When you put an offer on a house, you may do so with the belief that you know everything there is to know about your future home. The truth is, there’s a lot that goes on behind the scenes that you may not be aware of – and you definitely want to know about.
This is where a home inspection comes in.
A home inspection is arguably the most important stage of the escrow process, as it determines the direction of the deal.
A professional home inspection can offer much-needed reassurance to home buyers by allowing them visibility into any potential problems before closing on the home.
The home buyer can then determine whether they want to continue with closing, or request that the seller make any repairs. They can also back out of the deal.
Home inspections involve hiring a professional to conduct a non-invasive, visual examination of the house to assess it for any physical defects or issues with systems in the home. This includes:
- Grounds and exterior structure
- Interior rooms
- Electrical systems
Keep reading to learn more about the home inspection process with this step-by-step guide, so you can be prepared to cross this bridge when you get there.
1. Home Inspection Contingency Is Placed
A home inspection contingency (also called a “due diligence contingency”) gives the buyer the right to have the home inspected within a specified time period, typically 1-2 weeks.
It protects the buyer, who can cancel the contract or negotiate repairs based on the findings of a professional home inspector.
A cost-of-repair contingency is sometimes included in addition to the inspection contingency. This specifies a maximum dollar amount for necessary repairs. If the home inspection indicates that repairs will cost more than this dollar amount, the buyer can elect to terminate the contract.
In many cases, the cost-of-repair contingency is based on a certain percentage of the sales price, such as 1% or 2%.
2. A Home Inspector Is Chosen
The next step is deciding on a professional home inspector. Most real estate agents have relationships with inspectors and can recommend one in your area they trust.
You can also do your own research on home inspectors in San Diego and go from there. The buyer typically chooses the home inspector.
You’ll want to be sure the person is bonded and insured, and that the company only does inspections rather than repairs and renovations. This will help to ensure that they do not try to coerce you into making costly repairs for their own benefit.
Be sure to also have a good understanding of what the inspection includes and how long it takes. This is also the right time to discuss what additional inspections you may need and ask if they can do all of them.
You should also agree on a price. A home inspection in San Diego typically costs anywhere from $250-$450, depending on the size and location of the home.
3. Inspection Day Comes
The day of your home inspection is finally here! Your home inspector is the expert, but there are still things you can do as the buyer to ensure the process goes smoothly.
First, be sure to voice any concerns or call attention to anything you noticed around the house that may need to be looked at further.
It is recommended that you attend the home inspection so you can see any damage firsthand and ask questions, so you can have an in-depth understanding of what you’ll find in your home inspection report.
4. A Home Inspection Report Is Released
After the home inspection, you will receive a report that covers the property’s major features and notes any problematic issues that may need attention. It will consist of pictures and descriptions of any issues, as well as a summary that highlights areas of importance.
A good inspector will take the time to walk you through the report and its findings. This may include any damage or wear that they found in the home, no matter how minor.
It’s their job to make note of every flaw, so your report will likely have a lot of issues listed on it. This does not mean that everything is something that should cause concern – they’ll be able to help you discern what may be hazardous or a red flag.
5. Buyer Asks for Repairs Or a Discount
Depending on the results of the home inspection report, the home buyer has a few options. If there is significant damage reported in the home, you can request the seller to cover the cost of the repairs, also known as a contingency. Or, you can negotiate a discount on the purchase price.
A good rule of thumb is to only negotiate the cost of major repairs. If it can be described as normal wear and tear, the buyer will likely be responsible for it.
In the end, the home inspection will offer a layer of transparency for purchasing your home, and you can prepare to handle any necessary repairs accordingly.
Close on Escrow With New Venture Escrow
There’s a lot that goes into the closing process, with many moving parts and plenty of grey areas. New Venture Escrow aims to make closing as smooth as possible with high-quality escrow services for real estate agents, homeowners, and buyers.
Our VentureTrac 4.0 app makes it easy for you to track your progress and sign documents electronically to move the process along.
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