Home Inspections

Although a home inspection is a typical part of any residential real estate transaction, it is usually initiated by the potential buyer and paid for by that person -- and there are some lenders that actually require an inspection to give final approval for financing.

In a difficult market, however, it is not unusual for a seller to take the proactive move of having a pre-listing inspection to get on top of potential issues that might affect price or sink a sale at the last minute.

Consequently, it's important for both buyers and sellers to understand home inspections in order to get the most benefit from the process.

Two Typical Inspections Conducted

Normally there are two inspections conducted on a home:

• The general inspection of all the home's systems and structure.
• An inspection for the presence of termites or other wood-damaging insects.

Although this article primarily considers the general inspection, note that it is imperative for the termite inspection to be carried out by a licensed pest control expert. Typically if wood-damaging insects are found, the infestation will be treated and a second inspection will be necessary to verify the success of the treatment.

Selecting a General Inspector

There are a number of things you'll want to know about a home inspector's credentials. Presumably you've contacted the inspector based on a referral. For starters, can you trust the referral?

Since a thorough home inspection is in the best interests of both the buyer and the seller, you normally do not have to worry about a conflict of interest on the part of either the buyer's or seller's agent. In either case, however, it is not out of line to ask the inspector to present references.

If the inspector works with a company that also provides home repair services, you may want to take pause. It is possible they will find "problems" that are in their best economic interests to solve.

The best referrals are those that come from someone you trust, who has worked with the inspector before. (It's also advisable to contract with an inspector who examines more than 200 homes a year. At that volume, you can be sure they're on top of their game.)

Also, take pains to verify that the inspector you hire is covered by errors and omissions insurance as well as by a general liability policy. Do not hesitate to ask for proof of this coverage.

Consider checking if the inspector is a member of your local Better Business Bureau. Whether he is or isn't, your local BBB should have a record of any complaints that have been filed and how they were resolved, if they were. Learn from the experience of others!

What Kind of Report Will Be Generated?

There are three types of reports common in home inspections:

• A form with a check list of items and conditions with limited room for comments.
• A written report with descriptions of the inspector's findings.
• A computer generated hybrid of the two.

Ask in advance about the type of report you will receive and ask to see an example -- completed by the inspector with whom you will be working. The least effective variety of report allows the inspector to simply circle vague qualifiers like "good" or "poor."

You want -- and need -- a detailed report with specific information, especially if problems are discovered. The inspector's report may well become the basis for further negotiations on the sale and should offer complete and actionable information.

Be There For the Inspection

Inspections take as long as they take. Expect at least two hours for a thorough job. Arrange to be present. Often the questions you ask during the inspection process reveal the greatest degree of information. If the inspector doesn't want you there, find another inspector. Also, try to schedule the appointment for early in the day when the inspector is fresh and at his most attentive.

If you are present, then you know that all major systems have been examined -- in particular the heating | air conditioning, electrical system and appliances and the plumbing fixtures. These are the areas where problems most typically surface in the home and it's essential to get a clean bill of health on each one.

Go Into the Inspection with a Positive Attitude

All too often, sellers look on the inspection with dread and buyers think it's an unnecessary expense. Both attitudes are counter-productive. The home inspection is an important aspect of an open and transparent real estate transaction. It ensures that the seller gets the best price and the buyer the best value. By understanding the process and taking care to pick the right professional for the job, the home inspection should be a positive and useful experience for all concerned.

article submitted on behalf of co-author Darrell Self.