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Home Inspection: Find Out What an Inspector is Looking For

Whether you’re a buyer or a seller, the home inspection can make you sweat. Before you get too worked up, take a deep breath and realize that a home inspection isn’t a pass or fail thing. In fact, no home inspection will yield perfect results.

But some inspection reports are more concerning than others, and it’s important to know if an issue is a minor repair or a money pit. Here’s everything you need to know about home inspections!

What Is a Home Inspection?

Home inspections are a vital part of the home-buying process because they help the buyer avoid any surprises with the home they are purchasing. A home inspection includes an evaluation of structural elements, electrical features, plumbing, and heating and cooling systems.

A qualified home inspector will look for any health and safety problems, as well as any positive or negative property conditions. When the inspection is complete, the home inspector will provide a written, comprehensive report that details any issues with the home.

A buyer would be crazy to skip the home inspection. That’s why a good real estate agent will make sure it is part of the home-buying contract.  

How Much Does a Home Inspection Cost?

The buyer pays for the home inspection. The cost can vary, but the U.S. Department of Housing and Urban Development estimates that it may cost a home buyer $300–500 for a home inspection. That may sound steep, but paying a few hundred dollars is worth it to avoid a costly surprise down the road!

Home Inspection Red Flags for Buyers

If you’ve been searching for your dream home, there’s nothing like the relief of finally being under contract. Now the only thing standing between you and your perfect place is the home inspection. And frankly, you’re a little nervous. What if it flunks the test?

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Whether or not your new home gets a passing grade is up to you—not the home inspector—because you’re the one holding the purse strings. So what are some inspection issues that should make you think twice? Here are five signs your dream home may be more of a curse than a blessing.

Buyer Red Flag #1: Outdated Electrical Wiring

With today’s families using more gadgets than ever, it’s important to ensure your home’s electrical system isn’t past its prime. An upgrade may be due if your home inspector finds overloaded outlets or a panel that’s wired with too many circuits. Pay close attention to aluminum wiring if it shows up on your home inspection report. It was used between 1965 and the mid-1970s in place of copper, and it poses a dangerous fire hazard due to the potential of overheating at connections.

Buyer Red Flag #2: Foundation Damage

Do you remember the parable about the wise man who built his home upon the rock? If there’s one lesson we learned from that story, it’s that your foundation counts! Every home experiences some degree of settling. A qualified home inspector can tell you when a seemingly minor crack spells major trouble. Watch out for bulging or bowing foundation walls, which is a sign of structural weakness that can be expensive to repair.

Buyer Red Flag #3: Septic Tank Failure

If your new home comes with a septic tank, make sure trouble isn’t bubbling below the surface. A septic tank that fails can cost thousands of dollars to replace. That’s a stinky way to start life in your new home! Foul odors, slow or gurgling drains, and standing water are common symptoms of a septic tank that needs TLC.

Buyer Red Flag #4: Water Intrusion

Water is often called the source of life, but it can wreak havoc when it creeps into places it shouldn’t. Your home inspector should investigate any water stains to determine if there’s an active leak and to check for the presence of mold. A brown spot on the ceiling, for instance, may indicate a faulty roof, while stains on basement walls can clue you in to drainage issues—and neither are a cheap fix.

Buyer Red Flag #5: Mold

A home plagued by mold isn’t just gross—it can affect your health. You can typically clean up areas of mold that cover less than 10 square feet on your own without breaking the bank. But extensive growth requires professional help. The cost of removing mold from crawl spaces, walls and ducts can easily be thousands of dollars, depending on the scope of the damage.

See a Red Flag in Your Home Inspection?

Just because your home inspector uncovers an issue doesn’t guarantee the seller will fix it. Ultimately, you decide whether to walk away or negotiate with the seller, and a lot of that depends on your budget and willingness to take on a major home improvement project.

An experienced real estate agent can help you navigate the findings and set priorities for moving forward.

Home Inspection Tips for Sellers

If you’re selling a home, you may think that home inspection red flags don’t apply to you. While you may not be weighing pros and cons of repair items like potential buyers, a surprise at that point in the process can wreck a deal. And once you’re under contract with buyers, do you really want to go back to square one because a patch of mold or an electrical issue sent the buyers running?

After working so hard to attract buyers with a move-in-ready home, the last thing you want is to lose a sale because your home inspection turns up a red flag. So, what’s a savvy seller to do?

Shawna Smith, a real estate Endorsed Local Provider (ELP) in Louisville, Kentucky, offers some simple suggestions for surviving the home inspection with your pride—and price—intact.

Seller Tip #1: Know What You’ve Got Before You Go to Market

Surprises are great—just not when they show up on a home inspection. That’s why Shawna says it’s a good idea to get your own pre-sale inspection before planting the for-sale sign out front, especially if your home is in questionable condition. A qualified inspector should perform a four-point inspection of the roof, HVAC, basic electrical, and basic plumbing to avoid a lowball offer out of the gate.

“Make sure you keep good maintenance records on your mechanicals , plumbing and electrical repairs, and you know the condition of your roof,” Shawna says. “The seller does have to either disclose or repair any issues found during the pre-sale inspection, but it allows you to decide if you will price your home as-is or to make repairs to get it closer to market value.”

If your listing agent doesn’t offer a pre-inspection option, be prepared to deal with costly repairs or to lower the price if major issues are uncovered when the buyer conducts their inspection. You may find yourself having to wait until you can afford to fix the problem areas before your home can sell at the price you need to move on.

Seller Tip #2: Know When to Fix Your Fixer-Upper

So how do you know which repairs are necessary to close the deal? The buyer’s appraiser may require certain improvements for the sale to go through based on the buyer’s loan and the value of your home. A seasoned real estate pro can help you make the call, but a few key areas take priority.

The same areas a home inspector evaluates—electrical, plumbing, roof and HVAC—are the ones you may have to prioritize when it comes to repairs.

“The electrical, plumbing, roof and HVAC should be in good working condition when a property is transferred,” Shawna says. “I always recommend hiring licensed professionals for these types of repairs so the buyers will feel confident about the condition of their new home.”

A major fix may feel out of reach if your money is tied up in equity, but you can still bring options to the table. Why not work with your agent to gather a few professional quotes for the repair and offer cash at closing or a discount on the sales price to cover the cost? Giving the buyer a choice is always a winning approach because they like having control over the outcome. It also shows you’re willing to meet them in the middle.

Know Who to Call for Advice

Whether you’re buying or selling a home, a less-than-perfect home inspection certainly complicates things. After all, it’s difficult to tell when to spend the money to fix an issue and when to negotiate a compromise. That’s why you need an experienced agent who can guide you through the rough patches and help you come up with a solution.

Looking for a high-octane real estate agent who can help you buy or sell a home? We can connect you with the top real estate pros in your local market!

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners. Learn More.

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