A home inspection is an examination of the home’s structure and mechanical systems. It’s typically performed during the escrow period of a real estate transaction so that buyers can gather information about the condition of the property. This information can help them decide if they want to complete the transaction or cancel the contract.
Many real estate professionals advise homebuyers to purchase a home inspection to protect their money and investment. While a home inspection can reveal many pitfalls associated with buying a particular piece of property, it also has limitations buyers should be aware of.
Note: SoFi does not offer home inspections at this time. However, SoFi does offer conventional mortgage loan options.
What Is a Home Inspection?
A home inspection is a visual assessment of a property’s condition, including the major mechanical, structural, and visual elements of a home. This includes things like the electrical, plumbing, foundation, walls, ceiling, heating and cooling systems, leaks, mold, and structural elements.
Getting a home inspection is one way that borrowers can protect their money when taking on a home mortgage loan. Because home inspection reports can reveal potentially expensive problems with a home, homebuyers may be able to renegotiate the contract, ask home sellers to fix problems, or withdraw from the contract entirely.
First-time homebuyers can
prequalify for a SoFi mortgage loan,
with as little as 3% down.
What Does a Home Inspection Include?
If you’ve been looking at properties, you probably already know some basics of what to look for when buying a house. But a home inspection delves more deeply than you could in your initial examination. It includes information about the home’s condition, including mechanical systems such as the HVAC, roof, electrical, plumbing, walls, ceiling, floor, windows, doors, foundation, and other structural components.
It’s important to note that inspectors have some limitations. If the electricity isn’t on, they can’t do an inspection of it. There are other systems that are not usually included in a standard home inspection, such as an inspection of a well or septic system.
💡 Quick Tip: A major home purchase may mean a jumbo loan, but it doesn’t have to mean a jumbo down payment. Apply for a jumbo mortgage with SoFi, and you could put as little as 10% down.
When Should You Get a Home Inspection?
Whether you’re a first-time homebuyer or have bought multiple properties, if you’re in a real estate transaction, you should get a home inspection when you want to feel more comfortable with your purchase. You’ll want to make an appointment with the home inspector as soon as your contract is signed. (A seller might also want to get an inspection before putting a home on the market, so that any big issues can be fixed before they hurt the home appraisal value.)
Home Inspection Checklist
Not quite sure what is checked on a home inspection? It’s helpful to know what the home inspection may include in a home inspection checklist.
Grounds
• Is there proper grading and drainage away from the home or is standing water visible?
• Are the walkways, yard, trees, and landscaping in good condition? Do branches or trees hang over the house?
• Is there evidence of termite or water damage on exterior structures?
• Are the railings secure and stable?
Structure
• Are the sides of the house straight, without sagging or bowing?
• Do windows and door frames appear square?
• Do the roof ridge and fascia (the lower beam supporting the gutters) appear straight?
• Is the foundation straight with no major cracks?
Exterior surfaces
• Is the siding or stucco in good condition?
• Do masonry veneers have cracks or flakes?
• Is there any wood in contact with the ground?
• Is the paint peeling or chipping?
• Are there any vines covering the exterior surfaces of the home?
• Are there stains on exterior surfaces?
Windows, door, and trim
• Are door frames cracked or rotting?
• Are windows in working order with no breaks?
• Are the joints of windows and doors caulked?
Roof
• Are shingles cracked, rotting, missing, or curling? Are there more than two layers?
• Are there obvious patches, cracks, splits, or wrinkling on a flat roof?
• Are the flashing and soffit in good shape?
• Is there exterior venting for eave areas?
• Are the gutters in good shape?
• Are the chimneys straight, properly flashed, with no evidence of cracked joints?
Attic
• Are there stains on the underside of the roof?
• Is there damage or rot to the structure?
• Is there sufficient insulation and ventilation?
• Is there plumbing, exhaust or plumbing terminating in the attic?
• Are there open electrical splices?
Interior rooms
• Do floors, walls, and ceilings seem plumb and level?
• Are there stains or cracks in the walls or ceiling?
• Are the paint or wall covering, flooring, and trim in good condition?
• Do the lights and switches operate correctly?
• Are there enough electrical outlets? Do they work properly?
• Is there heating and cooling in each room?
• Is there cracked or broken masonry around the fireplace? Is there evidence of backdrafting? Does the damper operate properly?
Kitchen
• Is there a working exhaust fan venting to the outside?
• Are there GFCI outlets within 6 feet of the sink?
• Does the dishwasher operate and drain properly?
• Are there leaks in the pipes under the sink?
• Does the floor under the sink have evidence of water?
• Is the water flow adequate?
• Are the cabinets in good condition?
• Do built-in appliances operate properly?
Bathrooms
• Is there a working exhaust fan that doesn’t terminate in the attic?
• Is there adequate pressure and flow at all fixtures?
• Is the toilet stable and working properly?
• Are metal elements free of rust?
• Is the caulking on the tub, toilet, and shower in good condition?
• Are there stains or evidence of past leaking?
Basement or mechanical room
• Is there evidence of moisture?
• Are there stains or cracks on exposed foundation?
• Is there visible sagging, stains, or damage from insects in exposed wood elements?
• Is there insulation at rim/band joists?
Crawl space
• Is the crawl space adequately vented to the exterior?
• Is there insulation on exposed water supply, waste, and vent lines?
• Is there insulation between the crawl space and the heated areas of the home?
• Is there evidence of moisture or pest damage?
Plumbing
• Is there evidence of leaking or cracked pipes?
• Are there signs of rust on the water heater? Is it vented properly? Is it the correct size to produce enough water for the home?
• Does the water pump short cycle?
• Do the galvanized pipes restrict water flow?
• Is the well water test acceptable?
• Is the hot water temperature between 118 and 125 degrees Fahrenheit?
Electrical
• Are there exposed splices? Knob and tube wiring?
• Does the service panel have adequate capacity?
• Is there aluminum cable for branch circuits?
Heating and cooling systems
• Is there good air flow from all vents?
• Are there open seams in the flues?
• Is there rust around the cooling unit?
• Is there a combustion gas odor?
• Is the air filter clean?
• Is the ductwork in good condition?
• Is there asbestos on the components?
• Are there separate flues for oil/gas/propane and wood/coal?
Miscellaneous
• Are smoke and carbon monoxide detectors in place?
• Are stair risers and treads in good shape?
• Are stair handrails in good condition?
• Does the garage door opener work properly?
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What Are Problems That May Fail a Home Inspection?
The most common problem areas that cause a home inspection to fail (meaning, the buyer pulls out of the transaction because of the severity of the issues) include:
• Faulty roof or foundation
• Pests
• Low water pressure
• Failing windows
• Electrical issues
• Drainage issues
• Failing heating system
• Wood rot
• Leaks
• Mold
• Building code violations
• Toxic building materials (like asbestos or lead-based paint)
What Happens if a House Fails Inspection?
If there’s an issue that’s too big to ignore, you have options.
1. Ask the seller to make repairs. Sellers may be able to make the necessary repairs to get the property up to par.
2. Ask for a credit from the seller at closing. If you’d rather have money to fix the problem yourself, you can negotiate for a credit from the seller.
3. Resubmit a counteroffer with a lower price. You can submit an addendum to the contract that lowers the purchase price to reflect the condition of the property and remediation cost.
4. Abandon ship. If the problems are too big and it doesn’t make financial sense to buy the property, you may just want to walk away.
5. Buy it anyway. In a competitive real estate market, you may need to decide if the problems found during the inspection are worth bringing up. Sellers often have multiple offers or can sell the property “as is,” meaning, the property may be able to sell even with the problems found. This is dependent on the lender, of course, because lenders may not fund your mortgage if the problems found are severe. (Lenders find out this information in the home appraisal, not the home inspection. The home inspection is for you.)
What Are Home Inspectors Not Allowed to Do?
Home inspectors have some limits. The inspection may not include a close look at:
• Outbuildings or fences
• Pests
• Mold
• Sprinkler systems
• Wells
• Septic systems
• Ducting
• Vegetation and drainage
• Swimming pools
Additionally, home inspectors may not climb on the roof, advise on the cost of repairs, or advise on the purchase of the property.
How Much Does a Home Inspection Cost?
According to the U.S. Department of Housing and Urban Development, the typical home inspection costs between $300 and $500. This will vary, of course, depending on the size of the home, region, age of the home, and other optional services you may want to opt for.
How to Find a Reputable Home Inspector
A good home inspector is invaluable and they’re not all created equal. If you want someone that will take a good look at your home, take these steps:
• Ask for recommendations from family and friends. If someone you know had a great experience with a home inspector, get their number.
• Ask your real estate agent for ideas. They’re in the business and likely have a good idea of which home inspectors are thorough and knowledgeable when it comes to a home inspection.
• Read reviews. There are many sites that offer to connect service professionals with homeowners, and they usually have reviews of past work that you can see.
Pros and Cons of a Home Inspection
When it comes to a home inspection, there are a few pros and cons you’ll want to consider.
Pros
• A trained professional can find issues you cannot. Even if you’re experienced in home construction, a professional has the advantage when it comes to thousands of potential issues the home could have.
• It helps protect your money. A home inspection can help you determine if purchasing a certain property is right for you or not and can help you ensure that the home is fairly priced.
• The report can be used as a negotiation tool. A home inspection that reveals an issue can be used to negotiate repairs, price reduction, or money to repair the issue.
Cons
• It’s possible to miss major issues. Getting a home inspection doesn’t guarantee that there’s nothing wrong with the home you’re buying. The inspector can’t open up walls. And if the home doesn’t have all of its systems operational, the home inspector cannot inspect them.
• You may need additional inspectors for specialized systems. If the property you’re buying has a well or a septic system, for example, you’ll likely need an additional inspection from someone qualified to inspect those systems.
💡 Quick Tip: If you refinance your mortgage and shorten your loan term, you could save a substantial amount in interest over the lifetime of the loan.
Do the Homebuyers Have to Be There?
Home inspectors generally do not require potential purchasers to be present when they complete the home inspection. However, it can be very helpful if the buyers make time to be there. The inspector can point out issues, address the severity of them, or make recommendations that are hard to express in a report.
How Long Does a Home Inspection Take?
On the day of the home inspection, how long a home inspection takes depends on the size of the home. Generally, the home inspection takes between two and four hours. After the inspection is complete, the report is usually sent within 24 to 48 hours.
Home Inspection Tips
After you receive your home inspection, you may see some unexpected things. These tips can help.
• Don’t panic. Every house has something wrong with it. Most things are fixable and you just need to find out what it costs to fix.
• Get estimates. The home inspection is usually just a starting point. You’ll need to find professionals to determine how much it will cost to fix.
• Negotiate for fixes. Your real estate agent can ask the seller to fix items found in the home inspection. The estimates you get can come in handy.
• Make a decision by the deadline. In your contract, you’ll likely have a date that you need to cancel to ensure you don’t lose your deposit. If something in the home inspection is upsetting enough for you to cancel the contract, you need to do it by the deadline.
The Takeaway
Home inspections are recommended because they can help buyers make an informed decision when it comes to purchasing property. When there’s a sizable amount of money at stake, it’s usually worth it to pay a few hundred dollars to uncover potential problems.
However, sometimes even a home inspection doesn’t catch everything wrong with a property. Keep in mind that once your home inspection is finished, you may need to hire a specialist to get to the root of the problem identified by the home inspector. With better information in your hands, you can be prepared to commit your money to a mortgage.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
What things are big red flags in a home inspection?
Some big red flags to look for in a home inspection are potential issues related to the safety and strength of its construction and systems, such as foundation issues, electrical hazards, drainage issues, and leaks.
What is the importance of an inspection?
A home inspection can reveal potential problems or defects in a property. It can help buyers make better decisions and help protect their money.
What does an inspection agreement typically include?
If you see a home inspection agreement, it may include the scope of work, exclusions, date and fee for the inspection, extras that can be performed for a fee, dispute resolution process, limitations of liability, and statement of no guarantee or warranty of the inspection.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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