The home buying process really starts after your offer is accepted. You may spend days negotiating back and forth but once your offer is accepted you are on the clock. At this point the very first thing you need to do is have the property inspected. It is not an exaggeration to say that the inspection may be the single most important thing you will do when buying a home. If there is excessive damage the process may come to a screeching halt. Only if the property receives a clean bill of health should you proceed. If you are on the fence as to whether or not you need an inspection the answer is a resounding YES!
It is important to remember that the inspection is done for your benefit. There is often some confusion as to the difference between the inspection and the appraisal. The appraisal is an estimation of value ordering by the lender to support the purchase price. The inspection is done exclusively to make you aware of any potential issues with the property. The inspection is done by an independent party that has no ties to either the buyer or seller. They will give an objective view on the condition of the property. When they are completed they will give you a summary report on their findings. From there you can make a decision on whether or not you want to proceed.
The inspection gives a look at the major systems of a property. Many of these items cannot be seen on the surface or recognized by the average buyer. These items include the furnace, central air, major electrical, plumbing, foundation, roof, basement and appliances. The inspection also includes checks for mold, radon and many other items you may not consider. They test all of these items and make note of the current condition and any items that may impact the useful life. The inspection will tell you what is wrong but does not provide an estimate of the cost of repairs or how long the item may last.
A clean inspection is a green light to move forward. Depending on the findings of the inspection you may still proceed even if there are issues with the property. You can use these items to re-open negotiation. You can ask that the seller either reduces the purchase price or provide compensation to have the items repaired. If the issues are minor in nature you can still move forward knowing that they will have to be updated at some point in the future. The most important items are safety concerns. Issues with electrical, foundation, mold and radon have to be rectified before you move forward with the purchase. Cosmetic items are often solved with a seller credit or in a reduction of the purchase price. With any negative inspection items it is important that you go through them line by line with your real estate agent. Most contracts give you an out based on the inspection results. If you are not comfortable with the inspection findings now is the time to walk away.
The inspection results will go a long way in determining how the rest of the transaction goes. Treat this step of the process as serious as it is. Understand your inspection and know exactly what you are buying.