Why Is a Home Inspection Important?

Mold in the crawlspace... Plumbing that’s past it’s prime... A roof that leaks into the attic during heavy rains...

What do all these things have in common? Obviously, they’re all things nobody wants to have in their home. What’s more, they’re all “under-the-radar” problems that can arise without the knowledge of the homeowner. And, perhaps most importantly, they can be dealbreakers when buying, selling or insuring a home.

Fortunately, there’s an easy way savvy homebuyers and home insurers can identify problems in the home and assess their risk before investing money: They can request a home inspection.

What is a home inspection?

Performed by an unbiased, certified professional, a home inspection is meant to give an accurate picture of the condition of the home before any contracts are signed or policies are issued. A home is likely the biggest purchase you’ll make in your life, so you’ll want to know exactly what you’re getting before you buy one. Depending on how proactive the seller is, they may have their home inspected before putting it on the market. (Bonus points go to sellers who address whatever issues are found prior to listing the home.)

If the owner has not already had an inspection done, it will likely be the buyer’s responsibility to cover the cost. Be aware that, as the buyer, you’ll pay for the inspection out of pocket at the time it’s performed, which will happen before you decide whether to commit to purchasing the home or not.

How much does a home inspection cost?

Most homebuyers opt for a standard home inspection (typically costing between $200 and $500). The inspection takes three to four hours to perform and will involve a close examination of the home’s structure—both interior and exterior—as well as its HVAC (heating, ventilation and air conditioning) system, electrical work, plumbing, and water and sewer systems. The inspector will examine the basement, attic and accessory structures like a garage. They may identify things like building code violations that occurred during renovations, such as when a garage was converted to a bonus room or when a deck was added.

If specific things need to be checked for (like pests, radon, asbestos or lead-based paint), a specialized home inspection may need to take the place of a standard inspection. Depending on what’s being checked in a specialized inspection, it will likely require a different type of inspector, and costs will be higher than a standard inspection. A specialized home inspection is also advisable after a standard inspection turns up a problem, like mold or termite damage.

Inspecting a house for an insurance policy

Not all home inspections are part of the homebuying process; they also can happen when you apply for new coverage from an insurance company. The lender who holds your home loan will require you to maintain home insurance to protect their investment. The home insurance company may, in turn, want the home inspected to know the level of risk involved and the cost to rebuild. They’ll use the information to gauge the home’s replacement cost, to help determine whether they will offer coverage or not, and to set the cost of the policy. (The home insurance inspection is one of several criteria the insurance company may use to determine insurability.)

A home inspection that may be done as part of the application process for buying homeowner’s insurance is usually called a 4-point inspection because it focuses on four specific parts of the home: the roof, electrical system, plumbing and HVAC system. In contrast to a standard home inspection, a 4-point inspection usually takes about 30 minutes and provides a simple “pass” or “fail” grade. Typically, the insurance company will pay for this inspection.

Depending on the state where the home is located, the insurance company may also require a wind mitigation inspection to confirm the structure is up to code and can withstand severe winds.

There are several advantages to having a home insurance inspection. It may reveal hidden problems that you can address before they get worse. It can also call out good things—like working fire alarms and security systems—that may qualify you for policy discounts. And, by giving a clear picture of the home’s condition and risks, it can help you to avoid paying for coverage you don’t need.

Finding a reputable home inspector

A good place to start your search for a reliable, trustworthy inspector who meets your needs is by asking an experienced real estate agent. They will have worked with numerous home inspectors and should be able to recommend a good one. Friends or family who have recently bought a house may also be a good source for a recommendation. And you can always read local online reviews to see what other people thought about the home inspectors they used.

8 questions to ask a potential home inspector

Before you hire the inspector you’re interested in, verify that they are licensed and insured and consider asking them these eight additional questions.

1. How much––and what type of––experience do you have?
   Generally, the more experience the better, but a newer inspector might have a more experienced inspector helping them. Make sure the inspector specializes in residential, not commercial, inspections. Your inspector should also have specific relevant experience, such as with older or more recently built properties.
2. How long will the home inspection take?
   A thorough home inspection should take three to four hours. An older home might take longer. If your inspector isn’t expecting to take that long, the inspection might not be comprehensive enough.
3. What will you inspect?
   The inspector should evaluate every visible aspect of the home, from the basement to the attic and roof, as well as the water heater, HVAC system, plumbing and electrical box. Also, he or she should verify all the home’s systems are in compliance with local codes.
4. How much will the home inspection cost?
   As already mentioned, you can expect the cost of a home inspection to be anywhere from $200 to $500 or more for a standard inspection—but don’t just choose the cheapest quote. A thorough inspection could pay for itself many times over if it uncovers a single issue that could save you thousands of dollars in future repairs or justify a reduced purchase price.
5. Will I be able to attend the inspection?
   You should be able to attend, observe, ask questions and learn. This is your chance to see your prospective home through an expert’s eyes.
6. What kind of inspection report will you provide? May I see a sample?
   By reviewing a sample report, you can see if you’ll be able to understand the inspector’s reporting style.
7. Could you provide references from your three most recent jobs?
   Ask these references how thorough the inspector was and how comprehensive the report was.
8. Are you a member of a professional home inspector association?
   There are several major organizations for home inspectors. Membership in one, such as the International Association of Certified Home Inspectors or the American Society of Home Inspectors, indicates a level of seriousness and professionalism, as well as a desire to keep skills and knowledge up to date.
   

Preparing for your home inspection

If the inspection is for a home that’s already yours, conduct your own check before the professional inspector does theirs—it might help you avoid being caught off guard by problems you didn’t know about. You’ll want to do a thorough job reviewing as many of the following exterior and interior items as possible.

• Roof. Have a roofer check for loose, damaged or missing shingles.
• Gutters. Check for debris and confirm all gutters are secure.
• Foundation. Look for cracks or other signs of damage.
• Surrounding property. Remove loose debris and any pools of standing water that could lead to pests.
• Fire extinguishers, smoke alarms, carbon monoxide detectors. Make sure these items are charged and in good working order.
• Ceilings and walls. Look for signs of damage from water or pests.

On the day your home inspection is scheduled, make sure there is easy access to the home’s major systems. If the home is new, check that the electricity and water are turned on. Have receipts on hand for any updates or renovations made to the home. Finally, be prepared to point out any issues you already know about to be sure they’re addressed.

Next steps if denied insurance coverage due to inspection results

If your home doesn’t pass a home insurance 4-point inspection, you have several options. Making the necessary repairs is often the most straightforward solution. If you feel the insurance company’s denial of coverage is unreasonable, you can dispute the decision or even file a complaint with your state’s insurance department. When all else fails, it might be time to find a different insurer, possibly even getting coverage under a state-run Fair Access Insurance Plan.

A lapse in home coverage is a risk that you should do whatever you can to prevent. Being without home insurance exposes you to the consequences (and financial responsibility) of any home incident that occurs, including things like property damage from a storm or a liability claim from someone injured on your property. The company that holds your mortgage may even initiate an expensive lender-placed insurance policy to protect their investment in your home.

The bottom line

Whether you’re buying a home or simply exploring options to insure it, having a certified, professional analysis of its condition will help mitigate some of the risk that comes with home ownership. And you’ll be able to rest assured knowing that you are helping protect your health, safety and financial situation from perils you may not even have known about prior to the inspection.