Closing costs can be expensive. Even if you’ve been living in a small apartment waiting on the day when you close on your new suburban home, you still need to make sure you get things right when closing to save yourself any extra money you can.
While you can sometimes get a seller to pay for a lot of the closing costs, a home inspection is one of the first things you have to get done, it happens at the beginning of the sale process, and you have to pay for it.
Even though this can cost you $500 in early out-of-pocket expenses, it’s important to schedule a home inspection because of the following reasons:
1. You Can’t Properly Judge the Condition Yourself
Even if you are buying a newly constructed home, there could be deficiencies. Shoddy contractor work has been the subject of countless lawsuits, and a good home inspector can uncover errors. One prospective buyer saw nothing wrong with his home, but the home inspector found items like a shower pointing toward an unsealed wall, and the lack of proper slope on a roof. Even if it looks clean, neat and nice, there can be underlying difficulties.
2. Save Big Dollars
OK, the lights went on, the garbage disposal worked, and the AC was cool. What could be wrong with the wiring if everything works? The law firm of Carson and Dunlop tells us:
“Shortly after aluminum wiring became popular, some problems started to appear. These included flickering lights, warm cover plates on switches and receptacles, and burned insulation on wiring. There was an overheating issue, and overheating can mean fires.”
If an inspector uncovers aluminum wiring, the $500 for the inspection will undoubtedly be cheaper than the cost of rewiring your entire home after the purchase is complete.
If the inspector uncovers trouble, you may be able to work out a cheaper purchase price, especially if the problem is something you know how to fix or have a good repair person network. If the AC is about to go, you could possibly get a bigger discount on the purchase than the amount it might cost you to fix it.
4. Appraisal Issues
Interestingly, home inspections are not required by most lenders, but appraisals are. If you buy a home and do not get a home inspection, the appraiser may uncover a huge issue that reduces the home’s value. If the appraisal does not come in at or above the purchase price, the lender will most likely decline to finance the property.
5. Get the Seller to Fix It
If something major is wrong with the property and the inspector discovers it, you can at many times get the seller to pay for the repairs, especially if your purchase contract was properly written. Make sure your Realtor adds a solid contingency to your contract that makes the seller responsible for all imperfections that the inspector finds. If this is done correctly and the inspector finds a lot of problems, you can get out of the deal.
We realize that out-of-pocket expenses can quickly add up, and that it is difficult enough to save for your down payment. The last thing you want to do is put out more funds for repairs, but home inspections are one item that should be put at the top of your list.