Are you a first time home buyer? With so many choices to make and so much at stake, it’s essential that you prepare. For advice, check out the First Time Home Buyer Guide from realtor.com® to learn the 10 steps to purchasing your first home without a hitch.
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A home inspection can be a terrifying process to newbie buyers: What if the house you adore has major problems hiding beneath that shiny new coat of paint? If you lie awake haunted by visions of mold or “foundation issues,” it’s time to take a deep breath. Here’s everything you need to know about home inspections, and how (as scary as they might seem) they exist to protect you from a very bad deal.
Here are some insights into how to make the most of this all-important step. OK, exhale.
What is the Home Inspection Process?
The Inspection Period is the specified amount of time agreed upon by both parties in which the Buyer may examine the property. In Louisiana, this is the “due diligence” period which also allows you to back out for any reason if you find problems with the home that make you uncomfortable.
The time frame selected for the Buyer can range is usually between 10 and 14 days and must be agreed upon by all parties at the beginning of the transaction. The Inspection Period begins when the buyer and seller enter into a contract. The Buyer must accept or reject the property within this period.
Buyers and Sellers should make sure the inspection period provides adequate time for any authentication and/or appraisal process that may be necessary to complete the transaction.
Hire a top-notch home inspector
While it may be tempting to hire any run-of-the-mill home inspector to get the job done—particularly if the price is right—the inspection is no time to cut corners. After all, buying a home is an enormous investment. “Everyone does themselves a disservice when they shop by price alone,” says Alan Singer of Sterling Home Inspections in Armonk, NY. “Plenty of inspectors don’t know what they’re doing and set up shop because it’s easy to do.
So, first, check your local requirements: Many states require an inspector to have a license or insurance, and not having either is a big, waving red flag. Even if insurance is not mandated, you’re better off choosing an inspector who is insured, which protects both of you against errors and omissions. Membership in a professional trade organization, such as the National Association of Home Inspectors, indicate the inspector is up-to-date on the latest developments in the field—another giant plus.
Attend the home inspection
Even though you will receive a written report after the home inspection, you should attend the inspection while it’s being done. It provides a valuable opportunity to learn all about the inner workings of your would-be new home. “I much prefer it when buyers are there so we can discuss the home in person,” Singer says. “It’s much easier to explain the ramifications of an issue when we’re standing in front of it.” Plus, it sure beats deciphering a 10-page report about HVAC or plumbing problems.
So, don’t be afraid to ask questions. Really stick your nose into the home inspection. You and your inspector will be looking at all sorts of things you might have skipped during your showings, like the attic and crawl space, and under the sinks. Don’t be scared to delve into the details. Even the best home will receive a laundry list of to-do’s and potential problems, and fixing them will be much easier with a hands-on understanding of the issues involved. Consider it free (and invaluable) fix-it advice.
Don’t panic (until it’s time to panic)
The vast majority of issues raised during a home inspection are repairable—after all, as Singer describes it, you’re buying a “used home.” Just like a used car or an old computer or second-hand clothing, there are bound to be problems. Some of them may be small and easily fixed, like leaky pipes and rattling doorknobs. But if an inspector discovers a major problem—with, say, the foundation or water intrusion—even that may not be a deal killer. In fact, it could be a bargaining chip you can discuss with the sellers before closing the deal.
Work with your real estate agent to determine the best approach. If your offer was contingent on a successful inspection (and most are), you have a good basis to request that the current owners make repairs before closing. You’ll want to get this in writing, along with provisions if the sellers fail to fix the problems.
But there’s no obligation for sellers to address the inspector’s discoveries. If they aren’t willing to shoulder the burden, you need to assess whether the cost of a new roof—or mold abatement, or fixing the foundation, or whatever the problem is—is worth the reward. With no solution beyond paying $30,000 from your own pocket, you might need to move on to a more habitable home. “People get very invested in the home they want to buy, and it all becomes a very overwhelmingly emotional experience,” Singer says. “But they need to listen to the advice of the inspector, take a look at the financial ramifications, and make a clear-headed decision.”
To Inspect or Not
Home buyers are often conflicted about whether or not to spend the money to hire a home inspector. The responsible answer to this question is… yes, absolutely. Let me say this about cost; the price of an inspection is generally $250.00 – $400.00. Compare that to the price of the house and I would suggest that it becomes fairly insignificant.
However, there are some exceptions to this rule; for example, if the buyer is a general contractor, he might be knowledgeable enough to do the inspection himself, or if the buyer is a professional investor with lots of experience, he may also do well. But, to the average person, buying a home and conducting a formal inspection is a must.
A good home inspector will bring to your attention everything that is wrong with the house so you can handle it accordingly. Then there is the added benefit of being able to use the inspection report to get back to the negotiating table. I have literally saved buyers thousands of dollars in lowered purchase prices using a detailed inspection report.
Hopefully, all will go well and your home inspector will say it’s fine to move in. The lender will then do the next step for you: Order the Appraisal
**Ryan Wheeler is an expert real estate agent and military veteran serving buyers and sellers of homes in the Shreveport Bossier City area. Connect With Me
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