The Finance Blogger

Home Inspections

Home InspectionsSellers hate them and buyers have a love / hate attitude towards home inspections. Home inspections are an excellent addition to the real estate business over the last few years. They really do help the industry at large and even sellers deep down can appreciate their value in many situations. Sellers don’t like them because they are afraid they will identify major issues that could jeopardize the sale. Often there are surprises that the seller is not even aware of, which can save the buyer thousands of dollars.

Buyers  have a love / hate attitude home inspectors.  Consumers like the idea that the home inspector will identify issues that can save them money. Also identify issues that they need to focus on in terms of renegotiating their offer. Buyers who are emotionally attached to the house they are looking to buy, are afraid that the home inspector will identify issues that could break the deal. They understand it is for the best for them. However they would really prefer that the home inspector does not find anything. In addition that the deal will proceed as offered.

Home Inspections – What is the Process

You are ready to make an offer on an existing home and your real estate agent is talking about conditions that you need to add to the offer. Come on you just want to get on with the deal and buy this house. You are hoping that the seller will accept your offer so that you can move into the house of your dreams!

Well you should listen to your real estate agent. He or she is doing his job of protecting you against making a bad deal. One of the conditions he or she should be adding to the offer to purchase is the plan to ask for a home inspection that will be completed by a home inspector at your cost. You are already spending enough money and now you have to shell out more to pay for a home inspection! The answer is yes and you should.

Save Money

Numerous buyers have been saved thousands of dollars by getting home inspections completed. The inspector may find issues with the home which might cause you to walk away from the deal or they might allow you to negotiate a better price.

The process is that you make an offer with a home inspection as one of the conditions. The home inspector goes into the home you are intending to buy, completes the inspection and provides a copy of the report  to you and your agent for review. If issues are found, he will hi-light these items and it is up to you how to handle them. Your agent wants to see you protected, while at the same time he does not want to lose the deal. Most likely he will try to seek a middle ground to have the buyer and seller absorb some of the costs associated with what ever issue the home inspector has found.

Now you get to negotiate with the buyer regarding who will pay to fix the problems and ultimately it comes down to how much you want this particular house vs. the cost to fix whatever problems he might have identified.

What Kinds if Issues Might an Inspector Identify

A good inspector is going to check everything associated with the house. He will include the foundation, the construction, wear and tear on the building. Also any areas that might cost you money in the foreseeable future. The condition of the roof, the siding, the windows, the insulation, the wiring, the furnace, the air conditioning and much more. While you are caught up in the emotion of buying a new home, the home inspector will conduct his review in a business like manner. He should also prepare a report for you to review.

For example, he may review the condition of the roof and conclude that you will need to replace the roof in five to 10 years time. He might note if there are any serious issues with the roof at this time. This information is crucial, since now you know that you can expect a large expense in 5 to 10 years time when you replace the roof. This is an example of how one are might be identified. He will also tell you for example that  the furnace is ok or it is on its last legs. If it is on its last legs you can try to negotiate a lower price for the home to cover the cost of the furnace replacement. A home inspector can save you thousands of dollars.

Next Steps after You Receive the Home Inspection

Once you have received the home inspectors report, your next step is to either accept the results and waive the conditions. Or walk away from the deal or try to negotiate a revision to the original offer you made. A reduction in price would help pay for some of the repairs that you will need to make. This is were the value of a home inspector really comes in and saves you potentially thousands of dollars.

Once you have agreed to waive the conditions or have negotiated a final deal, the next step is to close the deal. Accept the keys along with the debt  etc. Your home inspectors report is an excellent guide to the maintenance that you are going to have to do. Also a useful planning tool to help you plan financially for all of the repairs and / or upgrades that are needed. Some of these conditions that you have absorbed can be worked into the mortgage financing. However it will take a creative real estate agent to assist you with this negotiation.

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