You wouldn’t buy a car without taking it for a test-drive. Why would you purchase a house without first checking it out thoroughly?
Some investors, in an effort to cut costs, decide to purchase homes without getting an inspection. In many cases (with some exceptions), this is an unwise idea.
(Exception: If you’re a highly experienced investor or rehabber, you might be knowledgeable enough conduct the inspection yourself – although, even in this case, you should still get a second pair of eyes on the property, such as your general contractor, your project manager, or your mentor or mastermind group.)
If you’re a beginner (if you have less than 10 deals under your belt), getting an inspection is imperative.
- If you’re flipping the property, the inspection will clue you into the issues that your retail buyers will uncover and will alert you to any problems that need fixing right away.
- If you’re a buy-and-hold investor, a home inspection can uncover potentially serious (and costly) issues that may arise over the course of your ownership of the home.
It’s the best way to make sure you know what you’re getting into — and that you’re not spending your hard-earned cash on what could end up being a money pit.
Here are answers to the most common questions that new investors ask regarding home inspections.
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8 Common Questions Investors Have About Home Inspections
How Long Will it Take?
Most home inspections take 2-3 hours, but yours could be shorter or longer based on the size of the house, the house’s age and how many issues the inspector uncovers.
How Much Will it Cost?
Home inspections on average cost around $300-$500. This may seem like a lot of money, but it’s a drop in the bucket compared to an unexpected repair that blows your profit margins.
Who Should Be There?
You should be present at the home inspection. Your project manager or contractor may opt to attend as well.
How Do I Find a Good Inspector?
Poll other real estate investors in your area for recommendations. Your real estate agent can provide you with referrals to home inspectors they’ve worked with before. Check that your inspector is licensed to work in your state and that he or she has positive customer reviews from people whose opinion you trust.
What Will the Inspection Cover?
The inspection will cover many things both inside and outside the house, including:
- Exterior: Checking foundation, doors and windows, the house’s frame, steps, siding, any decks or patios, driveway, sidewalks and lot
- Roof: Checking the roof itself and its drainage system and gutters
- Electrical: Making sure wiring is up to code, including circuit box, circuit breakers and fuses, testing any major appliances that will come with the house
- Plumbing: Making sure pipes are in good condition, checking water pressure and water shut-offs, water supply and hot water heating system, testing fixtures and faucets to make sure they work properly
- Heating and cooling: Checking furnace and A/C (if there is a central A/C system), inspecting vents, fireplace (if applicable) and insulation
- Interior: Identifying any cosmetic damage and checking for signs of water damage, leaking, etc.
- Safety: Checking smoke alarms and carbon monoxide detectors, testing safety feature on automatic garage door (if there is one), checking handrails on steps, investigating for signs of mold or pest infestation
Will the Inspection Tell Me Much it Will Cost to Fix Issues?
No. Inspectors are only able to point out existing or potential issues, not recommend a course of action or estimate the price to fix them.
Can I Ask Questions?
Absolutely. If there’s something about the inspector’s findings that you don’t understand, feel free to ask her for clarification. She won’t be able to quote the cost to fix an issue, and she can’t make personal recommendations like how she would go about fixing it, but she can show you what’s wrong and help you understand why it’s worth your concern.
You’re also welcome to bring up any issues you noticed when you were walking through the home yourself. She can let you know whether they warrant concern or not.
Can I Re-Negotiate If the Inspector Finds Something Wrong With the House?
Yes, assuming your offer was contingent upon inspection.
Your original bid was based on assuming the house held a particular condition, and if the inspection uncovers any major unanticipated issues that will be costly or time-consuming to fix, it’s absolutely within your right to go back to the negotiation table.
Remember: You can make an offer with an inspection contingency on a house that’s sold “as-is.” The seller may not facilitate repairs on your behalf, but they may reduce the price, or you may decide that you don’t want to follow through to closing.
Investors: What questions would you add to this list?
Let’s get them answered in the comments section!