Are Home Inspections Required? - What You Need To Know

Dated: December 11 2020

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When you're buying a house is a home inspection really necessarily? Are they required? Is it even worth the money to have it done? What happens if I don't? All great questions. Let's talk home inspections!

What is the difference between an inspection and an appraisal?
I've had a number of buyers ask me if they still need a home inspection even when they are getting an appraisal done. So what's the difference between an appraisal and a home inspection? An appraisal is ordered by your lender and its basic function is to make sure that the lender is protected -that the asset that they are loaning on is not going to be less than the amount that they are giving you to purchase that home.

A home inspection is not required by any third party, it is usually built in as a contingency in your contract. Make sure that your agent is making that a priority if that is what you wish to have done. This is your opportunity as a buyer to determine the condition of the home! Is there any deferred maintenance? Are there any repairs that need to be done? Whether or not those items rise to the level of a further negotiation with the seller, keep in mind that if this is a contingency in your contract in which you'll have a deadline by which all of this needs to take place (Buyer Due Diligence Deadline).

Is it common to skip the inspection?
In the market that we have been in for the last several months, there have been buyers who have been waiving the inspection contingency when they get into a bidding war with multiple offers. This potentially makes their offer more appealing to the seller in some scenarios and is a conversation to have with your agent regarding the situation you are in. I am not a fan of waving that inspection contingency. Even if you don't ask the seller to make any repairs or do some other kind of concession, you really need to understand the condition of the home that you are buying and if there's going to be any additional out-of-pocket expenses.

Still not convinced of that inspection?
There is a really wide range of things that inspectors report, depending on background, training, and even software! The number of things that they have to consider during an inspection is really amazing, and it is truly such a fun topic for me to talk about cause I've got horror stories that I could go on for days about. Inspections turn up just the most incredible things. For example, the inspector is going to go down into the crawl space if there is one. In one of my transactions there was six inches of water in the crawl space and the seller didn't know anything of it. It had been a slow leak that grew immensely over time, and that did indeed kill the deal. 

Many people wonder if they need an inspection done on a newly constructed! That is up to you. But I will tell you that I have had home inspections done on new construction and there was a time where there was no insulation in the attic. I don't think they had done that on purpose, I think it just got overlooked. But that was a real issue! It was remedied and the transaction moved forward and everything was fine. An inspector is going to find everything from "the kitchen faucet is loose and maybe there's a small leak in the bathroom" to "hey, your house is sinking and that's an issue." Believe it or not that actually happened with one of our clients just a couple of months ago. The seller thought that it had been remedied, the inspectors went in and discovered that it was probably still moving. At that point in time, the buyer did decide to get a geo-tech inspection, but the house was moving and they were able to cancel that transaction within that deadline. The earnest money was protected and they moved on to a different property. 

Let's say you went and got that inspection. What next?
The inspector has gone in, they've put the home through its paces. They've checked out the furnace, they've checked out the attic, they've checked out the plumbing, you received this report and now what? Review it with your agent! See if there are any deal breaker items, like if there something that is just so horrifying you just don't even want to move forward. If that's the case, then you have the opportunity at that point to cancel the contract. Or, once you have negotiated those repairs and you're certain that the seller is going to take care of them, if that's the route that you take, it's fine to put them on an addendum because that's how you require the seller to make those repairs. There's not necessarily a right or wrong way to negotiate that, it depends on your situation on the transaction and what needs to be done. Once those repairs have been done, you do have the opportunity to do your final walkthrough, just to make sure that they are done according to the way that you have negotiated it in the contract. 

Pro Tip for Utah Residents!
Inspectors in Utah are not required to be licensed. You can be one thing one day and then the next day you can call yourself an inspector. So it's really important to do your research when you are hiring a home inspector, look at their website, look at their experience,  talk to your agent, talk to friends and family who have been through transactions and get some recommendations.

So the home inspection is really a very critical part of your due diligence as the buyer. And it is something that should be used as a really good tool in your buyers toolbox. Just always make sure that you're paying attention to that deadline cause once it has passed, you do not have the opportunity to negotiate those repairs any longer. 

Thank you for reading! Until next time.

-Jennie Hendricks

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Jennie Hendricks

I love Cedar City and the surrounding areas! I invite you to explore this fabulous community. You'll find beautiful outdoor recreation, fun boutiques and shopping, amazing restaurants, a winery and ....

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