My Perfect Mortgage
Home Inspection Guide: What to Expect and Prepare
3 minute read
February 20, 2017

A home inspection is an important step in the home-buying process - after all, as a buyer, you want the assurance that you're purchasing a property that's in good condition. Therefore, a home inspection is almost always a condition for closing the sale of the property.

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It's important to note that the home inspection is separate from the appraisal. If you are taking out a mortgage to buy the property, you might think of the appraisal as being for your lender and the inspection as being for you. The lender's primary concern is to ensure that the property is worth the sale price of the home so that if you default on the loan, they can sell the property and recoup their loss. The appraisal assures the lender that the property is worth the price you've offered to pay.

The inspection, however, is a much closer evaluation of the property. A good inspector looks for defects or malfunctions in the structure, systems, and land. This includes things like the foundation, drainage on the lot, the condition of the roof, evidence of water leaks, the condition of the plumbing, electrical and HVAC systems, and the condition of appliances. The purpose of the inspection is to protect you, the buyer, from surprise repairs and expenses that might arise immediately after purchase.

Although no inspector is infallible, you should choose your inspector carefully. The inspector recommended by your real estate agent may not be the best choice. Ask for references, and check with organizations like the American Society of Home Inspectors and the National Society of Home Inspectors. These sites also have information on ethical and professional standards for inspectors.

Once you've chosen an inspector, plan to be present with your real estate agent during the inspection. Don't rush (a thorough inspection can take several hours), and don't be afraid to ask questions. The inspector will follow up with a written report, but with your agent present, you can take immediate action if the inspector brings issues to your attention.

If the inspector finds damage or recommends repairs, you have several options:

  • You can negotiate with the seller to have the repairs done before the sale is finalized, or for a lower price to cover the cost of repairs to be performed by you after the sale.
  • You can do nothing and proceed with the sale as is, which may be necessary in a seller's market.
  • You can walk away from the sale - this may be your best option if extensive repairs are required.

It is unusual for an inspection to affect the terms of a mortgage unless extensive repairs are required, or the lender does not approve of an agreement reached by the buyer and seller. However, note that some mortgages, such as FHA loans, require an appraisal that is similar to an inspection.

Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.