Understanding the Property Inspection Report for Your Home Purchase
Once the purchase contract is finalized and signed, the homebuyers are normally entitled to a professional inspection of the property.
Certain new construction developers will restrict or prohibit such inspections, and instead issue a warranty. However, you should never surrender this right to inspection easily.
The professional inspection is an optional, but highly recommended exercise — especially for first-time home-buyer. The lender’s appraisal cannot do what the professional inspection can accomplish. This article reviews two elements of the professional inspection:
- Inspection Report Content
- Inspection Results
Inspection Report Content
Unlike an appraisal, the professional inspection focuses on the property’s functional and structural worthiness. The inspector is not concerned with the property’s market value. Rather, the inspector examines how well the property should and does function.
The inspection will provide a thorough check-up of the property and its condition, and compile it into a useful report. The inspection is worth the investment, as it reports on the following elements:
- Needed repairs
- Structural integrity
- Functional stability
- First-time buyer’s introduction to homes
- Future obsolescence
Needed Repairs
First of all, the inspection will uncover any items that may need repair, urgent or otherwise. The inspector will look for everything from malfunctioning sockets to stuck doors. Subsequently, these repair requirements can then be written into the purchase contract by your attorney.
Structural Integrity
The inspector will examine the building’s structural integrity. The inspector will especially analyze the foundation, flooring, walls and roof to determine if there are any severe defects that may threaten the building.
In some cases, the inspector may find structural defects that the sellers probably did not realize were there. Such findings can allow you to back out from a potentially terrible mistake.
Functional Stability
The inspection also reviews the functional aspects of the home. When the typical homebuyer purchases a house, they expect the plumbing, heating, electrical and other related systems to work adequately.
An important part of the inspector’s routine will be to test all of the outlets, faucets, sinks and other housing elements that need to function effectively. Again, any malfunctioning items can be negotiated into the contract as items that must be repaired prior to the closing.
First-Time Buyer’s Introduction to Homes
A very helpful element of the inspection for first-time homebuyers is the chance to learn how housing elements are supposed to work.
Do you know how to start a furnace or light the pilot light safely? Can you find the fuse panel or circuit breaker panel in case of a short circuit? Do you know where to go to shut off the water pressure?
You should accompany the inspector so as to learn these important responsibilities, unbeknownst to most apartment dwellers. Such emergencies are inevitable. It’s a good idea to know how to handle them.
Future Obsolescence
Lastly, the inspector is able to project future needs. Although different parts of the house may be currently acceptable and functional, they will not stay that way without proper maintenance. Even with good maintenance, certain elements will still need to be eventually replaced or upgraded.
The inspector can provide you with projected life expectations of the different parts of your house, such as when you will need the furnace or roof replaced. This will allow you to better plan for such long-term contingencies.
Inspection Results
Most homebuyers will find the inspection report highly invaluable. Some inspectors will also warranty some of their findings, at additional expense.
As noted above, you can negotiate with the seller to repair or account for defects discovered by the inspector. The seller will usually repair those items prior to the closing or establish an escrow at the closing, whose funds will be used for repairs.
Note, however, that you when you buy a $10,000 home, you should expect a $10,000 home. Renovation or bargain specials offer discounted prices for a reason — they need work. In such cases, the cost of those repairs are already factored into the purchase price and even the most astute investors will have a difficult time “squeezing blood from a turnip.”
Many such real estate are marketed and sold “as is,” which means that no adjustments are considered.
The typical professional property inspection normally cost about $250 to $500, depending on the size and scope of the property. The homebuyer will be responsible for arranging these inspections, and the inspector collects their payment immediately.
The actual inspection will take anywhere from two to six hours, again depending on the property. The inspector will then compile a detailed report, along with recommendations and, when applicable, a warranty.
If you wish to further minimize your expenses, you can always befriend a structural engineer or architect to do you a favor in exchange for a pizza and a six-pack.
Go to next HomeBuyer Guide chapter: “15. Loan Processing”
