Three Awful Truths about Home Inspections

Note: This is a chapter in my new ebook called The Ultimate Guide to Buying (and then Selling) Your First Home.  I will post a chapter a week.  If you like what you read, you can pick up a copy here for the price of a candy bar!   Buy a candy bar or be a real estate guru!   This chapter is about home inspections and what to expect from them.  Home inspections are almost required these days to protect you from buying a lemon of a home.   The last chapter to be shared on this blog you can find here

Steve and Sally went out to lunch to celebrate their offer being accepted by the sellers.  About an hour after they left, I got a text from Steve asking if they could give me a call later.  I responded that I was free at the moment and would call him shortly.   I was curious about what they wanted, hoping they had not changed their minds about the house.   However, when Steve answered, he sounded excited and anxious at the same time.   He said they were unsure of the next steps.  What comes next? 

I responded that when buying your first home in Texas, you have the right to an option period, a period from 2 to 21 days, to make sure the home is right for you.  This option period gives buyers a chance to do due diligence on the property before going through with the purchase.   The first task you want to undertake within 48 hours of executing your contract is the home inspection.  Home inspectors will comb through a property to find things that are not right with it and issue you a report with the findings.  They don’t go into specifics on how to fix items, but the report will help you to know if you need to get opinions from others like a plumber or electrician.   Home inspections are almost required today for buyers to feel confident in their home purchase.   Despite this, home inspections are unique experiences.   Sally asked what I meant by this.  I told her three awful truths about the home inspection you might not know when buying your first home.

1. Cost is not reimbursed by the seller.  What?  Steve exclaimed.  I nodded and continued by responding that you must pay for the inspection of the property even if you decide to pull out of the contract afterward.   Many buyers don’t realize that the expense will be needed for each executed contract and will cost anywhere from $350 to $500.    I told the young couple that they should do their homework and call several inspection companies to see how much they will charge and ask them for references.  Inspectors come in all shapes and sizes.  Some are very helpful (sometimes painfully so) and others will go in get the report written and then you never hear from them again. I added, “Please make sure to ask the inspector how long they have been in the business and if they are familiar with the area where your home resides.   Also, be sure to ask them if you can call with follow up questions after the inspection is complete as you might have some clarifications during the negotiation of repairs.   Finally, find out if they do inspections on the weekends.   Most won’t do it, but some will do them.”  Steve said he would do that.   I told him to make sure to get it done soon within 48 hours.   In this way, you know whether you plan to go forward with the contract.  Many lenders will hold off on doing any work until you have gotten an inspection and repair amendment in place.

2. Inspectors will always find something – Sally asked if this was a bad thing.  I told them it depends.  With everything else in life, when you hire an expert, they will tell you their advice on things whether you want to hear it or not. Inspectors are no different.   They will look over a property from the roof to the foundation and do it with a well-trained eye.  Everything they see as defective, they will note in their report.  Some of the items will be minor issues like a missing plug in a bathtub to major structural issues like the foundation has cracked, or the roof is too old.  Please keep all of this in mind when you get the inspection report.  The summary report will summarize all the issues found.  If the inspector is good, he or she will even meet you at the house to show you the issues first hand.   You don’t want to panic over the two to three pages of issues about your potential home.   Be cognizant of the age of your home and that with time all things begin to break down.   They both nodded at this point.  I carried forward by telling them, “There are two extreme reactions you want to try to avoid.  First, do not walk away from the home just because the inspection report has a long list of issues with your home.  Of course, if the laundry list has several expensive issues, then you might have to make the hard choice of terminating the contract.   However, let’s look over the entire list carefully to ascertain if you need to put in a repair amendment or terminate the contract.  The second extreme reaction to avoid is sending over the inspection list of issues as it is outlined in the report.  It is very frustrating for a seller to get a repair amendment.  If you carbon copy the inspection report to your repair request, you risk alienating the sellers to the point where they refuse to do any repairs.  You want to send over items that you do not want to fix yourself or is structural (expensive) in nature.   A list of five items will probably get all the items repaired while a list of 20, you might get one or two.   It is not easy, but worth the effort to figure out which repairs are necessary for the seller to fix for you.”  Steve said that they would keep this in mind when decided on what to send the seller. 

3. You might have to call in additional experts. –  Why is this necessary again? Steve asked, remembering I mentioned it before.  I restated that inspectors will let you know when there are issues with the property.  What an inspector probably won’t do is tell you how to make the repairs or how expensive the repairs required to fix the issues.   This is especially true for items like plumbing, heating/cooling, foundation and roof.  If you want to know how much it is going to cost you fix any items on the list, you will need to have an expert come out to evaluate the issue. Many of these experts will give you a quote for free with the idea that you will be using them to fix the issue later.  Other experts will expect a nominal fee to come out to the property to look at it.   It is best to have an expert to come out at the issues, because you want a trustworthy opinion on the matter. Why bother if you are just having the seller fix the issue for you?  Sally asked.  I responded, “Because you want to know what has to be done to fix it so when you do a final walk through on the home, you can make sure the repairs have been done correctly.    It will also help you to decide which repairs to put in the repair amendment.   Some repairs that you thought might be too costly for you to fix could actually be much more cost effective, which allows you to do the repairs yourself.”

A home inspection is a vital requirement of buying your first home, I said to close the conversation.  I reminded them that it will cost you some money, but give you a peace of mind in knowing that the home you found is a sound investment for your future.   Steve said that they would get it scheduled right away. Later that evening, I received an email from a well-known inspection company, letting me know that an inspection had been scheduled for the property.  It would be done in two days, which would give us five days to negotiate a repair amendment.  As I expected (and warned Steve and Sally), the repairs list was quite long for the older property.  Steve and Sally did not panic.  We set up a time to go over the inspection report to figure out what five repairs they would be seeking from the sellers.