Home buying or purchasing an investment property can be the most expensive type of investment you will make in your lifetime. One important thing you need to be aware of when you submit your offer is that the contract is contingent or subject to change based on THE home inspection. Of course, you have to pay for it. It will be your very first investment into the home before signing on the dotted lines at closing.
But are inspections important? Can I just skip it?
Inspections are very important and I strongly advise anyone who is about to invest in a property to not to opt out on getting one unless they plan on demolishing the entire home or gutting it and then starting over from scratch.
“But I can tell that the home is in good condition.”
Well, unless you are a psychic or you are a contractor who has built and repaired homes for a long time, you are not qualified to tell if the home is in perfect, great, good, fair, or poor condition. Well maybe you can tell if its poor but all the other status types, you are not qualified!
You and your home inspector see things differently. What may be insignificant to you, a home inspector may see as red flags. They are also trained to utilize certain tools and to look for certain things that could cost a lot of money if ignored. So, unless you want a money pit, it’s best to hire a professional who can thoroughly inspect the home, give you a detailed report so that you can make an informed decision which would allow you to negotiate the terms of the contract if work needs to be done.
Here in New York City, before you sign the contract, the inspection should be done. This allows you to walk away from the property with no strings attached if it has too much work that needs to be done and the seller doesn’t want to negotiate any repairs or drop the pricing.
So, how do you find a good inspector?
There are many ways to pick your inspector. Most of the time, people choose their inspector based on their real estate agent or broker’s suggestion but you may also ask your friends, relatives, and co-workers if they know anyone who has worked with them before.
You can also research online who you may want to work with but please do remember, you don’t have an infinite amount of time to pick someone. You are only given a couple of days in order to do an inspection, so time is of an essence. Remember, you aren’t in contract yet, so the longer you take, the more likely someone can come, swoop in, and take the property right from under you! Just because you have an accepted offer, doesn’t mean the property is locked in and yours!
Most inspectors are part of the American Society of Home Inspectors, although membership in this organization doesn’t ensure that the inspector knows what they are doing. Many states do require home inspectors to be licensed.
Call a few inspectors, compare their rates, find out who can schedule the inspection appointment quickly, and check their reviews. It’s best to hire inspectors that can do specialization inspections as well such as mold, flood, and infestations by annoying pests.
While you’re at the inspection…
You will need to sign a contract or paperwork with the inspector noting what the inspector will be inspecting. It’s just common practice and covers their liability as well as giving you an idea what to expect during the inspection. During the inspection you can ask about things that may concern you and take note on what repairs that will need to be done. In order to complete the report, most inspectors expect payment at the appointment.
What does inspections cover?
They focus on the condition of the house as well as structural issues but generally they look over:
- Heating and air conditioning
- Water seepage
- Toxic chemicals
- Insect or rodent infestations
- Code violations
- Construction defects
After inspection – Negotiations
After you get your final report and estimates from your inspector, you can give that information to your attorney and your attorney will discuss negotiations with the seller’s attorney. Negotiations can either be:
- The seller repairs the issues or gives credit (discount on the home)
- Canceling you offer and walking away
You could also just buy the property with the issues and not bothering to negotiate anything. The choice is yours. Sellers do not have any obligation to fix anything if they don’t want to but if they want to get rid of the house ASAP, they may be willing to work something out in your favor.
If you have a great realtor as well as a great attorney by your side, you will have no worries in finding a great inspector and getting everything rectified. Just keep in mind that you may have to walk away from the home if the seller doesn’t want to budge.
Also, if you notice that your inspector is being pressured to give a fair inspection by your real estate agent, I suggest that you hire a more neutral inspector and maybe even consider a different realtor. You never want to pick someone who may seem to be influenced by any of the parties involved in purchasing your home. This will be your house, this will be your money that you are investing into your house and you don’t want a lemon!