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Who Pays for a Home Inspection: Buyer or Seller? | Dwellful

Jan 12, 2022 11:16:28 AM

You’ve found the home of your dreams. It’s within your budget, and you’ve successfully put together a winning offer. Now it’s time to pop the champagne, right? Well, not quite.

The home buying process leading up to closing is filled with additional information-gathering and due diligence, including one or more home inspections. After your offer has been accepted, your buyer’s agent will schedule a home inspection as one of the first items to be completed during the contract period.

Why do you need a home inspection, who pays for a home inspection (Spoiler Alert: It’s you, the buyer), and why?

Who Pays for a Home Inspection

Why Buyers Pay for Home Inspection

In the simplest terms, buyers pay for the home inspection because they are the ones who stand to benefit the most from the information they’ll glean from the process. A home inspection is designed to identify needed repairs, upgrades, updates, and maintenance issues before the purchase is finalized to ensure the home is in good condition. That allows the home buyer to take on the responsibilities of homeownership with more confidence and peace of mind.

In addition, the potential buyer has the option to choose their own home inspector to come in and check out the home structurally and mechanically. Think of it as kicking the tires on a car or checking under the hood. Your inspector will be able to flip switches, run faucets, and check a variety of items throughout the home before you buy.

This is a valuable service since all of the information you can gather about the house would otherwise come from public records or from the homeowners themselves. By bringing in your own objective expert, you get the chance to better evaluate the condition of the home and make an informed decision before you buy.

Why a Home Inspection Is Necessary

There are a variety of reasons to conduct a home inspection during the purchase contract or escrow period. These include the following:

To identify necessary repairs

Generally, the inspector will have a home inspection checklist and will be looking for items within the home that require repair or updating. They’ll check outlets and switches to make sure they are operational. They’ll check the burners on the stove, the condition of the hot water heater, and turn the HVAC system on as the weather permits. They’ll look for warped floorboards, run water to check for plumbing leaks, and identify other items that need to be addressed.

To identify additional inspections, if needed

Sometimes, an overall home inspection will point up problems that require further scrutiny. In this case, the inspector will generally recommend that you bring in a specialty inspector to further investigate any potential problems.Areas or features of the home that commonly undergo additional inspections, for example, include:

  • If you are buying a home with a pool and spa, you may want to bring in a specialist in those systems for additional inspection. 
  • If your home inspector identifies unusual cracks in the walls, they may recommend that you bring in a structural inspector to check out the home’s foundation. 
  • If your inspector sees some water damage in the attic, they may recommend a more detailed roof inspection that is beyond the scope of their visual inspection.
  • If your inspector notices indicators of poor maintenance or damage to the fireplace or chimney, they may suggest a chimney inspection.
  • If your inspector finds many trees and bushes surrounding the home, they may suggest a yard inspection to examine the landscaping for fire safety.
  • If your inspector sees water damage in the kitchen or bathroom, they may want to ensure all electrical systems and outlets are grounded and that wiring is up to code.

To create a post-purchase to-do list

In many cases, the inspector will identify repairs or maintenance issues that are coming up in the future. This can be a valuable way for you to begin learning about the upkeep of the home you are purchasing as you develop a homeowner budget for the next few years of ownership.

For example, while your HVAC system may be perfectly serviceable right now, the inspector will let you know approximately how old it is and what its expected lifespan would be. That allows you to plan ahead for any upcoming repairs or a full replacement in the future.

You may want to talk with your buyer’s agent at the same time about additional improvements you can make to the home. That will allow you to increase your home’s market value through smart upgrades at the same time that you are making repairs.

You can read more in our article on the basics of the home inspection process.

Can you attend the home inspection?

As a buyer, it is recommended that you attend the inspection. You should be there to ensure that a certified home inspector is properly scouting the house for potential issues. Having your real estate agent at the inspection is also helpful for this process. As a real estate professional, they have more experience on what to look for, and can offer advice on upgrades or address concerns you may have.

Cost of a Home Inspection

In most cases, a home inspection fee ranges from $300 to $500. There are add-on inspections that may increase this cost, including radon inspection, wood-destroying pest inspection, septic system inspection, and other specialty inspections. So, who pays for home inspection?

What Does the Seller Pay?

While you may find yourself paying a fair amount of money for inspections, appraisal, and other line items during the closing process, remember that the seller pays a significant amount of money to complete the transaction, as well. First and foremost, the seller pays the real estate agent commissions for both the buyer and seller. This usually amounts to 5-6% of the negotiated sale price of the home.

In addition, the seller pays all or a prorated portion of many taxes and fees, including those associated with title, transfer tax, escrow and closing, property taxes, HOA fees, and attorney fees, if required.

Can Inspections Reopen Negotiations?

If you have a home inspection contingency as part of the sales contract you and your buyer’s agent negotiated, inspections can reopen negotiations or even result in the termination of the transaction. For this reason, some sellers may choose to conduct a pre-listing inspection and identify necessary repairs before putting the home on the market.

Should a pre-listing inspection bring to light major problems with the home, the seller may choose to make repairs or improvements as needed. On the other hand, if they are working with a limited budget, they may choose to adjust the price of the home downward to offset the cost of repairs and disclose the pre-listing report upfront.

As a prospective buyer, you have a variety of options in responding to a negative inspection, including the following:

  • Accept the inspection as-is and proceed with the purchase. This option may occur under a variety of circumstances, including an As-Is sale, an information-only inspection, or in the event that you are already planning extensive renovations and are minimally concerned with the current condition of the property. 
  • Provide a list of repair requests to the seller and negotiate as needed. This often occurs during a buyer’s market where there is plenty of inventory available and sellers are eager to make a deal. If you choose to ask for repairs, be sure and indicate what constitutes an acceptable repair. For example, do you require a licensed contractor to sign off on all of the repairs or is a qualified handyman an acceptable option?
  • Ask for a seller contribution toward closing costs. This is often an acceptable option to both parties since it allows the transaction to move forward while ensuring that the buyers will be able to pay for repairs with the money they save at closing. In this case, instead of negotiating specific repairs, you’re negotiating a total amount of money to be applied toward repairs. 

Should your inspector identify insurmountable problems, and if you are unable to come to an agreement with the homeowner, a home inspection contingency offers you the option to walk away from the purchase without giving up your Earnest Money Deposit (EMD). Only you, in cooperation with your buyer’s agent, can decide what constitutes a deal-breaker and can help you determine when it’s time to end negotiations.

It is important to maintain your perspective throughout the home inspection process. Often buyers and sellers take on an adversarial relationship, fearing that the other party is trying to “get away with something.” This is rarely the case, so it’s vital that you choose to negotiate in good faith and look for a solution that works for both parties.

As you prepare to purchase your next home, you need the services of a trusted real estate professional. That’s where we come in. Whether you’re looking for a first time home buyer real estate agent or are simply looking to find a buyer’s agent in your favorite neighborhood, the Dwellful agent finder offers an unbiased resource designed to find the best agent match for your specific needs.

In addition, your real estate agent can help connect you with other resources, including a top-notch home inspector, specialty inspector, lender, or closing agent. That way you can feel confident throughout your entire home buying process.

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Christy Murdock

Written by Christy Murdock

Christy Murdock is a content writer, consultant, and coach who helps real estate and business professionals stand out as industry leaders through effective content marketing strategies. As a contributor and educator for leading real estate companies such as Inman and ReminderMedia, Christy is a trusted leader in real estate marketing. Through her company Writing Real Estate, Christy writes blogs, property descriptions, websites, and promotional copy that increases traffic and results in higher conversions for real estate agents, brokers and other professionals.

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