What is A Home Inspection?

Are you new to buying a home?

Then you may have heard about a home inspection and desperately wanted to ask your realtor what they were talking about, but couldn’t bring yourself to raise your hand.

I get it. In the real estate world, we all want to appear confident and in control.  You want to be a real world monopoly tycoon!

Today, you’re in luck because I’m going to show you everything you need to know about a home inspection but were afraid to ask, including how to differentiate it from it from a walk through.

You'll be ready to knock out this important step in the home buying process.

What is A Home Inspection?

I'm not here to bury the lead; in simple terms, home inspection is a thorough examination of a property's condition, typically conducted by a professional inspector. The purpose is to identify any potential issues, defects, or safety concerns in the home. The inspector provides a detailed report to the buyer, helping them make informed decisions about the purchase and negotiate repairs or adjustments with the seller if needed.

A Home inspection aims to assess the overall condition of a property and identify any potential issues, defects, or safety concerns. The key objectives of a home inspection include:

1. **Evaluate Condition:** Examine the structural and mechanical components of the home, including the foundation, roof, plumbing, electrical systems, heating, ventilation, and air conditioning (HVAC) systems.

2. **Identify Defects:** Identify any visible defects, damages, or issues that may affect the property's value, safety, or livability.

3. **Check for Safety Concerns:** Assess the property for safety hazards, such as faulty wiring, gas leaks, or other risks that could pose a danger to occupants.

4. **Provide Information to Buyers:** Offer buyers a comprehensive understanding of the property's condition, enabling them to make informed decisions about the purchase.

5. **Prevent Surprises:** Help buyers avoid unexpected problems by uncovering issues that may not be apparent during a casual viewing of the property.

6. **Negotiate Repairs or Adjustments:** If issues are identified, buyers can use the inspection report to negotiate repairs or adjustments with the seller before finalizing the purchase.

It also educates buyers about the maintenance and care needed for the property, helping them prepare for homeownership.

Why is a Home Inspection Important?

You may come across people in real estate who believe that a home inspection is a waste of money.  It is true that for advanced real estate professionals such as investors, flippers, and people with a background in construction, a home inspection may not be desired.  

However, 86% of homes that had an inspection were discovered to have something that needed to be fixed. This is why 46% of home buyers who get an inspection, use the findings to negotiate on price  and oftentimes save as much as $14,000 off their purchase price.

When you get a Home inspection, you'll be able to understand the true costs of owning a home.

This is because a good inspector is going to walk, crawl, climb, and cover the entire home.  From the crawl space to the roof, a good home inspector is going take a look at areas you most likely didn’t see when you first toured the home before making an offer

For example:

1. **Roof:** Inspection of the roof for signs of damage, leaks, or the need for repairs. This includes checking the condition of shingles, flashing, and any installed roof features.

2. **Exterior:** Examination of the exterior components, such as siding, trim, windows, doors, and the overall condition of the house's exterior walls.

3. **Foundation:** Assessment of the foundation for cracks, settling, or other structural issues that may affect the stability of the home.

4. **Basement/Crawlspace:** Inspection of the basement or crawlspace for water intrusion, structural concerns, and the condition of supporting elements.

5. **Plumbing System:** Evaluation of the plumbing system, including checking for leaks, water pressure, drainage, and the condition of pipes, fixtures, and water heaters.

6. **Electrical System:** Assessment of the electrical system to ensure it meets safety standards. This includes checking wiring, outlets, switches, circuit breakers, and the main electrical panel.

7. **Heating, Ventilation, and Air Conditioning (HVAC):** Inspection of the HVAC systems, including the furnace, air conditioner, ductwork, and ventilation components.

8. **Interior Spaces:** Examination of interior spaces, looking for issues such as water damage, structural problems, and the overall condition of walls, ceilings, floors, and stairs.

9. **Appliances:** Inspection of major appliances that are included with the property, such as the stove, oven, dishwasher, and any other built-in appliances.

10. **Attic:** Assessment of the attic space for proper insulation, ventilation, and any signs of leaks or damage.

11. **Insulation and Ventilation:** Evaluation of insulation in walls and ceilings, as well as ventilation in the attic and other spaces to ensure energy efficiency and prevent issues like mold growth.

12. **Doors and Windows:** Examination of doors and windows for proper operation, seals, and any signs of damage.

13. **Structural Components:** Inspection of the overall structural integrity of the house, including load-bearing walls, beams, and other structural elements.

14. **Fireplace and Chimney:** Evaluation of the condition and safety of the fireplace and chimney, if applicable.

Background of Home Inspections

Don't worry,  this is no AP History Class!

One of the best ways to understand a new concept is to travel back in time and understand where it comes from and the processes that led to its inception.

For Home Inspections in the US, we have to look at the early 20th century.

Believe it or not, home inspections in the early 20th century were less formalized than they are today. During this period, buyers would often rely on their own observations and the word of the seller when assessing the condition of a property.

The post-World War II housing boom in the mid-20th century brought about changes in the real estate market. As homes were being built rapidly to accommodate the growing population, the need for more systematic inspections became apparent.

The 1970s saw the emergence of the professional home inspection industry. Home inspectors began to offer their services to buyers, providing a more objective and thorough assessment of a property's condition. This era marked the beginning of the formalization of standards and practices for home inspections.

In the 1980s, the home inspection industry continued to grow. Recognizing the importance of standardization, professional organizations and associations, such as the American Society of Home Inspectors (ASHI) and the National Association of Home Inspectors (NAHI), were founded to establish guidelines and codes of ethics for inspectors.

The 1990s saw increased awareness among consumers about the value of home inspections. Real estate professionals began to encourage buyers to include a home inspection contingency in their purchase contracts.

In the 21st century, home inspections have become an integral part of real estate transactions. Most homebuyers opt to have a professional inspection conducted before finalizing the purchase. Sellers may also choose to have a pre-sale inspection done to address issues before listing their property.

Different states in the USA have implemented various levels of regulation and licensing for home inspectors. Some states require inspectors to be licensed, adhere to specific standards, and participate in ongoing education to ensure professionalism and competency.

Today, home inspections are considered a standard practice in residential real estate transactions, providing buyers with valuable information about the condition of a property and helping sellers address potential issues proactively. The industry continues to evolve with advancements in technology and ongoing efforts to enhance professionalism and standardization.

How a Home Inspection Works

So far, we've stayed pretty theoretical in our exploration of a home inspection, and if you're still confused, I don't blame you.

In fact, years ago when I first started learning about the home buying process, I felt a little overwhelmed. The fact that I have done multiple transactions now, both as a real estate agent and investors shows that I was thankfully wrong.

Luckily, the home inspection process is more complex in theory than in practice.

I've put together a few steps for getting a home inspection below to help you better understand the steps to getting a home inspection.  I also discuss what to do after you get your home inspection.  As a realtor, taking care of most of these steps is just something that we do for our clients.  I have attended many home inspections and done a lot of the leg work for our clients!  This is one of the reasons we have people calling all of the time to work with us as they buy a home in the Atlanta Georgia area. Ask your realtor if they will do this for you as well.  If you are moving to Georgia, give our team a call and we can certainly help you navigate the process.  

Step #1: Get the Home Under Contract

Getting a home under contract is a crucial step in the home buying process, and it precedes the home inspection for several important reasons:

1. **Legal Agreement:** When you place an offer on a home and it is accepted, you enter into a legally binding contract with the seller. This contract outlines the terms and conditions of the sale, including the purchase price, closing date, and any contingencies.

2. **Contingency Period:** The contract typically includes a contingency period, during which the buyer can perform due diligence, including a home inspection. Contingencies are conditions that must be met for the contract to proceed. The home inspection contingency allows the buyer to assess the property's condition and potentially negotiate repairs or adjustments based on the findings.

3. **Negotiation Leverage:** Having the home under contract provides the buyer with negotiation leverage. If the inspection reveals significant issues, the buyer can negotiate with the seller to address the problems, either through repairs, a price reduction, or other arrangements. Without a contract, there is no basis for negotiations.

4. **Financial Commitment:** Getting a home under contract demonstrates a serious intent to purchase the property. The seller expects the buyer to commit financially by providing earnest money, which is a deposit indicating the buyer's sincerity in completing the transaction. This financial commitment is a key component of the contract.

5. **Property Off the Market:** Once a home is under contract, it is typically taken off the market. This ensures that the seller does not entertain other offers during the contingency period, allowing the buyer to conduct inspections and finalize the terms of the sale.

6. **Streamlining the Process:** Having a home under contract streamlines the overall home buying process. It sets a timeline for important milestones, such as the home inspection, appraisal, and closing, helping both parties coordinate and work towards a successful transaction.

7. **Protecting the Buyer:** The home buying contract includes contingencies to protect the buyer's interests. If significant issues are discovered during the inspection, the buyer may have the option to exit the contract without losing their earnest money, providing an essential layer of protection.

In summary, getting a home under contract is a pivotal step that establishes a legal framework for the transaction, provides an opportunity for due diligence, and allows for negotiations based on the results of the home inspection. It is a critical milestone that sets the stage for the successful completion of the home buying process.

Step #2: Choose your Home Inspector

Choosing the right home inspector is a crucial step in the home buying process. Here are some key considerations and tips to help you select a qualified and reliable home inspector:

1. **Credentials and Licensing:**

   - Check if the home inspector is licensed. Licensing requirements vary by state, so ensure they meet the regulatory standards in your location.

   - Look for certifications from reputable industry organizations such as the American Society of Home Inspectors (ASHI) or the International Association of Certified Home Inspectors (InterNACHI). These certifications can demonstrate a commitment to professional standards.

2. **Experience and Expertise:**

   - Inquire about the inspector's experience in the industry. A more experienced inspector may have encountered a broader range of issues and can provide a thorough assessment.

   - Ask about their specific expertise, especially if the property has unique features or characteristics (e.g., historic homes, specific building materials).

3. **Sample Inspection Reports:**

   - Request sample inspection reports from potential inspectors. A well-documented and detailed report can give you an idea of the thoroughness and clarity of their work.

4. **References and Reviews:**

   - Seek references from previous clients or ask for testimonials. Additionally, look for online reviews on platforms such as Google, Yelp, or Angie's List to get insights into the experiences of others.

5. **Insurance:**

   - Ensure the inspector carries professional liability insurance (errors and omissions insurance). This insurance can provide protection in case the inspector misses a significant issue during the inspection.

6. **Communication Skills:**

   - Evaluate the inspector's communication skills. A good inspector should be able to explain complex issues in a way that is easily understandable and be open to answering any questions you may have.

7. **Equipment and Technology:**

   - Inquire about the tools and technology the inspector uses. Modern tools such as thermal imaging cameras can help identify issues that may not be visible to the naked eye.

8. **Sample Inspection:**

   - Consider attending a sample inspection if possible. This allows you to observe the inspector's thoroughness and ask questions about the process.

9. **Cost and Services Included:**

   - Understand the cost of the inspection and inquire about what services are included. Some inspectors may offer additional services, such as radon testing or termite inspections, for an extra fee.

10. **Timeline for Inspection:**

    - Ask about the expected timeline for completing the inspection. A thorough inspection may take several hours, and you'll want to ensure the inspector allocates sufficient time.

11. **Code of Ethics:**

    - Inquire about the inspector's code of ethics. A commitment to ethical standards can indicate a dedication to professionalism and integrity.

As realtors and investors in our market, we have ordered countless home inspections from several reputable home inspectors.  In addition, we also have a huge network in the real estate field to get the best referrals.  For our clients who need help finding a highly qualified and skilled home inspector, we provide an extensive list of home inspectors that come highly recommended by professionals in the field.  A good real estate agent will assist you in finding a good home inspector.  Be sure to ask your realtor.  As stated previously, if you aren’t working with a realtor, we would love to assist and guide you through this important step.

Step #3: Schedule Your Home Inspection

Scheduling the home inspection is a pivotal step in the home buying process and requires careful consideration. You want the home inspection to take place during the due diligence period of your contract.  This way, should the inspection uncover a major issue with the home, you would still be able to terminate your contract and get your earnest money returned (depending on the laws of your state).  Time is of the essence so don’t delay!

Buyers should aim for a time that allows them to attend the inspection, providing an opportunity to ask questions and gain firsthand insights into the property's condition. Additionally, it's advisable to schedule the inspection well in advance of the due diligence ending date to allow for any necessary negotiations or repairs that may arise from the inspection findings. Clear communication and prompt action during this phase contribute to a smoother transaction and help ensure that the home inspection process aligns with the overall timeline of the real estate transaction.

This is another important part of the inspection process that your real estate agent may be able to help you.  It is not uncommon for our clients to have difficulty being present for the inspection due to their required work schedule or travel schedule.  That is where we come in.  While it is always best if you attend personally, if you are unable, we (or your real estate agent) can be present while your inspection takes place, saving you time and energy.  This is another huge time benefit we provide for our clients.  All good real estate agents will go the extra mile to provide max value for their clients. 

Step #4: The Home Inspection Takes Place

On the day of the home inspection, homeowners play a crucial role in facilitating a smooth and effective process. Here are some key actions that homeowners should consider taking:

1. **Prepare the Home:**

   - Ensure that the home is accessible and that all areas, including the attic, basement, and crawl spaces, can be easily reached. Remove any obstacles or items blocking access to critical areas.

2. **Provide Documentation:**

   - Compile documentation related to maintenance, repairs, and any relevant warranties for systems or appliances. This information can be valuable for the inspector and buyer.

3. **Clear Access to Utilities:**

   - Make sure that the home inspector has clear access to utilities such as water, electricity, and gas. Ensure that pilot lights are lit and that appliances are operational.

4. **Secure Pets:**

   - If homeowners have pets, it's recommended to secure them in a designated area or take them off-site during the inspection. This ensures the safety of both the pets and the inspector.

5. **Stay Informed:**

   - While it's generally preferable for homeowners to be away during the inspection, they should be available for communication in case the inspector has questions or requires additional information.

6. **Be Cooperative:**

   - Cooperate with the buyer's agent and the inspector. Providing a cooperative and welcoming environment contributes to a positive experience for all parties involved.

7. **Address Safety Concerns:**

   - If there are known safety hazards in the home, such as loose floorboards or steps, inform the inspector about them. Addressing potential safety concerns in advance helps ensure a safe inspection.

8. **Set Realistic Expectations:**

   - Understand that the inspector may need to test various systems and appliances, and there may be some noise associated with the process. Setting realistic expectations can help minimize stress during the inspection.

9. **Take Action on Recommendations:**

    - If the home inspector suggests making minor repairs or adjustments, consider addressing them promptly. This proactive approach can positively impact the buyer's perception of the property.

By following these guidelines, homeowners can contribute to a positive home inspection experience. Creating an environment that allows for a thorough examination of the property helps build trust between the parties involved in the real estate transaction.

Step #5: Pay for Your Home Inspection and Receive Your Report

Upon receiving the home inspection report, both the homebuyer and their realtor will engage in a thorough review and discussion to make informed decisions about the next steps in the real estate transaction. The inspection report is a detailed document outlining the condition of the property, and the review process involves several key considerations:

1. **Review of Findings:**

   - The homebuyer and realtor will carefully review the inspection report, paying attention to any issues or defects identified by the home inspector. The report typically categorizes findings into different levels of severity.

2. **Identification of Major Issues:**

   - Major issues, such as structural concerns, safety hazards, or significant system failures, will be a primary focus. These issues may have a substantial impact on the property's value and livability.

3. **Discussion of Options:**

   - The homebuyer and realtor will discuss various options based on the inspection findings. Common options include asking the seller to make repairs, requesting concessions to cover the cost of repairs, terminating the contract, or proceeding with the contract as-is.

4. **Ask for Repairs:**

   - If there are repairable issues identified in the inspection report, the homebuyer may choose to request that the seller address and rectify these issues before closing. Negotiations will then ensue to determine which repairs are reasonable and necessary.

5. **Ask for Concessions:**

   - Instead of requesting specific repairs, the homebuyer may opt to ask for concessions in the form of a price reduction or a seller credit at closing. This provides financial compensation to the buyer to address the identified issues after the sale.

6. **Terminate the Contract:**

   - If the inspection reveals significant and deal-breaking issues, the homebuyer may choose to terminate the contract. This allows the buyer to walk away from the deal without any obligation, often with the return of their earnest money.

7. **Proceed with the Contract:**

   - If the inspection report reveals minor issues that the homebuyer is willing to address on their own or if they are satisfied with the property's condition, they may choose to proceed with the contract without requesting repairs or concessions.

8. **Further Negotiations:**

   - In some cases, there may be a round of negotiations between the buyer and seller to reach a mutually acceptable resolution. This could involve a combination of repairs, concessions, or adjustments to the purchase price.

Effective communication between the homebuyer and realtor is key during this phase, as they work together to navigate the options and make decisions aligned with the buyer's priorities and the overall goals of the real estate transaction. The outcome of this review and discussion process significantly shapes the final terms of the deal and ensures that both parties are comfortable moving forward with the purchase.

Video: Home Inspection

Still not sure you get real estate well enough to understand the Home Inspection Process? We all learn in different ways.

Check out this video to see if it helps you out:

I hope the Home Inspection Process is crystal clear to you now.

Rachael and I first launched the JRB Dream Team brokered by eXp Realty because we want to help people experience the joys of home ownership and the financial security that real estate provides.  We love working with first time home buyers or investors who are buying multiple properties. 

Do you still have questions? No shame in that! You can contact me at Joshua.Boyd@exprealty.com or find me on Youtube, Instagram, or Facebook, where I'm always happy to answer any questions.  You can also click this link to schedule a quick zoom call with Rachael or myself to talk about your upcoming move to Georgia. 

One thing you can do to get started with your home buying search is subscribe to our Living in the Atl Youtube Channel with videos on all things related to Real Estate in Atlanta. We do community tours, introduce you to local eateries, visit local attractions, and take you to places you might not otherwise see.  Planning your move to Atlanta is important, and our channel is dedicated to helping you experience Atlanta from wherever you are in the world.  Reach out to us if you are planning to relocate to anywhere in Georgia, especially in the Atlanta market.