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Home Buying

Everything You Need to Know About Home Inspections

We get it . . . the whole home-buying process is a lot—a lot of time, a lot of stress, and a lot of money! If you’re looking for ways to save yourself time and money, skipping the home inspection might sound like a good place to start.

But hold on! The home inspection is actually one of the most important steps. It gives you valuable information about the home you’re planning to buy. And since your home is one of the biggest purchases you’ll ever make, you need all the info you can get.

So, now that you know you need a home inspection, here’s everything you need to know about them.

What Is a Home Inspection?

A home inspection is a strictly visual look at the details of a home that’s under contract for purchase. Home inspections usually happen within 10 days of signing (depending on the details of the contract).

A home inspector will look for any problems and make a note of whether things are in good or bad shape. This includes checking out the structural elements (like the foundation and roof), electrical features (like outlets and lighting), plumbing, and heating and cooling systems.

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Inspectors typically use four basic points to evaluate your home’s structure and systems:

  • Installation: Was it built and installed properly?
  • Maintenance: Has it been kept in good working order and serviced (if necessary)?
  • Safety: Is it operating safely?
  • Performance: Is it working the way it’s supposed to?

When the inspection is done, the home inspector will create a comprehensive written report that lays out any issues with the home. They’ll usually email you the report that same day. If the report shows big problems, you can negotiate a lower price or ask the seller to take care of those issues before the home sale is complete.

coverage for regular home inspections

It’s important to note that a home inspection isn’t meant to identify every potential problem with the home. The inspector doesn’t go into every nook and cranny. They won’t even go into any space that’s locked or inaccessible (but they will note it in their report). An inspector won’t give you an estimate of the value of the home either (that’s an appraiser’s job). The point of an inspection is to give you a better idea of what you’re buying. That way, you can understand the responsibilities you’re taking on and know if you’re getting a good deal.

How Long Does a Home Inspection Take?

While basic home inspections are only visual, they’re still very thorough—including attics, crawl spaces, rooftops and more. Because of how detailed inspections are, they often last anywhere from four to five hours, depending on the size of the home and its features.

Are Home Inspectors Certified?

There are certification requirements for home inspectors, but they vary from state to state. Some states don’t require a license, and others do.

In Ramsey’s home state of Tennessee, for example, inspectors have to be licensed by the state. Plus, inspectors have to meet specific requirements to get their license—like getting at least 90 hours of training, having professional liability insurance, and carrying $500,000 of general liability insurance.1 Hawaii, meanwhile, has no statewide license requirements.

There is an industry-wide test for inspectors called the National Home Inspector Examination® (NHIE), though. The NHIE is seen as the national standard, and 35 states use this exam as part of their license requirements, including Tennessee (states may also have their own tests).2

And even in states where licensing isn’t required, the NHIE is still a recommended certification. In fact, home inspectors can’t be admitted into industry organizations like the American Society of Home Inspectors if they haven’t passed the NHIE.

In other words, watch out for inspectors who don’t have a basic certification like the NHIE.

Where Do I Find a Home Inspector?

Finding a home inspector can be as simple as looking online. Inspectors work independently or as part of a larger inspection company. Be sure to look at ratings to see what actual customers think of these inspectors and companies. You can also ask family and friends who’ve recently bought their house for recommendations.

While your real estate agent is extremely helpful in virtually all steps of the home-buying process, things can get a little dicey when asking them for home inspector recommendations.

Your real estate agent might also be able to give you some home inspector recommendations. But always make sure to do your own research too—that way, you can avoid a bad situation with an unsavory home inspector. You don’t want an inspector who’ll ignore potentially dangerous problems just to make a buck.

If you want recommendations from your agent, make sure they give you at least three names to choose from. That way, there’s still room for competition and finding the best fit without any hints of your agent possibly playing favorites.

No matter where you find your inspector, always ask to see sample reports before you commit to anyone. Those samples will give you a good idea of how the inspector works, what they look for, and how thorough they are.

Should I Be There During the Inspection?

While you’re not required to be present during the inspection, most real estate agents recommend you stick around. Not just for safety reasons, but because the inspector can talk you through the problems as they see them and answer your questions right then and there. You’ll also want to be there in case you forgot to unlock an area of the house or have stuff in the way. Your real estate agent might even tag along on the inspection too.

You should really see the inspection as an educational opportunity. New homes don’t come with an owners manual like a toaster or a car does. So, an inspection can kind of act as basic instructions on how to operate your new home—where the meters are, the location of the fuse box and their individual functions, that kind of stuff.

How Much Does a Home Inspection Cost?

Most of the time, the buyer pays for the inspection. It’s just the cost of doing business. Sometimes, the price of the inspection is built into the closing costs. In other situations, buyers have to pay for the inspection up front, but the cost is subtracted from the closing costs later.

Sellers can also pay for their own separate inspection before they list their home for sale, but it’s not required. We’ll talk more about this type of inspection a little later.

The price can vary depending on where you live, but the U.S. Department of Housing and Urban Development (HUD) estimates a home inspection will cost a home buyer $300–500.3 That may sound steep, but paying a few hundred dollars is worth it to avoid a costly surprise down the road!

Keep in mind, the HUD estimate is a range of the average price of a basic home inspection. Based on where you live, you might have to add extra parts to an inspection—like checking for water damage in a flood zone or earthquake reinforcement in California. These inspections take more time, so they cost more money. The size of your home can also impact the cost, since larger homes take more time to go through. The same goes for additional freestanding structures, like a detached garage.

There are also specialty inspections. These are the “extra credit” items that aren’t usually included in the normal inspection process. For example, if you want your home to be inspected for radon, the inspector may need to take extra steps—like sending a sample to a lab or calling another inspector who’s an expert in that field. Specialty inspections can add anywhere from $25–200 more to your bill.4

Examples of specialty inspections include:

  • Sewer or septic
  • Stucco
  • Chimney
  • Environmental hazards (mold, formaldehyde, radon, etc.)

As we said earlier, home inspection costs can vary between states. Each state has different requirements and costs of living that impact the final price of a home inspection.

average inspection cost by state

The trick when it comes to inspection pricing is being prepared. When talking to an inspector or an inspection company, always ask for an estimate up front based on your square footage. Give them as much detail about your house as you can (how many rooms, types of systems, any freestanding structures, if you’d like any specialty inspections, things like that).

Here’s the bottom line: You get what you pay for. Just because an inspector is the cheapest doesn’t mean they’re the best. Some guy might charge you only $200, but his inspection could only last an hour or two because he’s trying to cram as many inspections into his day as possible. You want an inspector who’s fully focused on your home.

Plus, you want someone with experience who knows what they’re doing—and it’s worth paying a little more to get that.

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?

Now, whatever the inspection turns up, ultimately the decision is up to you—not the home inspector—because you’re the one who’s deciding whether to buy the house. 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:

Outdated Electrical Wiring

With today’s families using more gadgets than ever, it’s important to make sure your home’s electrical system isn’t past its prime. It might be time for an upgrade 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 instead of copper wiring, and it’s a fire hazard because it tends to overheat at connections. Yikes!

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. And watch out for bulging or bowing foundation walls, which is a sign of structural weakness that can be expensive to repair.

Septic Tank Failure

If your new home comes with a septic tank, make sure trouble isn’t bubbling below the surface. A failing septic tank can cost thousands of dollars to replace. That’s a (literally) 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 some TLC.

Water Intrusion

Water’s usually a pretty good thing, 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 example, may indicate a faulty roof, while stains on basement walls can clue you in to drainage issues—and neither are a cheap fix.

Mold

A home plagued by mold isn’t just gross—it can harm your health too. 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. Depending on where you live, the buyer contract usually has a clause in it that lets the buyer back out if something really bad turns up on the home inspection.

Home Inspection Tips for Sellers

If you’re selling a home, you may think home inspection red flags don’t apply to you. While you may not be weighing the pros and cons of repairing items like potential buyers are, 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 RamseyTrusted real estate broker in Louisville, Kentucky, offers some simple suggestions for surviving the home inspection with your pride—and price—intact.

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 presale 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 mechanical, 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’ll price your home as is or 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 lower the price in case the buyer’s inspection uncovers major issues. You may have to wait until you can afford to fix the problem areas before you can sell your home at the price you need.

Know When to Fix Your Fixer-Upper

So, how do you know which repairs are necessary to close the deal? The buyer’s lender may require certain improvements for the sale to go through based on their 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. And depending on which state you live in, you might have to make sure certain things are in good working order (like heating and cooling, electrical, gas, plumbing, septic systems and built-in appliances).

“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. You can work with your agent to gather a few professional quotes for the repairs so you can offer cash at closing or discount the sales price to cover the costs. 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.

Do Not Skip the Inspection

Even if you get a good estimate for an inspection, the price may be more than what you planned. And you might be tempted to skip the inspection to save just a little bit on all your closing costs. You wouldn’t be alone . . . almost 40% of people who bought a home in the last five years said the cost of an inspection or the idea of locking in a lower overall home price were their reasons for skipping the home inspection.5

It may sound like you’ll save some money in the short term, but you’re leaving yourself open to something that could cost you long term: increased risk. Think about it . . . would you buy a car without looking under the hood to make sure the thing has an engine? Of course you wouldn’t.

The importance of a good inspection also goes for newly built homes. Even if the home is brand-new, you still need an inspection. Builders are human, after all, and something might have been forgotten out of pure human error. Your real estate agent might even have a few stories of things in new homes (like a sink or water heater) accidentally not being hooked up.

Bottom line: If you skip the home inspection, you’ll be less informed as a buyer. Don’t do that.

Know Who to Call for Advice

Whether you’re buying or selling a home, a less-than-perfect home inspection can really complicate 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. So, if you’re ready to take the next step in the home-buying process, let one of our RamseyTrusted real estate pros help. They’re experts in their local market and will make sure you have all the right steps done (like getting a home inspection) so you can find the right home for you.

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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