September 28, 2010

Understanding Home Inspections as a Buyer or Seller

Filed under: Property Inspection — Chuck @ 1:34 pm

Although it is typically paid for by the buyer and conducted for the benefit of the buyer, the home inspection component of every residential real estate transaction is of great importance to both the buyer and the seller. That’s because the observations made by the inspector can have a huge impact on the overall transaction and can trigger other events like repairs or negotiations regarding the final sales price. The results of the inspection can also influence approval of financing by a bank or mortgage lender, so almost everyone involved has a stake in the outcome of the inspection and the findings that are documented in the home inspection report.

In the majority of situations there are only two basic inspections that are required or requested, namely a general inspection and a termite inspection. That’s because most of the time there is no compelling reason to do others that are of a more specialized nature. As a buyer or seller you’ll probably be most interested in understanding those two kinds of common inspections, so here is some information to help describe them.

The Wood Infestation and Termite Inspection

Most lenders require that before they give final approval to finance a home the buyer order one of these inspections and get an official certificate from the inspector that documents a clean bill of health. The so-called “termite certificate” verifies that the home has no problems with termites or other wood damaging infestations. These inspections and reports come from a licensed pest control business, although other inspectors may be licensed to conduct their own wood infestation inspections if they get the proper training.

If the inspector does discover infestation then the buyer and seller can negotiate to have the damage remedied and the house repaired. In that case the seller typically incurs the expenses. Then the house can be inspected again, and if it passes the inspection the mortgage company should be satisfied. But even if you are buying a home without the help of a bank or other lender you should order this kind of inspection. Otherwise you won’t know for sure whether your house is in great condition or if unseen problems are festering and breeding in the woodwork.

The General Buyer’s Inspection

There are two types of general inspections. One is the Limited Visual Property Inspection and the other is a Comprehensive Property Inspection. As their names imply one is more detailed than the other. In fact the Comprehensive Property Inspection is usually also more invasive, because in order to thoroughly examine all the parts of home it is often necessary to remove or take apart a few things in order to gain access to every nook and cranny.

This type of inspection might include digging up samples of dirt around the house, for example, so that the soil can be tested. Or the buyer may pay for the furnace to be partially dismantled so that the inspector can check the heat exchanger, which is a vital internal component of many furnace systems. As you might have guessed these inspections also take substantially longer to conduct and cost more, depending on the size of the house, its age and condition, and what particular systems and features are present.

Meanwhile most buyers elect to have a Limited Visual Inspection done, and that is also the kind of inspection that is normally requested by the mortgage lender. This inspection is non-invasive and the inspector checks for defects in systems or structures that can be readily seen with the naked eye.

The inspector will turn on appliances, for example, if they are on the premises and the utilities are still on, and will report whether or not they are in proper working condition. A report will also offer recommendations for needed repairs. If he or she finds what appears to be faulty wiring, for example, the report will recommend consulting a licensed electrician. Your inspector may suggest calling in an engineer, a roofing company, a masonry contractor, or some other expert as is necessary and appropriate to conduct a more in-depth investigation or to offer bids for repairs.

But as alluded to before, there are lots of different types of rather specialized home inspections. There are inspections that focus primarily on environmental issues, for example, like asbestos contamination or the presence of toxic mold or dangerous levels of radon or carbon monoxide gas. If you have a particular concern or if a general inspection report recommends that you consult one of these unique types of inspectors then you’ll find them to be extremely helpful.

Or if you are buying a foreclosure, for instance, you should order a foreclosure inspection, and if you are buying a brand new house that is newly constructed it is prudent to have a new construction inspection done before you finalize your purchase.

The bottom line is that whenever you’re considering buying a home a qualified home inspector is there to assist you with evaluating the condition of the home. He or she will be one of your best and most helpful and valuable allies, and the price paid for the inspection is a real bargain considering the invaluable reassurance and insight that a good inspection offers to the prospective buyer.

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