INSPECTIONS AND DISCLOSURES
Home Inspection 101:
This is What You Need to Know (Plus a Checklist)
Before you purchase a home, hire an inspector to make sure the structure is sound and there aren’t any defects.
An inspection helps buyers identify serious issues with a house, condo, townhouse or other type of home. Some lenders require home inspections before they’ll approve closing on a mortgage loan. Professional home inspections aren’t always a required part of a purchase contract; they’re a smart part of buying a home and a property investment.
Whether or not a loan officer insists on an inspection, getting a home inspected is to your advantage. No one wants to find out there’s something wrong with a property after they’ve signed the papers.
Here’s what you need to know about home inspection, followed by a handy home inspection checklist:
Not all home inspections cover the same points
There will likely be numerous home inspection companies and professionals to choose from when you’re buying a home. As you look for an inspector or consider inspection company referrals, keep in mind that not all inspections cover the same points.
When inquiring or interviewing inspectors, make sure those you’re thinking of hiring will inspect the inside and outside of the property. Inside, an inspector should look for leaks, fire hazards, the health of the house systems and the life of the water tank. Plumbing and wiring inspection are essential to make sure these systems are up to code. Inspectors should look at a home’s ventilation systems and smoke detectors. If the home has appliances, they should be tested.
Outside, inspectors should check for cracks in walls and the foundation. Missing siding, damage to the roof and cracked woodwork are all issues that may point to structural problems with a home.
Most general home inspectors won’t check septic systems or insect damage. These are points that you should hire specialists to address.
Buyers should choose their own home inspector
As a buyer, you can certainly negotiate who pays for a home inspection. However, consider that sellers paying for an inspection may want to choose the company themselves.
It’s in your best interest to choose your own inspector when purchasing a home. This may mean that you’ll have to pay out of pocket for the inspection. This service is not usually included in the fees a lender will roll into a loan.
The cost for a home inspection is typically a few hundred dollars. If you need in-depth inspection of a property, such as a review by a structural engineer, prepare to pay much more.
In some states, a home inspector must have a license. If you aren’t sure where to look for a licensed home inspector, your real estate agent should be able to offer a referral. It’s a good idea to verify any inspector’s license to make sure you’re hiring someone qualified.
Home inspections can offer a way out of a purchase contract
Every purchase contract is different. Buyers should refer to their binding agreement with questions about getting out of a sale due to issues that come up during a home inspection.
It’s wise to write a purchase offer that lets you back out of a sale if an inspection reveals issues with which you don’t want to deal. Sometimes, buyers are willing to spend the extra time and money to fix problems. Often, it’s just not a good idea. If your agent or you have written a good purchase offer, you’ll be allowed out of the contract should the home inspection uncover problems.
If a home inspection uncovers damage to a property, buyers can ask the seller to pay for repairs as part of the contract. Buyers and their agents may want to submit a Request for Repairs that negotiates part or all of the cost of repairs, or asks for repair work to be completed prior to close of escrow. In lieu of money for repairs, you can request a cash credit (reduced price) for the home.
Refer to the home inspection checklist
It’s always smart to be present when an inspector is checking out your potential home. If you’re working with an agent, your agent should also be there at the inspection. Some of the specific points you’ll want to make sure your inspector looks at include:
|☐ foundation||☐ basement|
|☐ lot||☐ electrical|
|☐ roof||☐ plumbing|
|☐ chimney||☐ appliances|
|☐ exterior||☐ heating/cooling system|
|☐ attic||☐ odors|
|☐ interior leaks||☐ mold and mildew (consider a specialist in this field)|
An inspection is a crucial step in the home purchase process. Remember, it’s there to help you, not discourage you. Many home inspections reveal minor issues that buyers can live with. There aren’t many houses that are completely free of defects.
Having a real estate professional by your side is important during the home inspection process. If the inspection report brings up any issues that you don’t understand, or aren’t comfortable making a decision about right away, your agent can help you navigate the situation wisely and within the time frame indicated in your contract.
Disclosures for California
Purchasing a home is one of the biggest investment decisions a person can make. In order to protect homebuyers in this process, residential property sellers in California and many other states are required by law to disclose, in writing, details about the property. These disclosures give the potential buyer a realistic understanding of the condition of the property and the scope of repairs or upgrades that may be required.
To Which Types of Properties Does This Apply?
Disclosures are required for nearly all types of residential properties, including detached single-family homes, multi-unit dwelling buildings (apartments or condominiums), and manufactured or mobile homes. Disclosures are required; they are not optional.
Who Must Provide Disclosures?
The seller is legally bound to provide disclosures to any prospective buyers.
This exchange of information should take place as early in the purchasing process as possible. We advise our agents to be prepared with disclosures, inspections, and other relevant property documents in the early stages of the transaction to avoid any unexpected issues. Delays or failure to promptly provide disclosures may result in negotiation changes or even a cancellation of an offer.
What to Disclose?
As outlined in California Civil Code 1102, seller disclosure requirements are well defined. The seller should provide details on any upgrade, repairs, existing damage or known issues that could impact the present or future value of the property. The “Transfer Disclosure Statement”, also referred to as the TDS, is a form required by California law in most residential real estate transactions. In California, all sellers must complete an additional disclosure form called the Natural Hazard Disclosure Report. A licensed real estate agent will review and explain all disclosures with their clients.
For more information, please refer to your real estate agent.