Buying a House: Why You Need an Inspection (Even if Your Lender Doesn't)

It's normal when buying a house to wake up in the middle of the night worrying. Am I being ripped off with too high a price? Are the foundations crumbling? Is the roof about to cave in? Is there a termite infestation? Is the wiring safe?

A hundred such worries can disturb the sleep of a home buyer. But almost all of them can easily be put to rest by two expert professionals: an appraiser and a home inspector.

Chances are your mortgage lender is going to insist you employ both. But suppose you're paying cash or your lender requires only an appraisal. Should you still go ahead and spend hundreds of dollars ($300-$500 is typical) on a home inspection? Most Realtors and other housing experts would recommend you do -- and not just for the sake of your sleep patterns. Here's why.

What a Home Inspection Buys You

The appraiser's only role is to assess the market value of the home. True, she should reduce the value if she happens to spot a major defect, but she doesn't go looking for them, and may not be trained to recognize them.

Home inspectors, on the other hand, usually are trained. Indeed, in 39 states (check yours) it's illegal to operate as one without a license. According to the National Association of Home Inspectors' website:

"A professional home inspector should, at a minimum, inspect the following items:

  • Exterior Home Site
  • Building Foundation
  • Exterior Home Walls
  • Roof Coverings, Flashings & Gutters
  • Roof Support Structure
  • Attic
  • Basement
  • Insulation Quality
  • Garage
  • Electrical
  • Visible Interior and Exterior Plumbing
  • Central Air and Heating System
  • Interior Condition of the Home"

Even if your state insists on certification, it's a good idea to ask around for personal recommendations because standards are bound to vary. Whomever you pick, raise on first meeting these 10 Important Questions to Ask Your Home Inspector, recommended by the U.S. Department of Housing and Urban Development.

Getting a Better Price

A home inspection can pay for itself -- sometimes many times over -- before you even move in. That's because it can help you negotiate down the price you pay for the house.

Any issues that show up in your inspector's report provide you with leverage during the bargaining process. You may pay less or the seller may agree to fix the problems before closing.

Saving Money in the Longer Term

It can be perfectly sensible to go ahead and purchase a home with expensive defects -- providing you do so with your eyes open. There's nothing wrong with buying a house that's going to cost you mega-bucks to do up, providing the price is cheap enough, and you have a plan and budget in place for the necessary repairs. Some people -- "flippers" -- make a living based on that model -- and you can similarly increase the value of your main asset, even if you plan to live in it for decades.

But buying a home not realizing it has hidden defects is the opposite of that. Some less careful home buyers lose money year after year as they try to get their house into the condition they assumed it was in when they first viewed it.

Enjoying Peace of Mind

Buying a house is a stressful enough experience without living with nagging doubts over the soundness of the building. Home inspections may not be cheap, but what price do you put on your peace of mind?

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