What is escrow?
Learn what escrow is and how it works before you start shopping for your new home. Escrows protect your money during the homebuying process.
Ashley Eneriz
Home inspection checklists for buyers and sellers
A home inspection gives the buyer one last opportunity to back out of a deal before the sale goes through. Sometimes called a mortgage inspection, it can make or break the sale of a house.
This resource explains what a home inspection is, how much it costs and what inspectors look for. Keep reading for some buyer’s checklists and a seller’s to-do list.
A home inspection is the part of the homebuying process where a buyer hires an objective third party to evaluate the quality of a house, condo or mobile home. A home inspector looks for structural damage, general issues, safety problems and anything that might cost you money in the long run. Major components, like the home’s HVAC, plumbing, electric, roof, foundation, structure and floors, are the primary things home inspectors evaluate.
Most inspectors recommend that homebuyers are there in person for the inspection. This is so buyers can ask questions in real time and have a better understanding of the home’s condition.
After the home inspection is complete, the inspector provides a written report of everything they found. If it reveals the need for expensive repairs, that will likely factor into the buyer’s final decision.
A typical home inspection costs between $200 and $500. A recent HomeAdvisor survey found the national average is $339.
The size of the home and type of property are the biggest factors that impact your cost. Inspections for smaller houses (between 1,000 and 2,000 square feet) cost around $315. For homes larger than 2,000 square feet, the cost is closer to $400 (or more).
Inspection costs for condos and mobile homes are usually cheaper — between $200 and $250. New construction home inspections are around $400.
Additional inspection items outside of what your lenders require increase costs. For example, if you have a tree close to your home, you could pay for a specific inspection on the foundation to ensure the roots have not damaged it. Radon testing is another popular add-on that is not required.
These additional inspections can cost anywhere between $150 and $1,000 per test. We recommend talking with your general inspector to see if they think it’s necessary before ordering one.
In general, a home inspector is looking for anything that might cost the buyer a lot of money down the road — specifically health, safety and mechanical issues.
The main things that inspectors look for are foundation or structural problems, HVAC issues, electrical or plumbing problems and evidence of damage. This includes looking at the roof, crawl space, basement, attic, pipes, grading, insulation and wiring.
According to the American Society of Home Inspectors (ASHI), the inspector evaluates “readily accessible, visually observable, installed systems and components.”
The inspector is obligated to describe the following in their home inspection report:
It’s worth noting that inspectors generally don’t look for pests, although they will note damage that appears to be caused by pests. The same goes for landscaping and appliances. You must hire another professional if you want these looked at.
We’ve compiled a list of some of the things buyers should consider during a home inspection. Bear in mind that this list is not exhaustive and should not replace the checklist provided by your inspector.
As a seller, it’s your job to prepare your home for inspection. While you don’t have to move everything out of the way, you want to give the inspector as much room as possible to do their job. If they can’t complete the inspection, your sale could fall through.
Here are a few things you need to do before your buyer’s inspector comes.
As a buyer, you have some choice in who your inspector is. We suggest looking for full-time inspectors.
As you compare companies, make sure they’re bonded and insured and ask how long the inspection should take — if it’s less than two hours, they might not be as thorough as they should be.
Here are some more tips for finding the right home inspector:
A home inspection report includes a summary of the findings and specific descriptions of issues with images and an outline of the potential impact. While a thorough report can seem overwhelming at first, it’s pretty simple to read if you don’t let yourself get bogged down in the details.
First, look at the primary recommendations, or summary, section. This is where you find information about significant problems, such as mold, water damage and electrical issues.
Things like broken window screens or other small changes are also noted, but you shouldn’t be too worried about minor problems. Many inspectors will color-code issues to let you know what’s a safety concern, what needs maintenance but not immediately, and what works the way it should.
If there are more problems than you anticipated, ask your real estate agent what your repair request options are. You might want to consider a home warranty, especially if it’s an older house.
A home inspection usually takes between two and three hours. If you have a larger home or want other inspections done, it could take longer, depending on the season. It usually takes a few days to get the full home inspection report back.
The buyer usually pays for the home inspection. This is because this entire home inspection process is designed to protect the buyer, not the seller.
A home inspection contingency is when you put an offer on a house with the understanding that you will only purchase it if it passes inspection. With a contingency, if the home's condition isn’t up to the buyer’s standards, they then have the legal right to back out of the sale or negotiate repairs.
Home inspectors aren’t supposed to move furniture or major appliances around to evaluate them. Home inspectors also can’t tell you how much a repair would cost or who to call for help.
Buyers aren’t required to be at the home inspection, but they should attend if possible. This allows the buyer to see the inspector perform the inspection, ask them questions and make sure nothing is missed.
Lenders don’t always require a full home inspection. Usually, a home appraisal — not an inspection — is required before a mortgage company or other lending institution will agree to approve a loan. However, certain types of government home loans do require it.
Home insurance companies often utilize a “four-point” inspection to determine risk. Home insurance inspections focus on:
A “full” home inspection goes a bit deeper than the typical four-point inspection used by insurance underwriters.
Home inspections usually occur after the seller accepts the buyer’s offer but before the two parties have closed on the house. In general, the buyer should schedule the inspection as soon as they’re under contract to buy the home.
Even though lenders don’t always require an inspection, many buyers think it’s worth it. Home inspections may seem expensive, but they can save you thousands of dollars down the road.
One of the major advantages is that you can get a home inspection contingency, which gives you a chance to learn about existing and potential issues before you close on the sale of a property.
Plus, an inspection makes you more informed about the condition of the house you’re buying. If you’re going to drop a good chunk of change on a purchase, you should know exactly what you’re buying — this is why a home inspection matters.
Learn what escrow is and how it works before you start shopping for your new home. Escrows protect your money during the homebuying process.
Ashley Eneriz
Earnest money, also called a “good-faith deposit,” is an upfront payment the buyer puts down before closing. It shows they’re serious about an offer.
Diana Flowers
Learn how to identify real estate companies and landlords that are committed to fair housing practices and why it matters for your next home.
Ashley Eneriz
Wondering what the best time of year to buy a house is? Use our guide to learn more about the process and seasonal considerations.
Josh Richner
Ginnie Mae is a government-owned company that makes it easier for lenders to give affordable home loans to underserved communities.
Jennifer Schurman
Eminent domain is the power of a city, state or federal government to take ownership of your property for public use. Read about how it works.
Emily Moore
We’ll start sending you the news you need delivered straight to you. We value your privacy. Unsubscribe easily.