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All About Home Inspections

This question often comes to me in many forms. Do I really need a home inspection? What exactly is a home inspection? What if my home fails the inspection? And last, but not least; What is the difference between a home inspection and an appraisal? Let’s dive in and take a closer look at the inspection process.

Home Inspection

What is a home inspection?

A home inspection is a thorough look at the home you’re purchasing. Generally, the inspection is a contingency in the contract. Therefore, if you find something during the home inspection that is a deal-breaker for you or that the seller won’t fix you can terminate the contract. The inspection is broken into multiple parts, which may be labeled differently depending on the inspector you choose. In general, the categories include home site, garage, roof and attic, structural, heating/cooling and ventilation, electrical, plumbing, foundation, and living spaces. The inspector will evaluate each of these areas and give you an idea of the safety as well as the estimated life expectancy of major systems. Inspectors cannot see everything, for example, they cannot see inside walls. There may also be cases where the attic or crawlspace is too small to enter; this can limit the inspection.

Do I really need a home inspection?

YES! I always advise my clients get a home inspection even if they are buying new construction or agreed to purchase the home as-is. An inspection will give you a great overview of the home’s condition and help you develop a list of items you may need to take care of or prioritize after (or maybe even before) moving in. A home inspection can also help you foresee potential future expenses, such as a furnace that is functioning perfectly right now but is 10 years past its life expectancy or a roof that will need to be replaced in 3-5 years. This will allow you to budget for upcoming expenses. On new construction, I have seen heating ducts missing or not fully hooked up, pieces of lumber in sewer lines, and more.

Are there additional inspections I should do?

Maybe. The inspection addendum that goes along with the sales contract in Oregon offers 17 different inspections plus an area to type in any additional inspections. The main inspections I usually recommend in the Willamette Valley aside from the basic full home inspection are radon and sewer scope. In addition to that, depending on the condition and age of the home there may be other inspections you may want to do. Some other examples may be a structural inspection if there are concerns about the integrity of the structure, an underground storage tank if it is an older home that may have had oil heat, or a fireplace and chimney inspection if there is a fireplace or a woodstove. Have a discussion with your agent to see what inspections they may recommend in your specific situation. 

What if my home fails the inspection?

When do I find out if my home passed or failed the inspection? Great news, only you can decide if the home “passed or failed.” A home inspection is just a report for your information. It is also used as a tool to negotiate repairs, concessions, or price reductions with the seller. Whether the home passed or failed is really up to you! Once you receive the report(s) you will be able to look through all of the information and discuss it with your agent or potentially use it to get contractors out for a more in-depth look. Then, you’ll use the information in the reports to decide how you want to move forward.

Generally, after you review the report you will either:

  1. Accept the house as-is and move towards closing.
  2. Request the seller to do repairs and if you come to an agreement on those repairs move towards closing. If you cannot come to an agreement the transaction will terminate.
  3. Terminate the transaction.

What is the difference between a home inspection and an appraisal?

Many people get home inspections mixed up with appraisals. On the surface, both are home inspections, but there is quite a difference. As we’ve discussed, a home inspection is a full report on the home for your reference as a home buyer. An appraisal on the other hand is a report for the bank, although you as the buyer pay for it. If you are paying cash for a home you will not have an appraisal, however, you may still have a home inspection. 

An appraisal includes a brief inspection of the home with a focus on noting any major safety or health hazards but does not go as in-depth as a home inspection. An appraisal also gives the bank a value for the home so they can ensure they are making a good investment by offering you a loan. The appraisal value will need to come in at or above the amount you offered for the home, otherwise, you will need to renegotiate the price of the home or pay the difference in cash. You will also want the appraisal to come in with, “no conditions.” A condition to the appraisal would mean a health or safety hazard has been noted and will need to be fixed in order for the bank to approve your loan. Additionally, the appraiser will need to come back to the property to ensure the repairs were made and the buyer will pay an extra fee for the second trip.

Do you have questions about home inspections? I am always available as a resource so please reach out if you have questions.