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After going through the stressful process of staging and showing your house, you’ve accepted an offer that exceeds your expectations. But you’ll still have to get over the home inspection hurdle that could reveal unexpected roadblocks, leading to costly repairs or cause buyers to renegotiate a lower sales price — or even walk away from the deal. It’s critical to know what home inspectors look for because serious problems could derail the sale altogether.
As home prices and interest rates continue to show volatility in 2023, savvy buyers are more keen than ever to get their money’s worth, paying top dollar inspections to ensure that their purchase is in good condition.
Out of the 7% of deals that fall through, the leading reason for termination is home inspection issues at 26%, reports the Realtors® Confidence Index survey for April 2022. While 18% of settlements are delayed, problems encountered during inspections hold up one in ten contracts.
Read on so you can take the necessary steps for a smooth sales process without lengthy setbacks or the inconvenience of losing a buyer and having to start all over again.
What is a home inspection?
A home inspection is the visual examination of a house’s structure and systems to determine the condition of the home and identify problems that could impact health and safety. Buyers typically pay for the inspection to uncover major issues that may give them second thoughts about purchasing the house and avoid surprise repairs after moving in.
Contingencies can be costly
While 25% of buyers waive a home inspection contingency, according to data from the National Association of Realtors® (NAR), most real estate offers include a clause allowing buyers to get back their earnest money if they don’t go ahead with the sale based upon results of the inspection. While a canceled purchase agreement is the worst case scenario, be prepared to spend money to resolve problems identified during the inspection or give credits to buyers who prefer handling repairs themselves. The buyer might renegotiate a lower price if the house is in worse shape than expected.
Because inspections are vital to the homebuying process, buyers are likely to choose an experienced home inspector whose credentials include certification by the American Society of Home Inspectors (ASHI) or another professional organization.
Inspection versus appraisal
The inspection doesn’t determine your property’s value during the appraisal process. A home inspector objectively evaluates visible features from the roof to the foundation while focusing on significant health, safety, and mechanical issues that impact the buyer’s purchase decision.
However, an appraisal is generally ordered by the buyer’s mortgage lender to assess the home’s condition, including upgrades, renovations, and serious defects, as well as market factors and comparable properties. The appraiser utilizes this information to establish the home’s worth which affects the size of the mortgage the bank will approve.
What do home inspectors look for?
Home inspectors mainly look for issues that affect safety and focus on the big-ticket items, not cosmetics like peeling wallpaper, says Tim Buell, ASHI Financial Services Director and past President. “Our standard very simply says, we look for things that are significantly deficient, unsafe, near the end of the service life, or not functioning properly,” he explains.
Inspectors examine visible and accessible areas of the residence, but won’t evaluate anything that’s locked or blocked as well as unsafe such as extremely steep roofs.
Home inspectors look at the following items that can impede the sales process or reopen negotiations:
Heating system and central air conditioning (HVAC)
Your buyer will want assurance that the heating and air conditioning system operates efficiently and reliably. While typically lasting 15 to 25 years, even a newer HVAC system may have issues. A dirty air filter is often the culprit and a simple, inexpensive fix. Replace filters every season to maximize efficiency and lifespan. Dirty or obstructed duct work, another common problem, is easily solved by routinely vacuuming vents and air returns.
Keep your system running smoothly with tune-ups in the spring and fall by HVAC technicians at an average cost of $70 to $200. If you notice temperature fluctuations or higher energy bills, consult an HVAC firm about repairs or consider replacing an older unit. Contact Air Conditioning Contractors of America to find HVAC contractors in your area.
Home inspectors examine anything affected by water flow, such as pipes, showers, bathtubs, sinks, faucets, and toilets.
Worn toilet flappers, dripping faucets, and leaky shower heads increase water bills by 10%, but replacing washers, gaskets, and other parts saves money and ensures a smoother home inspection. Water backing up in the sink, shower, or toilet indicates a plumbing issue as does a sewer gas odor if the trap in the bathtub or basement floor drain has dried out. An inspection may reveal health hazards such as lead pipes, particularly in older homes. Water heaters and sump pumps are also inspected.
Call a plumber if you see signs of moisture or a leak you can’t fix yourself so your sale doesn’t go down the drain. Roto-Rooter provides plumbing and water cleanup services throughout the U.S.
Safety is an inspector’s top priority, so expect a thorough examination of the electrical system which is the third leading cause of house fires. In addition to checking the electrical panel to make sure wiring and grounding are up to code, the inspector looks for corroded wires and correct amperage ratings.
Common electrical issues include exposed wiring, painted outlets, reversed polarity, aluminum wiring, and lack of GFCI protection. If lights dim and flicker, you hear sizzling and buzzing sounds, or circuit breakers trip repeatedly, hire a licensed electrician so electrical problems don’t leave you in the dark.
Roof, attic, and insulation
Buyers are especially interested in the condition of your roof which is one of the most critical parts of the house and expensive to replace — between $8,700 and $22,000 depending on size and location. The inspection also includes flashing, gutters, vents, and skylights.
Look for signs indicating your roof needs repair or replacement including loose or missing shingles, buckled or curled shingles, cracks or rust on flashing, soft spots or unevenness, moss growth, moisture in the attic, and stains or peeling paint on the ceiling.
Inspectors examine visible insulation, ventilation, and exhaust systems in the kitchen, bathroom, and laundry room in addition to the attic and crawl space. Inadequate insulation and ventilation in the attic increase utility bills and decrease comfort.
A disconnected exhaust fan is easy to rectify, but a deteriorating roof can leak and lead to pest infestation. Look for a roofing contractor on HomeAdvisor if you have concerns about your roof’s integrity.
Water is the homeowner’s number one enemy, according to top home inspectors surveyed by HGTV.com. Water damage can lead to toxic mold growth and foundation problems which ring alarm bells for buyers.
Water in the basement indicates possible structural issues. Water stains on walls and ceilings might be due to a leaky roof or faulty plumbing.
Foundation, basement, and structural components
Water in the soil surrounding your home may lead to foundation movement and create pathways where water can enter the structure, potentially leading to decay, mold, and termite activity. Inspectors look for settlement problems, cracks in the foundation, and sloping.
Basements and crawl spaces are inspected for moisture, evidence of pests, and issues relating to the foundation, structure, and insulation. Home inspectors also examine structural components connected to the foundation such as walls, floors, and roof framing, paying particular attention to water and insect damage since wood framing is typically used.
Take a look around your home’s perimeter, basement, and crawl space. If you observe mold, cracks, or dampness, notice a musty smell, or have other concerns about your property’s structural integrity, reach out to a structural engineer for further evaluation. P.E. for Hire is an online platform connecting homeowners to professional engineers.
Walls, ceilings, floors, windows, and doors
Red flags that your home may not be structurally sound include cracks in walls or around door frames, uneven or bouncy floors, gaps between walls and floors, and nails popping out of walls. Water stains on walls and ceilings indicate possible roof leaks or plumbing problems.
Inspectors check that windows and doors were properly installed, open and close correctly, as well as look for cracks, decay, or missing caulk that could leave your home vulnerable to the elements. Water can penetrate the wall through structure cracks and separations at the windows, leading to mold growth. HomeAdvisor is a good place to start if you need to replace windows and doors.
Insect and pest infestations
Wood-destroying insects, such as carpenter ants and termites, cause serious damage that can jeopardize the structural integrity of your home. Entering through cracks around doors and windows, carpenter ants prefer wet and decayed wood. They leave behind wood fragments and sawdust.
Get rid of standing water, use a dehumidifier to eliminate moisture in basements and crawl spaces, and trim branches and shrubs away from your home to help prevent an insect invasion.
Rodents spread disease and increase the risk of electrical fires by chewing through wires, wood, and drywall. Keep mice and rats out of your house by sealing exterior cracks with silicone caulk and screening attic vents and chimney openings.
Don’t be surprised by specialty home inspections
Depending on the inspection results, features such as decks and pools, or the age of your house, the buyer might opt for additional specialty home inspections. These include lead, asbestos, mold, radon, soil testing, chimney, pool, and deck inspections as well as further evaluation by specialists for items previously mentioned.
Prepare for the unexpected with a pre-listing inspection
Since issues revealed during a home inspection may delay closing or even cancel a sale, consider a pre-listing inspection to tackle needed repairs before opening your door to prospective buyers. Although you’ll pay an average of $350, you could make more money in the long run.
By taking care of problems ahead of time, buyers won’t need to renegotiate for inspection issues or expect credits for repairs. A pre-listing inspection can help set a more realistic price and bring in higher offers for properties in excellent condition. Buyers might even waive their own inspections if satisfied with your report.
But before scheduling a pre-listing inspection, be prepared for the risk that the inspector could find problems you didn’t know about. You would then have to disclose these issues to all prospective buyers as mandated by most state laws.
Skip inspection stress and repairs with HomeLight’s Simple Sale
If your house needs work and you’re stressed about the defects a home inspector might find, look into HomeLight’s Simple Sale platform. You’ll avoid the hassle and expense of repairs and prep work as well as the inconvenience of hiring contractors and showing your home.
Answer a few quick questions regarding your property, its condition, and your selling timeline. You’ll get a competitive cash offer and sell your home in just 10 days without the risk of inspection issues stalling your sale.
Save time and money by knowing what home inspectors look for
Although it’s still a seller’s market, NAR data shows that existing-home sales fell in August 2023 by 0.7% from the previous month and 15.3% year-over-year.
“It looks like more declines are imminent in the upcoming months, and we’ll likely return to the pre-pandemic home sales activity after the remarkable surge over the past two years,” says Lawrence Yun, NAR’s chief economist, attributing the slowdown to higher home prices and mortgage rates.
Knowing what home inspectors look for could prevent you from losing the opportunity to take advantage of a seller’s market since serious inspection issues could increase the time it takes to sell your house.
After reviewing this guide and checking for signs of potential problems, visit your neighborhood hardware store and watch online tutorials for simple fixes you can do yourself.
A top real estate agent provides access to a network of contractors and other professionals to resolve inspection concerns as well as helps negotiate price or credits.
Major problems uncovered during an inspection can affect your sales price, delay closing, or cause the buyer to walk away, thus putting your home back on the market which could lower its value. If you know what home inspectors look for, you’ll be more prepared to deal with whatever issue turns up.
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