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 Picture this - you're working with your real estate agent and you find the perfect home at the perfect price in the perfect location. You're determined to close on the deal but there is one obstacle standing in your way - the home inspection. After all, a good inspector is liable to figure out that the perfect house you just found is not so perfect.
In this article we're going to help dispel the myth that a perfect home exists. After all even brand new homes are built by humans and they're limited by the materials used and the skills of those building the home. And that's where a good home inspection comes into play - helping you to understand the shortcomings of the real estate you're thinking about buying.
Discovering What's Wrong with a House
So even if you manage to find "the perfect home" a good home inspection can help you understand exactly what's not so perfect about the home you're going to buy - and that's a good thing. Because when you're buying a home you're also buying all of the home's problems too.
As a buyer you're making a large investment in that property and it's nice to understand exactly what you're buying. A leaking oil tank on the property or a septic tank that isn't functioning properly can be expensive to fix. So conducting a series of thorough inspections is a lot like buying an insurance policy against future expenses - unfortunately conducting all of the right inspections can run several thousand dollars.
Six Important Home Inspections
The more complex a house or property is the more inspections it's going to need to figure out if something's wrong. At the very least a home is a complex building of plumbing and electrical networks. At the other end of the spectrum homes can supply water and sewage services too.
To understand if all of the features of a home are functioning properly a buyer may have to conduct as many as six separate inspections:
- General Home
- Termite / Wood Boring Insect
- Well Water Testing
- Radon Tests
- Septic System
- Oil Tank Testing
The remainder of this article will talk about each of these inspections in more detail. We're also going to discuss some of the options you have when a home doesn't "pass" an inspection.
General Home Inspections
Subject to local forces of supply and demand as well as the size of the home a "standard" inspection will generally run around $500. Such inspectors are usually certified by state run agencies and / or are members of nationally recognized organizations such as the American Society of Home Inspectors or National Association of Home Inspectors.
This inspection will cover features of the house such as electrical wiring, plumbing, roofing, insulation as well as structural features of the home. The inspector will then write a report suggesting any improvements or repairs deemed necessary to bring the home up to current standards.
Termite / Wood Boring Insect Inspections
Your general home inspector usually helps arrange for a termite inspection too - which usually runs another $100 or so. This inspector will look for signs of structural damage caused by wood boring insects as well as conditions that might lead to problems down the road - such as wood in direct contact with the earth / ground.
Well Water Testing
If the home has a well that is used to supply the home with drinking water then the well needs to be tested too. Testing water for potability (suitability for drinking) will run $150 or more. Testing will include measures of water hardness as well as heavy metals such as lead, cadmium or arsenic. If you suspect a leaking oil tank might have contaminated the water then you should also test for Volatile Organic Compounds or VOCs.
Included in your testing should be common bacteria such as E. coli (Escherichia coli) - especially if you have a septic tank or farm nearby. You want to use a laboratory certified by your state to conduct such testing and a listing of those approved laboratories can be found on the Environmental Protection Agency's website.
Radon Testing
Radon is a naturally occurring radioactive gas that is a natural decay product of uranium. If you live in New Jersey, New York or Pennsylvania or you're thinking about buying a home in one of these states then you need to be aware of a uranium rich formation called the Reading Prong.
Radon gas can build up in enclosed places and homeowners are encouraged to test homes - especially basements - for the presence of this gas. If you're buying a home you can order a continuous monitoring test for around $200. Once again you can find laboratories certified to perform such testing at the EPA's website.
Septic Tank Testing
If the house you're considering buying has a septic tank then that system needs to be tested too. Septic systems consist of tanks - which are where solids settle - and leach fields where the grey-water is discharged. A simple dye test can determine if the leach field is functioning properly.
If you really want to figure out if the entire septic system is in good operating condition then the tank needs to be pumped out and visually inspected. That service will run about $500.
Oil Tank Testing
At one time it was very common for bare steel fuel oil tanks to be direct buried - meaning these tanks were located underground on the home's property. If the home has an existing fuel oil tank located underground or if records indicate a tank was on the property at one time then the tank and / or soil should be tested.
An underground oil tank test consists of a vacuum or pressure test to determine if the tank is leaking. If the tank is found to be leaking or records indicate an abandoned tank on the property then a soil test for petroleum hydrocarbons should be conducted. Tank and soil testing will cost around $1,000.
Dealing with Sellers
Home inspections will often reveal flaws with a home that can be costly to repair. If your home inspection finds something seriously wrong with your "perfect" home you've got four options:
- Negotiate a Credit with the Sellers
- Have the Seller Pay for Repairs Before Closing
- Buy the Home As-Is
- Walk Away from the Deal
Negotiating a Credit
Many times buyers and sellers of homes expect to negotiate in good faith with each other and that includes coming to agreement on repairs deemed necessary via the home inspection.
Negotiating a credit often means compromise - both parties agree to meet somewhere in the middle and that means extending a credit to the home's buyer. Credits usually take the form of "splitting" one of the closing costs - the seller paying for a cost typically paid for by the buyer.
Seller Repairs before Closing
If the home inspection reveals serious problems with the home that the seller claims they were not aware of then it's reasonable to ask the seller to make the repairs before you buy the home. After all, you made an offer on the home that the seller felt was fair before the problems were revealed.
Now that you've both been made aware of trouble with the home it's time to reevaluate what is a fair offer on the home. The buyer could logically argue that their offer was made, and accepted, before these flaws were known by either party. So the fair thing to do would be to bring the home back to that same point of reference.
Buying the Home As-Is
If you value the home enough you might decide to buy the property as-is. Just remember that your effecting purchase price is the bid you've placed on the home plus the cost of the repairs you need to make.
If you're going to pay for the repairs yourself make sure you have enough money held in reserve to pay for the repairs or if you can afford it roll the repair costs into your new mortgage.
Walk Away from the Perfect Home
As a final option you can always decide just to walk away from your perfect home. But this is often a difficult decision for buyers that have fallen in love with the house they're thinking about buying.
The reason it's hard to walk away from the perfect home is because those feelings usually emotional - not logical. But if you find real estate that is in need of expensive repairs and the seller is not willing to work with you then walking away might be your least expensive, and best, option.
About the Author - Six Important Home Inspections
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