let's talk about additional inspection services that are available and when you should consider them.

• Chimney inspection is highly recommended unless the current homeowner can show you that the chimney has been cleaned and inspected recently. You'll need to hire a certified Chimney Sweep Technician to check for proper ventilation, pests, and creosote buildup.

• Roof inspection is also highly recommended for any roof that's more than 20 years old or has visible signs of damage. You may want to ask for a roof certification to itemize necessary repairs and estimate the lifespan of the existing roof.

• Pest inspection is a good idea for older homes and even some newer ones depending on the location. Ask your real estate agent which pests are most common in the area where you're buying. If there is any sign of termites in the area, you should consider getting a thermal imaging inspection to check for structural damage.

• Radon testing is fundamental for the health of your family. The EPA estimates that one in 15 homes has elevated radon levels, and radon has been linked to lung cancer.

• Mold inspection is critical if your home inspector spots any signs of mold and mildew. You'll need to hire a mold remediation specialist, since mold has been linked to allergies and respiratory problems.

• Asbestos inspection is not necessary for newer homes. If you're buying a home that was built before 1980 or the kitchen has 9" by 9" tiles, you should check with your real estate agent to see if asbestos testing is recommended.

• Lead paint inspection is imperative for any house built before 1978, which is when the use of lead paint was banned in the US. If you have small children, hiring an EPA-certified lead inspector will ensure that there's no lead paint on the premises.

• Electrical inspection is recommended for anybody buying a previously-owned home. It's also critical for all homes over 40 years old as well as those with renovations or new appliances installed within the past 10 years.

• HVAC inspection is a good idea if your home inspection company identifies questionable readings from the furnace or central air conditioning system. You'll need to hire a reputable HVAC company to do the inspection.

This might seem like a lot but your real estate agent and home inspection company can help you identify which specialty inspections are needed.

Home Inspection Costs

One of the most common questions we hear from borrowers is about the cost of home inspection, so let's talk inspection fees.

According to Realtor.com, the average cost of a home inspection in the US is between $300 and $500. Additional inspections, such as mold testing or a termite inspection, can cost anywhere from $75 to $600 each, depending on the type of inspection and the size of the house you're buying.

As you might expect, there are several factors that can impact the total cost of your house or condo inspection, including the age of the property and structures, your location, and the square footage. 

Who Pays for Home Inspection?

When it comes to inspection fees, you might be wondering whose responsibility they are. The short answer is that the home inspection is the responsibility of the buyer.

Let's talk about why the home inspection is the buyer's responsibility. The primary reason is that it's in the buyer's best interest to make sure that the house they're buying is in good condition. If the seller paid, there would be a conflict of interest since the seller clearly has a motivation to present the house in the best light possible.

In most cases, the buyer orders the inspection after the seller accepts their offer. Ordering the inspection immediately allows for enough time to get the inspection report, review it, and renegotiate the terms of the sale as needed. For example, you might want to add inspection contingencies to the purchase agreement based on any issues uncovered to allow for a renegotiation of the terms for the seller to make necessary repairs or lower the purchase price in return for taking on the repairs yourself.

What Should You Do if an Inspection Reveals a Problem?

The inspection of your new home has been completed and the report has revealed a problem -- or several. What should you do now?

The answer depends on the severity of the problem, how much it will cost to resolve, and a host of other factors including the housing market in your area, the home's age, and how long it has been on the market.

Sellers are usually willing to negotiate for big-ticket repairs, for example:

• A cracked foundation

• A leaky roof

• Electrical problems

Anything that impacts the safety and livability of the house is going to be required by your lender to be repaired, and should be resolved before you and your family move into the home. The seller may be willing to take care of the repairs themselves. However, you may prefer to negotiate a lower price, so that you can make sure the repairs are completed to your standards. 

Smaller, cosmetic repairs are generally not as important. In some cases, a seller may offer to throw in appliances as a trade. In a hot housing market, you may decide not to make an issue of minor repairs, particularly if the seller has had interest from other buyers.

However, the reverse may be true if the house has been on the market for a while or the market is soft. It's a good idea to get estimates for major repairs prior to negotiating and to get some guidance from your real estate agent. You can use the inspection report and estimates to back up your counter-offer and get the best price possible.

If your negotiations aren't going anywhere -- for example, if the seller isn't willing to budge on the price or you know the repairs are going to be extensive -- you may be able to back out of the sale if you have inspection contingencies in the purchase agreement. It's also important to note that some mortgage programs, including FHA loans, have strict requirements about homes being move-in ready. Make sure you understand those requirements when you review the inspection report.

Conclusion

The cost of hiring a home inspector is something that is well worth paying. As a buyer, you need to be confident that you understand the condition and safety of the house you're buying.

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