Home Inspection Contingencies Before You Buy

Buying a new home is a significant investment for most families. A professional home inspection before you purchase the home can save time, money, and heartache.

In an ideal world, home sellers would disclose any defects or issues with a home. This disclosure would allow buyers to assess realistically if they should purchase the property. Many buyers only learn of problems, such as water damage, after they move in and are responsible for repairs.

This article explores the necessity of home inspections and the home inspection process. If you have legal questions or discover a complicated issue related to an inspection, you may benefit from speaking with a real estate lawyer. 

Why Home Inspections Are Important

Potential buyers can get a realistic evaluation of the home’s condition through a home inspection. They learn about potential problems or safety issues before they make an offer. The buyer retains the choice to ask for concessions, walk away, or accept the home as is.

Home inspections are also a valuable tool for sellers. Inspections can help them prepare their home for sale. An inspection can help identify necessary repairs or electrical issues that sellers should resolve before a home sale.

Home inspections are not synonymous with home appraisals. A home appraisal helps determine the value of a house. Many buyers and sellers use home appraisals to determine the sale price of a home.

A home inspection goes beneath the surface and looks at the home’s condition. Mortgage lenders and homebuyers want to ensure the house is in good shape. In the event of a loan default, a lender will sell the home.

Home Inspection Contingency Clause

A home inspection helps potential buyers understand any potential liabilities. For this reason, many home purchase agreements include an inspection contingency clause.

A home inspection contingency clause allows the buyer to terminate the contract if the inspection uncovers a significant defect. Even newly constructed homes may contain substantial defects, so it’s in a buyer’s interest to add this clause.

What Home Inspectors Examine

Home inspectors look into every aspect of a home, including the following:

• Crawl space
• Shingles
• Gutters
• Electrical panels
• HVAC systems
• Air conditioning systems
• Water heaters
• Plumbing systems

Certified home inspectors may look for asbestos or mold in older homes. Discoveries like asbestos are not minor issues. These are issues that can negatively impact human health.

Finding a Professional Home Inspector

There are several ways to find a professional home inspector. Since many states require certification through the American Society of Home Inspectors (ASHI) or the International Association of Certified Home Inspectors (InterNACHI), these organizations are an excellent place to look for an inspector. Real estate transactions are a team effort, so ask your Realtor or buyer’s agent for recommendations.

Home Inspector Qualifications

Thirty-eight states regulate home inspectors, and requirements vary from state to state. Some of these requirements include the following:

• Completing 30 to 120 hours of education
• Passing the National Home Inspector Examination
• Having insurance coverage
• Recertification, per state regulations
• Performing a certain number of paid home inspections
• Passing a background check

If your state does not require licensure, consider the potential home inspector’s credentials carefully. Ask about their training and experience.

The Home Inspection Process

Once you have found a certified home inspector, the next step is the home inspection. Ask the inspector if you can accompany them on the walkthrough. Home inspectors go through the entire house and the exterior of the home.

Their review of the physical home may include the following:

• Heating and cooling systems
• Electrical systems
• Plumbing
• Septic system
• Walls, ceilings, and flooring
• Foundation and basement
• Roof
• Drainage
• Earthquake preparedness

Inspectors also examine structures that are part of the home, like chimneys or a fireplace.

A home inspection may not catch all issues with a property. But certain defects should reasonably arise during an inspection. If an inspector fails to conduct an appropriately thorough search, they may be liable for undisclosed defects.

Home Inspection Costs

Home inspections vary in cost but can range from $400 to $700, depending on the home’s age, type, or size. While the buyer usually pays for the home inspection, both parties can share the cost as part of the closing costs.

After the Home Inspection

After the walkthrough, the inspector will prepare a home inspection report for the homebuyer. The buyer and their real estate agent should review the report for red flags.

If the report uncovers any significant defects, the homebuyer has several options, which include:

• Backing out of the purchase agreement
• Asking the seller to reduce the purchase price
• Accepting the house as it is

Should I Order Additional Inspections?

For maximum safety of their purchase, homebuyers should consider the following additional inspections:

• A pest inspection if there is any evidence of termites or wood ants
• A radon test, depending on the location of the house
• A seismic home assessment to identify building risks associated with earthquakes

The home inspection is a visual check of the house. The inspector looks for potential issues and apparent damage. They do not check every crack and crevice in the home. Homeownership is a significant responsibility, so buyers should take every measure to protect their investment.

Problems With a Home Inspection? Talk to an Attorney

Buying a home is an investment, particularly for first-time homebuyers. If you have issues with any aspect of the homebuying process, including the home inspection, an experienced local real estate attorney can help.