Home Inspections: A Checklist for Buyer Confidence

By: , Contributor

Published on: Mar 21, 2020

What defects and end-of-life components lie beneath that fresh coat of paint? It's for a seller to know, an inspector to discover, and a buyer to negotiate.

A home inspection is an important part of the homebuying process. In some states, sellers do their own home inspection, typically with a professional home inspector that they hire, and then buyers can do an optional inspection once a home is under contract. In other places, the seller is only responsible to provide disclosures. Someone on the buyer's team arranges the inspection with a professional inspector of their choice, with the goal of resolving all issues before closing.

A home inspection checklist has a lot in common with a disclosures checklist, but not everything. That's why even in states where it's not mandatory, sellers often choose to get their own inspection. That way they know before beginning to show their house what's damaged or in disrepair, and they can take any necessary steps to fix the issues before they derail a sale.

The professional home inspector

Home inspectors complete coursework of between 40 and 140 hours, depending on the state. They often get hands-on training from an accredited program. Individuals then are required to pass an exam and complete an application. Most states also require home inspectors to be licensed.

Getting a home inspection as a seller

As a seller, you are not always required to do a home inspection prior to putting your house on the market. The rules vary according to where you are. However, if you decide to have an inspection, it makes sense to hire a professional inspector instead of trying to do your own.

Why do a home inspection as a seller?

If a home inspection is not required in your area, the reason to still do it is twofold: First, you'll then know ahead of time the condition of systems and structural components in your home. There won't be any surprises when the buyer's home inspection arrives.

The other reason is because you can typically write your disclosure statement based on the information you get from the home inspection.

When to do it?

If you are getting a home inspection as a seller, the best time is before you put your home on the market.

The information on a home inspection checklist

A home inspection checklist will contain sections on structural components of the home, exterior components, the roof (often this is a separate category), electrical systems, and plumbing. It will also have areas for noting general information, such as the age of the building and whether there's visible water damage.

What is the information used for?

The information can be used by the seller to identify what in the home to fix or update. One purpose in doing this is to gain confidence in your asking price, since you'll be certain of the home's condition. Other reasons are related to this one. For example, if you prepare your home based on what you learn from the inspection, you're likely to get higher scores from the buyer's inspector, which should lead to a smoother sale process and no haggling over the asking price.

Getting a home inspection as a buyer

Inspection is an important step in the purchase process, to help buyers either be confident in the home they've made an offer on or to make them aware that not all is right with the property and that they should request repairs or a lower asking price.

Why do a home inspection as a buyer?

A home inspection allows you to have a professionally trained eye chosen by your agent look over the property and rate all the critical components using a standard checklist. This person, a professional inspector, will create an inspection report that can help you make a much more informed buying decision.

When does it happen?

The home inspection happens after an offer has been accepted and the home is under contract -- but very early in that process, only a few days after escrow is received. This gives plenty of time for the follow-up steps.

What is the next step after a home inspection is completed?

After a home inspection is completed, a buyer notes what repairs they would like to be made and puts them in writing for the seller. The agents usually act as liaisons for this part of the process. With negligible flaws -- e.g., a missing roof shingle or crack in the door -- the seller may push back about getting them repaired.

However, usually, when a buyer points out something on the home inspection that has been noted as being in poor condition or having defects, the seller will agree to either fix it or put a concession in the purchase contract that covers the cost of having a professional come out to make the repair.

Home inspection checklist details

Should I DIY a home inspection checklist?

It's a lot easier to get a general understanding of what's included in a home inspection checklist than to try to complete one yourself. There are a lot of searches online about "DIY home inspection checklists," and many of the components listed may be familiar to you. But really, there's no reason for anyone who doesn't come from a construction industry background to attempt to create one from scratch, as professional inspectors are expected to have them anyway.

What is typically on the inspection report, and how is it organized?

An inspection report is organized in broad categories:

  • Exterior.
  • Structural.
  • Air conditioning.
  • Insulation/Ventilation.
  • Electrical.
  • Plumbing.
  • Roof.
  • Additional.

Each category contains a section with key components, and the inspector rates their condition on a standard scale:

  • Below average.
  • Average.
  • Above average.

Additionally, each category has a section for observations and a section for details about the key components. Lastly, there's a notes section, and then a place at the end of each section for the inspector to provide an authorized certification, signed and dated.

Why should the buyer and seller have different checklists?

The buyer and seller should have different checklists because neither party would be instinctively prone to trusting the other's inspector. Through comparing inspections, they can determine what items get consensus from trained professionals.

Furthermore, the two will have different questions and priorities. For one example, the seller needs to include items on the disclosure statement that may come up during the title search, such as renovations done to the house. The buyer may have questions about things that don't even need to be worried about, such as attics and crawl spaces that may not even exist, or a roof or yard area that is actually property of the condo association and not the homeowner. A seller might not put these items on their inspection checklist, whereas the buyer's checklist will bring them up and allow the buyer to learn that they're not a concern.

Why is the checklist for a home inspection important?

The checklist is important because it provides a thorough and detailed standard for inspecting a home. While not every item on a checklist will be inside a home, it's better to have some fields be N/A rather than relying on an inspector's memory and taking the risk of inadvertently missing an important component.

Results -- the home inspection report

If this is part of the selling process, getting the completed home inspection back is an anxious moment (though not necessarily the most anxious; there are many). Hopefully, the seller has done plenty of prep and work around the house beforehand, and the home inspection results will be fairly positive.

What if the home fails?

The home inspection report isn't a letter-graded exam, and there are a lot of different elements to it. Therefore it won't come back as a Fail. It won't come back with perfect marks either. There's a lot of middle ground. Usually, a number of components will come back as "Average," and there will be a few defects noted.

However, only major issues, or what the industry refers to as "Material defects," are serious enough to worry about. If there are material defects that adversely affect the value of the property, that could be seen as a poor grade. If the material defect creates an unreasonable safety risk, that's the equivalent of an F, although it can possibly be corrected.

What if low marks/defects are found?

According to the International Association of Certified Home Inspectors, there are regular defects and material defects. The latter must be reported, as they pose either "significant adverse impact on the value of a property" or a safety hazard to people. Material defects are very likely to derail a sale altogether, pause the entire process while the seller makes the property whole, or at the very least significantly reduce the asking price.

As for smaller defects, those may not even make it onto the report, or they may be briefly noted ("one missing shingle") and not even remarked on by the buyer. On a similar note, if an appliance -- for example, a water heater -- is observed to be near the end of its useful life, even noting that information is at the discretion of the home inspector. The purpose of the inspection is to provide the potential buyer information that helps them make smart decisions about the purchase, but not necessarily to provide an exhaustive list of every defect and flaw.

If the seller has ordered the home inspection, they may actually want a more detailed report, since they can use the info provided to decide whether they want to address certain non-material defects or components that are below average. For example, if a water damage crack is found in a door, they may decide to replace the door rather than having to deal with a buyer getting suspicious halfway through a transaction that damage to the door may mean rot in the walls.

What fixes are mandatory?

In one sense, nothing is mandatory. In fact, in certain parts of California where the property market is at its most competitive, it's pretty standard for buyers to waive their right to an inspection. If they do get one, they know that responsibility for any repairs is on them.

But in more reasonable markets, material defects typically need to be remedied before attempting to close a real estate transaction. These can include an old or unfinished roof, foundation cracks, major water damage, unsafe steps, rusted electrical and HVAC components, and significant structural issues, such as uneven walls.

How do you negotiate repairs and other work?

Because this is a sensitive -- and potentially expensive -- discussion, usually the two real estate agents act as intermediaries and pass requests and responses back and forth. The seller has the option to make the repairs, provide a credit (also known as a concession) to the buyer that will cover the cost of the repair, lower the asking price, or simply refuse to do anything. They go on an item-by-item basis, typically agreeing to some fixes but not all.

There is a clock running on the seller when it comes to repairs. They need to either complete them or agree with the buyer on a concession before closing. The other option is to ask for an extension on the closing date, but since sellers are typically eager to close, this isn't their favorite solution.

What's bad enough to justify walking away?

If a material defect constitutes a safety hazard, it's often a good idea to walk away unless there's a clear path to fixing it. Also, if a material defect is so major that it will end up being a major financial burden on the new homeowner in future years, like structural issues or water damage throughout the house, many buyers will decide to walk away.

If a home inspection uncovers many systems and structural components that are in poor condition or nearing the end of their useful life expectancy, and the seller refuses to budge on the asking price or acquiesce to making repairs, this could also eventually be grounds to walk away.

Home inspections are a helpful step, though not always an enjoyable one

For buyers, the home inspection checklist is a document that provides them with confidence and insight. For sellers, it's usually the basis for an expensive to-do list. Nonetheless, in any honest residential transaction, it's an important part of the process.

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