Today, most people include “a satisfactory home inspection” as a contingency to any offer to purchase. There are many benefits to a home inspection. This “jump-out” clause gives the buyer the ability to cancel the deal if something is uncovered with the inspection report and no compromise or remedy can be agreed upon by buyer and seller. According to Bill Loden, President of the American Society of Home Inspectors; 20 years ago only 75% of purchased homes were inspected and today it is 95%.
Eillu, highly recommends a professional home inspection, even if you are purchasing a new home. An inspection provides an objective evaluation of the systems in the home and allows the buyer to learn how they all work together. A home warrantee will offset the cost of future repairs, while an inspection provides the information about likely repairs and maintenance required and any potential system failure.
Buyers must include the inspection contingency on their offer to purchase; it is not automatically part of the offer. Once the offer is accepted, the due diligence period begins. The inspection should be scheduled immediately so the results are available before the due diligence period ends.
Who should get an inspection?
Unless you are an expert builder and knowledgeable about all facets of construction, you should rely on an objective evaluation of the homes major systems and structure, provided by a licensed or certified home inspector. A home inspection provides peace of mind to a buyer that the home is in “working order” or indicates when something is amiss. When an item or system is not in working order, the repair or credit for that item can be renegotiated with the seller. If a mutually agreeable solution cannot be found, then the deal can be voided. The buyer keeps their earnest deposit and will only be out the cost of the inspection.
A seller may want to get a home inspection before the home is put on the market. This will allow the owner to repair any item revealed in the inspection or to adjust the listing price accordingly. The report can also be provided to interested buyers to strengthen the sellers negotiating position or to increase transparency.
Types of Inspections
General Certified Inspector
Most people are unable to assess the condition of the home in a customary walk through or open house. A home may appear move in ready but the inspection goes a little deeper by examining the electrical systems, HVAC, ventilation, plumbing, roofing, insulation and structural integrity of the home that may not be readily apparent to the average buyer.
It is recommended the homeowner attend the inspection. The inspector will typically discuss findings during the inspection and provide tips for maintenance or note any peculiarities. A written report is typically provided within a few days of the inspection. The report may suggest any repairs deemed necessary to bring the home up to current standards. In some cases, the inspection may uncover items that are rather expensive to fix. These may be a deal killer or used to re-open negotiation.
On the other hand, some inspectors are overly critical and point out every minor blemish in the home. No home, not even a new home is perfect. Minor issues that do not require immediate attention or that are cosmetic are not the purpose of the inspection and are likely noted by buyers anyway. A long list of minor items can potentially scare buyers, especially first time buyers, whom do not have the knowledge about typical on-going maintenance required by homeownership and may cancel the deal.
An overly critical Inspector may elaborate on small items like chipped paint and superficial items without providing context to the importance and without regard to the cost to fix. A helpful Inspector should provide context and priority. Critical systems that require repair or impact health and safety should be emphasized; items that are small or easily fixed should be noted but with proper emphasis.
Buyers should be focused on what is important and where the risk is, if any. Depending on market conditions, sellers can lose patience for buyers who are demanding repairs and concessions for minor problems or issues with the home. The seller can deny the buyers requests and also walk away from dealing with the difficult buyer.
Wood destroying organism inspections are usually a separate inspection and are required by the lender. Sometimes the general inspector will have the required license or certification but typically they do not. This important inspection checks for the current presence or previous damaged caused by wood boring insects.
The lender may also require you to have a separate septic inspection to make sure the waste system in the home is operating properly.
In some locations, it is also common to test the well and or oil tank. The quality and longevity of the well can be ascertained and the viability of the oil tank and confirmation that there is no leakage provides assurance to the buyer.
A general home inspector does not cover environmental contamination, pools and spas, detached structures. If the buyer has a specific item of concern, make sure it is brought to the inspector’s attention and included in the written contract provided by the inspection company. You must sign the agreement before the inspection is performed.
What Does a General Inspection Cover
Structural Components (floor, walls, roofs, chimney, foundation)
Mechanical Systems (plumbing, electrical, heating/air conditioning, appliances)
The inspection will only include visible and accessible systems and components of the home. This means the inspector is not expected to move any personal items or do any test that can be destructive to the components. The effort to perform a thorough inspection is entirely in the inspectors hands and the subjective standard of what is accessible can vary from one inspector to the next.
The Inspection is not an appraisal of the property value and its purpose is not to estimate the cost of repairs.
The Inspection is not a guarantee the home complies with current building codes which can be complicated and changed over time. Older construction can be grandfathered rather than comply with changes to the codes.
An inspection is not a guarantee an item will not fail in the future. The inspector can check to see the air conditioning unit is working but cannot tell you the efficiency or how adequately it works.
The Inspector should alert the buyer to any safety issues or concerns present in the home. Specialist are sometimes required when mold, lead based paint or asbestos is suspected.
Support for Appraisal
The purpose of the appraisal is to provide an estimate of the market value of the home. The appraiser does not examine all the working systems of the home, like an inspector does. The inspection report can help support an appraisal of an older home where all systems are working and there is no deferred maintenance.
How to find an Inspector
Unless hired by the seller prior to putting the home on the market, the inspector works for the buyer and should have the buyers’ interest as the only concern. Typically, the buyers pays the cost of the inspector and is responsible for hiring the inspector.
While your Realtor can recommend area Inspectors, you are not limited to selecting an inspector your Realtor recommends. Some people believe an agent has an incentive to recommend “easy” Inspectors to make sure a deal with go through. This short sighted approach would be short lived when issues crop up after the sale. It is in the Agents best interest to protect client’s best interest.
The buyer should do the research to find the best inspector to protect his/her interests and to make sure you have a good rapport. Obtaining referrals from friends, builders and lenders and follow-up on the references to find out how satisfied each was with the job performed.
View a sample report from the inspectors under consideration to determine the level of detail you can expect and how helpful the report is. Some Inspectors include maintenance items you will need to perform annually to keep the home in shape.
Licensure in NC
You can also refer to the North Carolina Home Inspector Licensure Board to determine an Inspectors current standing, qualifications, amount of experience, additional training and compliance with state regulations. Other professional organizations for home inspectors include: American Society of Home Inspectors (ASHI), International Association of Home Inspectors (InterNAHI) and the National Association of Certified Home Inspectors (NACHI).
A home inspector must be licensed by the North Carolina Home Inspector Licensure Board to perform home inspections for compensation. A professional home inspector must satisfy certain education and experience requirements and pass a state licensing examination. Their inspections must be conducted in accordance with the Board’s Standards of Practice and Code of Ethics. While there are minimum requirements for report writing, the results can vary greatly from a checklist to a full narrative report including photographs.
The Inspector is also required to provide a written “Summary” of the inspection identifying any system or component that does not function as intended, or has tangible evidence that warrants further investigation by a specialist.
The summary may also describe any system or component that poses a safety concern. Carefully read and understand the entire home inspection report and follow-up with the inspector with any questions you may have. The report is provided within 3 business days after the inspection. The report is your property and the inspector may not share it with other people without your permission.
Cost of Home Inspector
Home inspections will range in price according to the age, size and value of the home. Do not base your selection of home inspector as the “lowest cost provider”. The saying “you get what you pay for” comes to mind and you want someone who will look out for your best interest not just check the boxes.
Typically, the average cost for a home inspection in the Outer Banks is $300 to $500. The cost will vary depending on the size of the home and the complexity of the systems to be checked.
The buyer is typically responsible for the payment of the home inspection and any subsequent inspections.
Attend the Inspection
Usually, the inspection is performed after you have signed the purchase contract. Make sure to schedule the inspection as soon as possible to allow adequate time for any negotiation and for repairs to be made.
You should always attend the home inspection. The inspector will educate you about the systems in the house, how it should be maintained and what may have been neglected.
Expect to spend anywhere from 2-5 hours during the inspection.
Once you have the inspection done, what now? Make sure your read and thoroughly understand the report and the implications. Contact the inspector for any item that you do not understand.
Consider hiring tradesmen to provide estimates for repairs needed and noted in the report.
Are there any deal breakers in the report? That depends on you. One person who hears, HVAC needs replacement may run, while another with a brother-in-law in the business may embrace it. Another person who hears mold may run away due to allergies in the family. This person may feel that no level of fix or repair will ease their mind.
Any negative results from the inspection can be satisfactory resolved in several ways. The seller may repair the item before closing or the seller can reduce the price or provide a credit for the repairs.
Neither seller nor buyer must do anything. They can walk away from the deal.
A home inspector does not advise a customer whether or not to buy a house. It’s his or her job to provide all the available information so that home buyers can make an informed decision that is right for them and their circumstances