Six Important Home Inspections
Picture this... a buyer is working with their real estate agent, and they find the perfect home, at a great price, in the ideal location. They're determined to close on the deal, but there is one obstacle standing in their way: the home inspection. After all, a good inspector is liable to figure out the perfect house might not be so perfect.
In this article, we're going to help dispel the myth that a perfect home exists. After all, even brand new homes are built by humans, and they're limited by the materials used as well as the skills of those building the home. That's where a good home inspection comes into play.
Discovering What's Wrong with a House
Even if someone manages to find their dream home, a good inspector can help explain exactly what's not so perfect about the home, and that's a good thing. Because when someone buys a home, they're also buying all of its problems too.
A leaking oil tank on the property or a septic system that isn't functioning properly can be expensive to fix. Conducting a series of thorough inspections is a lot like buying an insurance policy against future expenses. Unfortunately, conducting all of the right inspections can run several thousand dollars.
Six Critical Home Inspections
The more complex a house or property, the more inspections it's going to need to figure out if something's wrong. At the very least, a home is a complex building of plumbing and electrical networks. At the other end of the spectrum, homes can supply water and sewage services too.To understand if all of the features of a home are functioning properly, a buyer may have to conduct as many as six separate inspections:
- General Home
- Termite / Wood Boring Insect Damage
- Well Water Quality
- Radon Gas Presence
- Septic System Reliability
- Oil Tank Integrity
The remainder of this article will talk about each of these inspections in more detail. We're also going to discuss some of the options a buyer has when a home doesn't "pass" an inspection.
General Home Inspections
Subject to local forces of supply and demand as well as the size of the home, a "standard" inspection will generally run around $500 to $700. Inspectors are usually certified by state run agencies and / or members of nationally recognized organizations such as the American Society of Home Inspectors or National Association of Home Inspectors.
A general inspection will cover features of the house such as electrical wiring, plumbing, roofing, insulation, as well as structural features of the home. The inspector will then write a report suggesting any improvements or repairs deemed necessary to bring the home up to current standards.
Termite / Wood Boring Insects
The general home inspector usually helps to arrange for a termite inspection too, which typically runs another $100 to $200. This inspector will look for signs of structural damage caused by wood boring insects as well as conditions that might lead to problems down the road, such as wood in direct contact with the ground or soil.
If the home has a well that is used to supply drinking water, the well needs to be tested too. Testing water for potability (suitability for drinking) will run $200 or more. Testing will include measures of water hardness as well as the presence of heavy metals such as lead, cadmium, or arsenic. If a buyer suspects that a leaking oil tank might have contaminated the water supply, then test for Volatile Organic Compounds or VOCs too.
Tests should also be conducted for common bacteria such as E. coli (Escherichia coli), especially if the home has a septic tank or farm nearby. Use a laboratory certified by the state to conduct such testing. A listing of approved laboratories can be found on the Environmental Protection Agency's website.
Radon is a naturally occurring radioactive gas that is a decay product of uranium. Buyers living in New Jersey, New York, or Pennsylvania, or anyone thinking about moving into one of these states, need to be aware of a uranium rich formation called the Reading Prong.
Radon gas can build up in enclosed places, and homeowners are encouraged to test homes, especially basements, for the presence of this gas. A continuous monitoring test will cost around $200. Once again it's possible to find laboratories certified to perform such testing at the EPA's website.
Septic Systems and Tanks
If the house has a septic tank, that system needs to be tested too. Septic systems consist of tanks, which are where solids settle, and leach fields where the grey-water is discharged. A simple dye test can determine if the leach field is functioning properly.
Buyers that really want to figure out if the entire septic system is in good operating condition need to have the tank pumped out and visually inspected. That service will run about $700.
Buried Oil Tanks
At one time, it was very common for bare steel fuel oil tanks to be direct buried; meaning these tanks were located underground on the home's property. If the home has an existing fuel oil tank located underground or if records indicate a tank was on the property at one time, the tank and / or soil should be tested.
An underground oil tank test consists of a vacuum or pressure test to determine if the tank is leaking. If the tank is found to be leaking, or records indicate an abandoned tank on the property, then a soil test for petroleum hydrocarbons should be conducted. Tank and soil testing will cost around $1,000.
Dealing with Sellers
Home inspections will often reveal flaws with a home that can be costly to repair. If the home inspection finds something seriously wrong with the "perfect" home, there are four options:
- Negotiate a Credit with the Seller
- Have the Seller Pay for Repairs Before Closing
- Buy the Home As-Is
- Walk Away from the Deal
Negotiating a Credit
Many times buyers and sellers of homes expect to negotiate in good faith with each other, and that includes coming to agreement on repairs deemed necessary via the home inspection.
Negotiating a credit often means compromise, both parties agree to meet somewhere in the middle, and that means extending a credit to the home's buyer. Credits usually take the form of "splitting" one of the closing costs; the seller paying for a cost typically paid for by the buyer.
Seller Repairs before Closing
If the home inspection reveals serious problems with the home the seller claims they were not aware of, then it's reasonable to ask the seller to make the repairs before buying the home. After all, an offer was made on the home the seller felt was fair before the problems were revealed.
Now that everyone has been made aware of trouble with the home, it's time to reevaluate what is a fair offer. The buyer could logically argue that their offer was made, and accepted, before these flaws were known by either party. The fair thing to do would be to bring the home back to that same point of reference.
Buying the Home As-Is
If someone values the home enough, they might decide to buy the property as-is. Just remember the effective purchase price is the bid placed on the home plus the cost of the needed repairs. These costs can sometimes be rolled into the new mortgage.
Buyers should never pay for a repair until they own the home. Deals fall through all the time, do not repair a home that belongs to someone else.
Walk Away from Deal
As a final option, it's always possible to just walk away from the home. But this is often a difficult decision for buyers that have fallen in love with a house. The reason it's hard to walk away is that those feelings are usually emotional - not logical. But if the home is in need of expensive repairs, and the seller is not willing to compromise, then walking away might be the least expensive, and best, option.
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