Home Inspection: Costs, Process and Tips
During a home inspection, a professional evaluates a house’s physical condition and recommends repairs. This can offer homebuyers and homeowners protection from hidden physical dangers and unforeseen financial emergencies.
It’s common for homebuyers to use home inspection results as leverage to negotiate a lower home price. Home sellers can use an inspection to find out what fixes should be made before putting their houses on the market.
What is a home inspection?
A home inspection occurs when a professional is invited to view a house’s entire physical structure, from the foundation to the rooftop. Its purpose is to discover anything that needs repairs or replacement, so that everyone involved in a real estate transaction — seller, buyer and mortgage lender — is aware of issues that could impact the home’s value.
Home inspection vs. home appraisal
An inspection looks at the structural health of the home, while an appraisal gives a firm estimate of the home’s value. Here’s more on the differences between a real estate inspection versus appraisal.
How much does a home inspection cost?
The national average cost of a home inspection is $400, according to Fixr.com.
However, a home inspection can cost anywhere from $125 to $1,000, depending on the home’s location, its square footage and the specific type of inspection. The age of your home and how competitive the local market is can also come into play.
Who pays for a home inspection?
The price of a purchase home inspection is typically paid by the homebuyer and included in their mortgage closing costs. However, in about 20% of cases, the sellers pay for the inspection. When the seller pays, it may be part of a “closing cost assistance” package.
Tip: How to negotiate who pays for a home inspection
The best way to find out if a seller is willing to cover some of your closing costs — potentially including the home inspection — is to ask. If they won’t agree to covering all the costs you’ve requested, you can counteroffer by asking that they meet you halfway. You can also negotiate to bring down the home price by the amount the inspection costs, which indirectly puts the burden on the seller.
Understanding the home inspection process
When do I need a home inspection?
→ If you’re buying a house, you’ll typically want to arrange for an inspection as soon as your offer has been accepted. Your contract should include a clause that’ll let you back out of the purchase if a home inspection uncovers issues that can’t be satisfactorily resolved.
→ If you’re selling a house, you may want to get an inspection before putting your home on the market. That way, you’ll know what fixes your house may need. This is especially relevant if you want your home to fetch the highest price possible.
→ If you’re building a house, you should get an inspection after construction is done, but at least a week or two before your closing date. The earlier you discover any problems, the more time you have to fix them.
How long does a home inspection take?
A home inspection on a single-family property typically takes two to four hours, and it can take one to two days for you to receive the inspection report. This document will include all the findings — complete with photos — and recommendations.
Tip: Attend the inspection
Both the Consumer Financial Protection Bureau (CFPB) and The American Society of Home Inspectors (ASHI) encourage homebuyers to be present at the inspection. It’s not required — but if you are there, you can ask the inspector questions, see what they see and potentially learn extra details you may otherwise have missed.
What do home inspectors look for?
Home inspectors look for signs of current or potential problems in the home, particularly with parts of the home that would be expensive to repair. Items they check for include cracks in the foundation, leaks in the roof and any issues with structural systems, including heating, air conditioning, electrical and plumbing.
Home inspection checklist
What is and isn’t included in a home inspection can vary depending on the property. In general, these are the areas ASHI lists in its standards of practice:
- Structural: Foundation, floor, wall, ceiling, roof
- Exterior: Wall coverings, exterior doors, decks, balconies, porches, eaves, retaining walls, walkways, driveways, grading, surface drainage
- Interior: Steps, cabinets, doors, windows, installed appliances including microwaves, dishwashers and food waste grinders
- Systematic: Basic plumbing, electrical, heating and cooling, the insulation and ventilation of areas including the attic, foundation, kitchen, bathroom and laundry
What isn’t included in the home inspection report?
A home inspection is a visual process — anything that’s hidden behind walls or under floors, or that isn’t immediately accessible, may not be discovered. Additionally, ASHI lists the following categories as excluded from an inspection report:
- Exterior features attached to the house: Screening, shutters, awnings, seawalls, break-walls, docks
- Recreational facilities: Swimming pools, tennis courts, basketball courts, spas and saunas
- Exterior features distanced from the house: Fences, boundary walls, geological and soil conditions
- Specialty testing for: Asbestos, radon gas, lead paint, toxic mold and pests
- Interior features: Paint, wallpaper, floor coverings, window treatments, certain appliance functions, including indicator lights, timers or thermostats.
Tip: Order a specialized inspection
If you’re worried about a certain issue that’s not typically included in a standard home inspection, you can order a specialized inspection tailored to your needs. Here are some example inspection types and how much they might cost:
- Windows: $75-$150
- Insulation: $100-$200
- Roof: $100-$600
- HVAC: $250-$400
- Foundation: $300-$1,000
- Mold: $300-$800
- Septic system: $1,300
- Termites: $50-$200
- Wind mitigation: $75
- Energy efficiency and “green” systems: $350
Home inspection results: What if a home inspector finds something wrong?
Anything that requires a repair or replacement will be noted in the inspection report. As the buyer, you’ll need to decide how important each of these repairs are: Would you buy the house as-is, or are some (or all) of these issues deal-breakers?
Once you’ve decided which repairs are essential to the deal, you can ask the seller to cover the costs and have the work done before you close on the house and move in. In order to avoid the sale falling through, many sellers are motivated to make the needed repairs and cover the cost.
If the seller doesn’t agree, don’t give up — it’s time to negotiate. On average, a homebuyer can negotiate $14,000 in savings based on the home inspection findings, according to a survey from Porch.com.
Tip: How to negotiate after a home inspection
If you’re buying a house that comes back with issues on its home inspection report, you have the opportunity to negotiate with the seller. Here are three strategies to consider:
- Reduce the purchase price. A seller who doesn’t want to deal with making repairs may be willing to subtract the cost of repairs from the purchase price. You can then take on the labor of getting the work done once you’ve purchased the home.
- Ask for a closing cost credit. A seller may be open to paying some of your closing costs. You can then turn around and use the money you saved to make the fixes yourself.
- Walk away. If a seller is truly unwilling to budge, even after an inspection shows problems, you may need to walk away from the deal. Luckily, in most cases you’ll be able to get the money you paid with your offer – also known as earnest money — back.
How to find a home inspector
The majority of people find their home inspector on the recommendation of their real estate agent. But you don’t want to go in blind — make sure to check the history of a home inspector before you use their services.
Ask for references from friends, family and your real estate agent. Check out customer reviews on their website and the Better Business Bureau (BBB). Depending on where you live, inspectors may not need to be licensed. If they are licensed, look them up with your state or county licensing agency.
Frequently asked questions
Be wary of problems that are safety issues (rather than simply upgrades), as well as those that are complicated or notoriously expensive to fix. If you’re facing all three issues, that’s the biggest red flag possible in a home inspection.
If defects that didn’t make it into the home inspection report are found after the fact, liability depends on the exact circumstances and the laws in your state. It’s possible to hold an inspector, a builder or a home seller liable— but you’ll need solid legal justification if you want to sue successfully.
A home inspection report is generally good for around 90 days, and if you fail to close within that window, your lender may require another inspection. That said, a home’s condition can change at any time — imagine, for example, a tornado hits the day after the inspection. You’ll have to use your judgment when assessing how old is “too old” for an inspection to be useful to you.
Yes, even new homes can have issues and flaws. In fact, about 24% of new homes come back with issues serious enough to delay closing, according to the National Association of Realtors (NAR).
No. Home warranties don’t always cover all of a home’s components, and they don’t assess your home’s current condition.
No. Home inspections aren’t designed to give a pass-or-fail grade on a home. Ultimately, a prospective buyer has to decide if the issues revealed are worth negotiating with the seller to fix, if a deal can be made for sellers to lower the home price or cover a portion of closing costs — or if it’s just better to walk away from the transaction.
ASHI inspectors aren’t allowed to have conflicts of interest — such as compensating real estate agents for business referrals or inspecting a property in which they have a financial stake. They’re also not allowed to act in bad faith and knowingly overstate or understate the conditions of the home.
Further, home inspectors may be limited in the advice they can provide — they aren’t required to give engineering or architectural services. Inspectors also won’t take risks such as walking on the beams in an unfinished attic or entering a tight crawl space.