What’s a home inspection?

This is a report on the condition of the home as written by a qualified inspector. It usually takes a few hours to complete, and will cover the structure itself as well as each system within the home.

Without a certified inspection, you could be buying a glorified lemon. No matter how beautiful a home might look, extensive and potentially costly issues could be hiding.

Once you close on your home, any existing problems—such as water damage, mold, or a roof that needs serious repair—become your problem. It’s best to be made aware of issues before finalizing the sale so you can make an informed decision.

Your home inspector will thoroughly examine and test the following, though there may be other features of your home that should be checked.

• Heating and cooling systems, including thermostats
• Plumbing, including toilets, tubs, showers, sinks, septic systems, and water lines
• Exterior features, including foundation, driveway, roof, and chimney
• Electrical systems, including light fixtures, ceiling fans, outlets, and fuse box
• Visually check for signs of mold, mildew, or water damage
• Test existing appliances, including smoke and carbon monoxide detectors

If they discover any red flags or areas that could cause problems, it will be notated in the inspection report. As a buyer, you can then request the seller either make repairs or lower the cost of the home to account for the problems. Note that if repairs are needed, this can impact the closing timeline for the sale.

If a seller refuses to make repairs, or won’t drop the sales price enough to account for any issues found, you may have the option to withdraw your offer altogether.

What does a home inspection cost and who pays?

The average home inspection cost is between $300–$500 depending on the home’s size, age, and location. Some types of loans may also require additional inspections such as ones for termites, mold, or radon.

Buyers are usually expected to pay for the home inspection out of pocket. However, buyers can sometimes negotiate to have sellers cover the cost of the inspection.

What’s a home appraisal?

The second report you’ll need to have done is the home appraisal, as it is required by your lender. For this report, an unbiased and licensed appraiser will perform an independent and neutral assessment of the property to determine if its value supports the purchase price. Your lender will use the results to determine whether the home stands as adequate collateral for the loan.

An appraiser will take the following into account when calculating the value of a home:

• Square footage
• Number of bedrooms and bathrooms
• Location, including the ZIP code and neighborhood
• Views
• Lot size
• Condition

An appraisal is required by a lender before final loan approval. Lenders want to ensure the amount you’re asking to borrow makes sense.

How much does a home appraisal cost and who pays?

Buyers typically pay for appraisals, which cost between $200 and $600 on average, with larger homes costing up to $2,000. This fee is included in your closing costs and can either be paid at closing or upfront.

Having a certified inspection and appraisal are well worth the cost, as they are meant to help protect the buyer’s investment in a new home. Both reports help to ensure the home is exactly what’s expected and aim to avoid costly surprises after closing.

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