What are the key points to explain inspections to first-time buyers?

Buying a home for the first time can be both exciting and overwhelming. You may have found your dream property, but before you sign the contract, you need to make sure it's in good condition and worth the price. That's why inspections are a crucial part of the home buying process. They can reveal hidden issues, help you negotiate repairs or credits, and protect you from costly surprises. In this article, we'll explain the key points to understand inspections as a first-time buyer, and how to handle them smoothly and confidently.

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1 Why inspections matter

Inspections are professional evaluations of a home's structure, systems, and features. They are usually conducted by licensed inspectors who follow a set of standards and checklists. Inspections are not mandatory, but they are highly recommended, especially for older or distressed properties. They can help you identify any defects, damages, or hazards that may affect the home's safety, functionality, or value. They can also give you an estimate of the repair costs and maintenance needs. By getting an inspection, you can avoid buying a lemon, or at least know what you're getting into.

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Mark Bradford

I Make Home Ownership Affordable--Lending all Across America
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A home inspection is well worth the money you spend on it. It can keep you from making a huge mistake. Just like anything else, make sure the inspector you use is a good one. Ask others you know for a referral for one. The one the real estate agent suggests may not be a great inspector. Check them out before using them.

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2 How to choose an inspector

You have the right to choose your own inspector, and you should do so carefully. Not all inspectors are created equal, and you want someone who is qualified, experienced, and trustworthy. You can ask your agent, lender, or friends for referrals, or do your own research online. Look for inspectors who have credentials from reputable organizations, such as the American Society of Home Inspectors (ASHI) or the International Association of Certified Home Inspectors (InterNACHI). Check their reviews, ratings, and samples of their reports. Contact them and ask about their availability, fees, and scope of services.

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3 What to expect from an inspection

An inspection typically takes 2 to 4 hours, depending on the size and condition of the home. You should attend the inspection, or at least join at the end, so you can see the findings firsthand and ask questions. The inspector will examine the home's exterior and interior, including the roof, foundation, walls, doors, windows, plumbing, electrical, heating, cooling, appliances, and more. They will look for any signs of damage, wear, malfunction, or code violation. They will not test for environmental issues, such as mold, radon, asbestos, or lead, unless you request and pay for additional services. After the inspection, the inspector will provide you with a detailed report, usually within 24 hours, that summarizes their observations and recommendations.

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4 How to deal with inspection issues

If the inspection reveals any problems with the home, don't panic. It's rare to find a perfect home, and most issues are fixable or negotiable. You have three main options to handle inspection issues: accept them as they are, ask the seller to make repairs or offer credits, or walk away from the deal. The best option depends on the severity and nature of the issues, as well as your budget, timeline, and market conditions. Your agent can advise you on how to proceed and communicate with the seller's agent. You may need to submit a repair request or an addendum to the contract that specifies your terms and contingencies.

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Mark Bradford

I Make Home Ownership Affordable--Lending all Across America
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The inspection should be very in depth about conditions that exist with the home. Once you see the report, you may think there are so many things wrong their is no way you should continue to purchase the home. Most of the things are normal things most homes that age have. Look for the ones that could be a major expense to correct if if there is something in there that you just cannot live with. Many times you can get the seller to contribute to some closing costs now, in lieu of doing some of those basic repairs. It is a great way to get the seller to contribute to the buyers costs where they were not willing to before.

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5 How to prepare for an appraisal

An appraisal is another type of evaluation that you may encounter during the home buying process. Unlike an inspection, which focuses on the home's condition, an appraisal focuses on the home's value. An appraisal is usually required by your lender to verify that the home is worth the amount they are lending you. An appraisal is conducted by a licensed appraiser who compares the home to similar properties that have recently sold in the area. The appraiser will also consider the home's size, features, upgrades, and market trends. The appraiser will provide you and your lender with an appraisal report that states their opinion of the home's fair market value.

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6 How to handle a low appraisal

A low appraisal is when the appraiser's value is lower than the agreed-upon sale price. This can be a problem for you and the seller, because it means that your lender may not approve your loan or may offer you less money. A low appraisal can happen for various reasons, such as a lack of comparable sales, a volatile market, or a biased or inexperienced appraiser. If you face a low appraisal, you have a few options to overcome it: challenge it with additional evidence or a second opinion, renegotiate the price with the seller, make up the difference with more cash, or look for another lender or loan program.

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Mark Bradford

I Make Home Ownership Affordable--Lending all Across America
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The appraiser and lender are two different entities. The lender most likely had nothing to do with the appraiser who is doing the appraiser. They are separated from each other by design. The lender may be able to assist you in this case but in no way can they try and influence the appraiser. They can present evidence or the argument the buyer/seller want to provide to the appraise but that is about it.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What are the key points to explain inspections to first-time buyers?

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1 Why inspections matter

2 How to choose an inspector

3 What to expect from an inspection

4 How to deal with inspection issues

5 How to prepare for an appraisal

6 How to handle a low appraisal

7 Here’s what else to consider

Working with First-Time Home Buyers

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