When an offer is made on a home, the Purchase Contract will likely contain provisions allowing the buyer various inspections of the property. Unlike most major purchases, once you buy a home, you can’t return it if something breaks or doesn’t quite work like it’s supposed to. That’s why home owner’s insurance and property inspections are so important. A home owner’s insurance policy protects a buyer in two ways:
  1. Against loss or damage to the property itself
  2. Liability in case someone sustains an injury while on your property
The purpose of these inspections is to educate the buyer as to the physical condition of the property they are purchasing. While these inspections do not provide guarantees of the condition of the property, they do provide valuable information to the buyer. The property inspection should expose the secret issues a home might hide so you know exactly what you’re getting into before you sign your closing papers. Your major concern is structural damage. Don’t sweat the small stuff. Things that are easily fixed can be overlooked. If you have a big problem show up in your inspection report, you should bring in a specialist. If the worst-ace scenario turns out to be true, it is important to remember that the Purchase Agreement may provide for a withdrawal from the contract if these reports are unsatisfactory, but inspections should not be considered an open door to renegotiate the purchase price.

The Physical Inspection clause in the Purchase Contract, when initialed by both parties, allows the buyer the right to have the property thoroughly inspected. This is usually done through a General Home Inspection. While home inspectors are not currently required to have a license, most are, or have been, General Contractors. The Inspection and the resulting report provides an overall assessment of the present condition of the property.

What is Inspected?
The Home Inspection covers items such as exterior siding, paint, flooring, appliances, water heater, furnace, electrical service, plumbing, and other visible features of the property. This is a “general inspection” and will often call for additional inspections by specific trades, such as roof and furnace inspections.

Further Inspections
If conditions warrant, the Home Inspector may recommend a Structural Engineer’s Report. Such a report would identify structural failures and detail recommended corrections.

Who Pays?
Typically, this inspection is paid for by the Buyer.

Often referred to as a “Termite Report,” the Structural Pest Control Inspection is conducted by a licensed inspector. In addition to actual termite damage, the Pest Report will indicate any type of wood destroying organisms that may be present, including Fungi (sometimes called “dry rot”), which generally results from excessive moisture.

Section 1 Conditions
Most Pest Reports classify conditions as Section 1 or Section 2 items. Section 1 conditions are those which are “active,” or currently causing damage to the property. Generally, Section I items need to be corrected before a lender will make a loan on a home.

Section 2 Conditions
Those which are not currently causing damage, but are likely to, if left unattended. A typical Section 2 item is a plumbing leak where the moisture has not yet caused fungus decay.

Who Pays?
The Purchase Contract will specify who is responsible for the cost of the inspection and making these corrections. This is a negotiable item and should be considered carefully. You will be advised as to what is customary and prudent.

The buyer may also elect to have a Geological Inspection to educate themselves as to the soil conditions at your home. This inspection is performed by a Geo-technical Engineer and involves not only physically inspecting the property, but also researching past geological activity in the area. The primary purpose of a Geological Inspection is to determine the stability of the ground under and around the home.

Who Pays?
Typically the Buyer pays, but as with other inspections, this is negotiable according to the contract.

Home Protection Plans are available for purchase by a Buyer or Seller. Such plans may provide additional protection of certain systems and appliances in the home.