Exactly how important is a Home Inspection?
Should a buyer get a home inspection before the purchase of a new home? Should a seller do a home inspection before putting their house on the market? As real estate professionals we should always say yes and demonstrate the advantages for both buyers and sellers.
For the most part, today’s home inspections consist of a visual examination of both the physical structure and major systems of the home including: interior and exterior walls, ceilings, floors, decks, plumbing, electrical, heating and air conditioning, exterior covering (siding / roofing), insulation, ventilation and foundation. A home inspection is not to be confused with an appraisal or an effort to validate the value of a home. The other thing to remember is it is not a pass/fail exam. Simply put, it is a third-party inspection of the home that will result in a report on the physical condition as well as suggest repairs.
Home Inspections for Buyers
Home inspections are more common for buyers because it is usually included as a clause in the written offer that makes the home purchase contingent upon the findings of the inspection. Now, if a serious problem is found, it allows room to renegotiate the purchase price or “opt-out” of buying the home altogether. What dictates a serious problem? A serious problem is considered re-negotiable when the problem is latent and/or a safety or health issue. Beyond latent defects, health or safety issues, renegotiation or walking away is uncommon in most transactions. Lastly, if the listing agent did their work, 9 times out of 10 the seller would have disclosed anything major.
The biggest advantage to having a pre-purchase home inspection is that it offers the new buyers an opportunity to become more familiar with the home they are about to purchase and learn about the proper maintenance to help in its upkeep. It is also recommended that buyers be present during the home inspection. This gives the buyers an opportunity to observe the inspection; ask questions about the condition of the home; and receive an objective opinion DIRECTLY FROM THE INSPECTOR, not second hand from a real estate agent or attorney.
Home Inspections for Sellers
For sellers it is all about gaining control. Conducting a home inspection (or pre-listing inspection) before putting the home on the market puts the control back into the hands of seller.
Keep in mind that when the buyer inspection finds problems, it can impede negotiations and end up costing the seller more in repairs. By having a pre-listing inspection, the seller can help eliminate any surprises after an offer has been accepted. Furthermore, the seller making repairs before placing the home on the market could possibly increase the value of the home.
A pre-listing inspection can also serve as a great marketing tool. In our state (and most states), sellers are required by law to disclose any known defects in the home. Having a pre-listing inspection report available for buyer’s examination tells them that the seller has nothing to hide and can relieve the seller of certain liabilities.
If major problems are found during the pre-listing inspection, it gives the seller an opportunity to disclose the problem up-front, making it less likely for the buyer to pull out of the deal or try to renegotiate.
For the buyer or the sellers, knowing the true condition of a home can bring peace of mind and lubricate the rest of the transaction.