Wednesday, August 18, 2021 / by Brian Armstrong
A home inspection is one of the many components in the home buying process. The goal of a home inspection is to address any major health or safety issues with a property and most commonly occurs when a home is on the market. Transparency of information is crucial for a smooth transaction and inspections help put buyers at ease when it comes to making a substantial purchase. Keep in mind that home inspections are only a surface-level overview however they do provide valuable information to the home’s general health.
How a Standard Home Inspection Works
Standard home inspections are commonly arranged for and paid for by a potential homebuyer that is interested in purchasing a property. Typically, a home inspection will be completed within two weeks after a sales contract or purchase agreement between a buyer and a seller has been signed. In the agreement, many will include an inspection contingency, which allows the buyer to schedule an inspection, read the findings, and determine how to proceed based on the information. With that said, home inspections can be done at any time, including by the seller which can give them the opportunity to make repairs prior to going to market with their home.
The home inspection is a visual examination completed by a licensed home inspector to determine if the home meets health & safety standards. It is also common for potential buyers to participate in the inspection to help familiarize themselves with the home and how it functions. For the exterior, the home inspector will assess the home’s physical structure including the foundation, roof, and siding. Internally they will assess the property’s heating and cooling systems, plumbing, electrical work, water, and sewage, and look for any potential safety issues. Home inspection outcomes vary greatly and can include small cosmetic defects all the way to major septic issues. Each home is unique and depending on the style, location, age, etc. it is also possible that additional inspections may be needed for a variety of specialized needs. These inspection items may include things such as lead, asbestos, sewer, chimneys, etc.
After The Inspection
The inspector’s findings will tell a homebuyer quite a bit of information about a house and will guide how the rest of the transaction will unfold. It is key to have a good inspector that will not only be thorough in their assessment but also share their perspective about the issues to help the buyer make an educated purchase. The inspection may bring to light some problems that impact the home's value but, that does not mean the deal will be terminated. Once the buyer has the information they can decide if they want to go ahead with the sale, renegotiate the sale price, or may ask for certain repairs to be made. Should a major repair be involved it is common for the buyer to reinspect the work to make sure that the completed work resolved the issue at hand.
Home Inspection vs. Appraisals
Many people confuse a home inspection for an appraisal. While the findings of inspection items can impact the value of a home and many major issues will be recorded by both an inspector and an appraiser, an inspection does not constitute a formal appraisal. A home inspection is only focused on the physical condition of the property where an appraisal is meant to determine the home’s value. Unlike the inspection, which is set up by the buyer, an appraisal is required by lenders when a buyer is getting a mortgage to purchase the home. This process cannot be waived as it is used to determine how much a lender will finance the buyer to purchase the home.
Home Inspection in Today’s Market
In the current fast-paced market, we are seeing more and more home inspections and inspection contingencies being waived by buyers. With housing shortages across Vermont many properties that are for sale are in multiple offer situations. Since home inspections give the buyer a chance to terminate based on the outcome, waiving these contingencies is a tactic buyers use to make an offer more attractive to sellers. While this can help a buyer stand out amongst others, this also comes with risk, as the buyer will not know what potential issues a home has prior to purchasing. If you are looking at a newer house, it may be a safer bet to skip the inspection, but you may still find that issues arise so be careful when using this tactic!
If you are getting ready to buy a new home and have more questions about the inspection process, give us a call at (802) 735-2167. One of our buyer specialists will be able to help you with your inspection and other homebuying questions!