How a Home Inspection Works When It’s Your House in the Hot Seat
Like going to the doctor or bringing your car to a mechanic, home inspections can be nerve-racking and traumatic. When it’s your house in the hot seat, even a fairly clean inspection report might sting a bit.
News flash: no home is perfect. But you can take steps to ready yourself (and your home) for the home inspection to minimize unwanted surprises.
Remember, a home inspection is not a pass or fail test. It does, however, open the door for renegotiation. You’re not obligated to fix anything, but the buyer can also walk away if they’re not satisfied.
With these fragile dynamics, the last thing you want to do is go into the home inspection blind and risk killing a contract worth saving.
So we spoke to the president of the American Society of Home Inspectors, top real estate agents, and the most experienced home inspectors to break down exactly what happens during a home inspection and how different outcomes can affect your home sale.
What is a Home Inspection?
In the process of closing a home sale, the buyer typically hires a home inspector to come to the house and perform a visual observation. In accordance with the state’s standards, the home inspector identifies health, safety, or major mechanical issues.
InterNACHI® - Int'l Association of Certified Home Inspectors, “We look for things that are significantly deficient, unsafe, near the end of the service life, or not functioning properly.”
When Does a Home Inspection Happen During a Home Sale?
In a home sale, there are two types of home inspections: a buyer’s inspection and a seller’s inspection (or a pre-listing inspection). A buyer’s inspection occurs after the buyer has made an offer on the home, and before closing the sale. After a home inspection, the buyer may be able to renegotiate their offer or request repairs if certain issues come up.
A seller’s home inspection happens before the home is listed. Some sellers choose to get their home inspected as they’re beginning to prepare their house for sale, so they can fix any potential issues beforehand and save time in the closing process.
We’ll touch on the positives and negatives of a pre-inspection a little later.
What Happens During a Home Inspection?
A typical home inspection takes a few hours for an average sized house. Then the report takes about 1-2 days to complete. The home inspector will go through the interior and exterior of the house to record any broken, defected, or hazardous issues with the house and the area surrounding the house.
Buell emphasizes, “The key thing that we look for are safety issues.”
Who Should Be Present During the Home Inspection?
Anyone is allowed to stick around for the home inspection.
“If I’m working with the buyer, we can see first hand what the problem is. If I’m working with the seller, I know exactly what he’s looking at and can either rebut it or find an expert,” Day says. “Sometimes the house is crowded. Sometimes the inspector and the agent are the only ones there.”
Most home inspectors will provide answers to any questions you may have during the home inspection, so it’s a good idea to go to the inspection and hear the findings firsthand.
What Do Home Inspectors Look For?
Home inspectors have a long, thorough list of things to check in the home. “An inspector’s job is to find defects, and defects they will find,” says Jonathan Kim, a real estate agent in the top 1% of agents in Atlanta. “We have to concentrate on the health and safety concerns first followed by major defects.”
There are seven major things that home inspectors look for:
Damaged Electrical System
Issues with the HVAC System
What Home Inspectors Do Not Look For
Home inspectors are not concerned with anything cosmetic in a home, unless it poses a potential safety issue. For example: If there is a large crack or water stain on a wall, they’ll report it. But they won’t report peeling wallpaper.
Additionally, if a buyer requests a seller update simple home elements or cosmetic flaws, that should raise a red flag. “If a handyman can handle the repair, I wouldn’t encourage a buyer to ask for it,” says Peters. “When you are arguing over an interior door that doesn’t latch or reverse polarity on an outlet on a $500,000 home, then something is wrong.”
How to Prepare for Your Home Inspection
A home inspector goes through a very thorough checklist. They look at literally everything. Prepare for the inspection to avoid unnecessary blemishes on the report.
Here are some quick things to double check before your home inspection:
Keep receipts of any maintenance or routine services you’ve ever had on your home or its components. Have them organized and ready to show to inspectors and buyers.For example: chimney sweeped, furnace serviced, filters changed in HVAC, water heater serviced, etc.
Clear out clutter in spaces like basement, attic, garage, and crawl spaces. Inspectors will need to get in there to check for moisture or damage. If they can’t access it, they’ll mark it as “uninspectable” which could prolong the process.
Make sure the inspector has access to the electrical panel, furnace, and water heater.
Lock up pets while the inspector walks through.
Make sure light bulbs are working and not burnt out. If light bulbs aren’t working, it could be a sign of electrical issues.
Run water in every sink and bath to check for clogs. Clear any minor clogs with Drano or Liquid Plumber before the inspection, as this could signify a plumbing issue in the report.
Replace filters in HVAC system. Dirty air filters compromise the air quality in the home and will raise a red flag for the inspector.
Slope dirt away from the foundation on the exterior. This will avoid basement water issues, which is a top thing inspectors look for.
Repair any cracked windows or broken screens.
Cap unused gas lines, chimneys, and flues to prevent debris and clogs. If caps are missing, toxic fumes could be released into the house.
Trim trees that are touching or close to the roof. Low-hanging branches can raise the possibility of roof damage and give rodents access to chimneys and other openings.
Should You Get a Pre-Listing Inspection?
Traditionally, buyers arrange the home inspection process. However, some homeowners choose to have an inspector come in before they list the house for sale. You don’t always need to set up a pre-listing inspection but there are a few cases where it makes sense. Here’s a quick walkthrough for when (and when not) to schedule a pre-listing inspection for your house.
When pre-listing inspections are a good idea
A pre-listing inspection could make the whole sales process faster and easier for everyone involved. According to Buell, more and more sellers have opted for a pre-listing inspection in the past five years than they used to because they can catch things early on that might create roadblocks and delays later.
Day agrees “It’s better to know ahead of time before you put [your house] on the market if your home has a defect,” he said.
If you choose to do a pre-inspection, Buell suggests putting the report out on the table when buyers come through. Check off things that you’ve fixed and provide receipts of service on the areas of concern. “It just gives peace of mind and confidence to the buyer that this person cares about their home, they care about the process, and they want to make sure that their house is in good shape,” Buell says. “And it speeds up the process for the buyer to buy the home.”
Day typically suggests that clients with older homes get a pre-listing inspection. “It can make the whole thing a lot less stressful. The week or two after a property goes under contract can, unfortunately, be pretty nerve-racking,” Day says.
Pre-listing inspections can take away the stressful element of surprise for the homeowner. It also helps prevent offer renegotiations, extensive buyer repair requests, and the possibility of buyers walking away while already in contract.
When pre-listing inspections are a bad idea
On the other hand, pre-listing inspections can open a can of worms, according to Carol Wolfe, who ranks in the top 1% of Los Angeles real estate agents. If a seller gets a pre-inspection, they are legally required to disclose the home inspection report to buyers.
“Maybe something would come up that the buyer wouldn’t find in their own inspection,” says Wolfe. “Every inspector finds different things.”
For that, Buell says there’s limited regulation. “One home inspector may look at the house one way, another might look at it a different way,” he says. “Each inspector, just like a doctor, will look at your situation and they could give you two or three different remedies. If they follow the standards appropriately, theoretically, they should come up with the same things, but that’s not always true.”
There’s no way of knowing whether the buyer’s inspector will find the same things as the seller’s inspector. So, it’s up to the homeowner and their real estate agent to decide whether or not a pre-listing inspection will affect the sale.
How Home Inspections Affect the Sale
After the home inspection, the buyer and seller can either negotiate the contract or part ways completely. What happens next is crucial to the home’s sale. Here’s how:
If the buyer walks away after the home inspection…
The seller will have to put the house back on the market. When a house goes under contract, the MLS will show that it was a pending sale or under contract. If it comes back on the market, it’s a red flag for buyers before they even step foot in the house. “Future buyers will question why the contract failed to close,” Day points out. “Then the seller will have to explain that they couldn’t come to terms and it will affect the value for sure.”
If there’s negotiation over the home inspection…
Depending on the terms of the contract between the buyer and seller, the buyer may either request the seller to do the necessary health and safety repairs or request a credit from the seller so the buyer can do the repairs themselves.
The seller most likely will have to foot the bill for whatever turned up as a health or safety issue in the inspection. Wolfe adds that this is where a good real estate agent comes in handy.
If the seller denies buyer requests…
The seller can bring in their own experts to confirm the issues that the inspector found. In some situations, the home inspector could be wrong about the status of home mechanisms and components.
Day says this has happened to him before. “The buyer’s inspector thought that the electric panel was outdated and no longer an obsolete. I had my electrician go out there and look at it and said there was nothing wrong with it, and that the parts are still readily available and it could last another 10-20 years. We were able to squash that problem just by having our own experts.”
Depending on the contract, the seller could even walk away from a buyer’s requests, which might be the best move if there are more buyers waiting in line to make an offer.
Wolfe points out, “It puts the seller in a pretty good position to not have to negotiate if that happens. But if there are no other offers and you go into escrow, then the seller may want to think about accommodating some of the things that come up.”
That’s How Home Inspections Work
Home inspections are meant to keep homeowners safe. If you get a pre-listing inspection, you can prepare yourself for repair requests from buyers. However, you will be legally required to disclose the findings of the report to buyers, which may prove to be detrimental. Once a buyer makes an offer and you accept it, they’ll bring in a home inspector which could lead to negotiations or tear apart the deal completely.
If you’d like to know more about how a home inspection works and how a home inspection could affect your own specific home sale, speak to your real estate agent about what works best for you. A good real estate agent will have trusted experts in their corner, ready to come in and confirm or deny inspectors findings. They will also provide you with the best advice depending on the current real estate market, the condition of your house, and your financial needs.
Warning: Before you buy a new house-know this
We have many great home builders in Texas. Most try very hard to give the best possible house for your money. But, did you know that builders here do not need a license? Inspectors, Realtors, Plumbers, Electricians, Heating and Air Conditioning Technicians, and Pest Control Technicians all need to be licensed by the State of Texas. But, not builders.
Builders do not need a license in Texas !!!! They do need to register, but they are not regulated in any meaningful way. There are almost no requirements to call yourself a "Builder".
You must ALWAYS exercise"due diligence" before you buy a new house, or any house from ANY builder. The following check list is offered to help get you started. It is not complete, but only a beginning guideline.
How to find a good Home Builder in The Greater Houston Area:
Visit the BBB web site, http://www.bbbhou.org/ to check out the builder's history.
Visit the Greater Houston Builder's Association (GHBA) website: http://www.ghba.org/
Its a great organization and may be able to help you determine the qualifications of a given builder as well as their history and education.
Do an inquiry on Google with the builder as the subject. You may be able to get much information from past buyers or building organizations.
Visit previous buyers in the subdivision in which you are interested to learn of their experiences with the builder. Just go down the street knocking on doors. You may be surprised at what you'll learn, and the money you may save.
Ask the builder:
1) If they will allow your own licensed inspector to inspect the house in phases as well as a final inspection. See what their attitude is. Good builders usually welcome outside inspectors as a help for them to discover errors or honest mistakes that they might miss. Some builders will try to throw up obstacles to outside inspection. If a builder tells you that they have their own inspectors and therefore you don't need your own inspection, you had better be very careful.
2) If they will show the building plans to your inspector. If they don't, why not? What do they have to hide? An inspector on a construction phase inspection will need those plans and schedules to the check that measurement are correct and that the proper materials have been used.
3) If they belong to the BBB
4) If they belong to the Greater Houston Builder's Association.