How home inspections work

The homebuying process creates a lot of questions. Many of those involve home inspections. Homebuyers want to know what a home inspection involves and whether they really need one. Understanding what they are, why you need one and how they work will help you answer these questions.

Do you need a home inspection?

It’s normal for homebuyers to want to skip a home inspection during the homebuying process. Some are afraid it could delay the sale. Others worry about possibly offending the seller. The price of an inspection is also a factor.

But the time and money you spend on a home inspection is worth the investment. A home inspection can catch any potential problems before you complete your home purchase. You can rest easy knowing you likely won't face significant problems or major repairs now or in the near future. It can also give you options when it comes to purchase price and cost negotiations.  Always consider asking for the contract to include a contingency around the outcome of the inspection. 

What is a home inspection?

A home inspection is a thorough and objective examination of your potential home to ensure that it's safe, solid and livable. A home inspection typically takes around 2 or 3 hours, depending on the size of the home. The inspector looks through every nook and cranny in the house, checking both the interior and exterior. They'll look at the basic structure of the home plus its systems. The goal is to make sure everything is stable and working as it should.

Who arranges the home inspection?

Your realtor may be willing to help arrange for the inspection. However, you should always choose your own inspector. The inspector you pick shouldn't have any ties to either the seller or any realtors involved with the sale.

Look for an inspector who is a member of a reputable trade association.  

Important questions to ask a home inspector: 

• How long have they been an inspector and how many inspections do they do each year?
• Can you ask questions during the inspection?
• Will they provide a full written report?
• Do they carry errors and omissions insurance (E&O)? This kind of insurance protects you in case the inspector misses something critical during the inspection.

When to schedule a home inspection

Schedule a home inspection either prior to or right after you and the seller sign a contract for the purchase of the home. If it’s completed after signing the contract, then it should take place well within the contingency period you agreed upon in the contract. That way, there's time after the inspection to address any issues that may come up.

Who pays for the home inspection?

The buyer generally pays for the inspection. Sometimes a seller has already paid for an inspection in order to proactively address any issues. However, you should still order your own inspection. That way you can ensure any potential issues were not missed or that any previous issues were properly addressed.

Who needs to be there during the inspection?

Generally, you and the inspector will be at the house during the inspection. A home inspection is a great opportunity to learn more about the home you're about to buy. For example, you'll find out where the electrical panel is and where the gas and water shut-offs are located. You'll also learn a bit about how the water heater and HVAC systems work.

Having the chance to ask questions about your possible new home and getting them answered by an expert is invaluable. Make sure you pay careful attention, snap relevant photos and take copious notes.  

What the inspector checks:

• Are there any faults in the foundation or framing that could compromise the structural integrity of the house?
• What is the general quality of the construction? 
• Are there any grading or drainage issues? Could retaining walls, trees, shrubs or other plants cause drainage issues?
• Are porches, decks, balconies and their related steps and railings safe to use? How about any walkways, patios and driveways?
• Are there missing or broken shingles? How about signs of unrepaired storm damage on the roof?
• Is the flashing in good shape and properly installed?
• Are there any signs of leaks around the chimney, skylights or anything else that penetrates the roof?
• Are the gutters, downspouts, and the rest of the drainage system in good shape?  
• Is the outside of the house in good condition? The exterior inspection also includes the flashing, trim, eaves, soffits and fascias if they're accessible from the ground.
• Are there any signs of leaks in the attic? Is it properly insulated and well ventilated?
• Do the kitchen, bathroom, laundry room and clothes dryer exhaust systems all work properly?
• Are the HVAC systems in good condition? Are they adequate for the size of the house? Do they work as intended (temperature permitting)? 
• Do any fuel-burning stoves or fireplaces, fireplace inserts, chimneys and vents appear to be in good working order?
• Is the electrical system in good shape and working correctly? Inspectors check the circuit box and the wiring leading into and out of it. They'll also test a sampling of the light switches and outlets in the home to ensure everything is working correctly.
• Is there at least one smoke detector on every floor of the house? Ideally, is there also one in each bedroom?
• Is the plumbing system working as it should? Your inspector tests every fixture and faucet to make sure it's working properly. 
• The inspector tests all the permanently installed appliances (other than laundry machines) to make sure they start okay. 
• He or she inspects the ceilings, walls, floors, countertops and a sampling of the cabinets for signs of damage.
• Garage doors, garage door openers and all exterior doors are tested to make sure they open easily and close securely.
• A representative sample of interior doors and windows are also inspected.
• Are there any obvious signs of termites or other wood-destroying organisms?

Depending on the home's age, design and location, you may want additional inspections. These might include checking for mold, lead paint, asbestos or radon.

What the inspector won't check:

• Anything that's hidden behind the walls, including plumbing and wiring. The items listed above show that the plumbing and electrical systems are working. However, the inspector can't guarantee there isn't a problem since he can't see what's behind the walls. A home inspector can only check "readily accessible, visually observable, installed systems."  
• An inspector won't inspect any chimneys, flues or vents that aren't easily accessible. 
• Recreational facilities like tennis courts, docks or any outbuildings other than those listed above aren't checked. Inspectors also won't inspect fences, seawalls or other boundaries.
• An inspector won't test smoke or carbon monoxide alarms, security systems or other alarm systems.
• Inspectors don't review seasonal additions to the house like screens, screen doors, awnings, shutters or window boxes.
• Sewage systems such as septic tanks, leach beds and cesspools aren’t included in home inspections. 
• Remember too that a home inspection will not provide a value for the home.  A lender may require an appraisal and while the appraisal does not provide detailed inspection, it may ask for mandatory repairs that may or may not have been identified in your home inspection.

What to do with the results of a home inspection

You and the seller each receive a copy of the inspector's report. Where you go from there depends on you, your realtor and the seller. Here are some next steps you can take once you’ve received the results of a home inspection:

• Go ahead with the purchase as it stands. You'll know what you're getting into and have an idea of how much it’ll cost to make any necessary repairs.
• Ask the seller to make the necessary repairs. This can be made a condition of the closing.
• Use the inspection report details to negotiate a better price with the seller. The inspection report may prove that the roof needs $30,000 in repairs. The seller might reduce the cost of the home to cover those repairs.
• Walk away from the deal. Some purchase contracts have a home inspection contingency that allows you to back out without any penalties or loss of earnest money if the home inspection isn't satisfactory. This isn't an ideal solution, but it may be the most affordable option if the needed repairs are expensive.

Home inspections are an important part of the homebuying process. Getting a good idea about the state of the home you’re buying means there’s less chance of nasty surprises in the near future. You may also want to go over the inspection report with your Home Lending Advisor and discuss your options as you make your way through the homebuying process.