Q. Since I am getting an FHA loan, don't I already have a warranty on the
house from FHA?
A. FHA insures the lender against
default by the borrower. FHA does not guarantee the value or condition of the
property for the borrower. If you find problems with the property after loan closing, FHA
cannot give or lend you money to repair the house or buy the home back from you.
Q. Since I am buying this
house for a lot of money, can't I assume it is worth the price?
A. Buying a home is one of the largest
investments you will make in your life. Consequently, you must look out for yourself and
make sure the house is in good shape. A home inspection can provide assurance that you are
making a wise investment. If purchasing an existing house, don't expect it to be perfect.
Older homes offer a certain design and come with details many newer homes do not have.
However, they also may have some outdated equipment or older design characteristics and
therefore may be purchased at a lower cost than a newer home. Older homes may also come
with problems that are expensive to fix; the home inspector will identify those for you.
New homes also benefit from a home inspection because they may have been poorly
constructed to begin with or have suffered damage by fire, floor or termites.
Q. To get the loan, the
lender had to have the house appraised. Can't an appraisal be considered a home
inspection? Isn't the FHA appraiser supposed to look at the condition of the house too?
A. First, the lender selects an appraiser
that passes FHA requirements but the appraiser is not from FHA. The appraiser is a private
person and not a government employee. Second, an appraisal is an estimate of market value
of the property and is used to set the maximum amount the lender will lend on the
property. While the appraiser does look at the GENERAL condition of the house and is
supposed to list those items needing repair when the house is financed with an FHA insured
loan, the appraiser is not a home inspector. A home inspector is better trained and more
experienced in inspections and looks at more things in greater depth. As in anything else,
it pays to get an opinion from someone who has the proper credentials, training, and
experience.
Q. What exactly does a
home inspection provide?
A. A home inspection provides an impartial,
in-depth, evaluation of the physical condition of the property. The inspector also
identifies items that need replacement or repair. Good inspections included things like
cost estimates of repairs and the life expectancy of the equipment and components in the
house. For example, the report could tell you the roof currently looks OK and should last
another 3-5 years but it has three layers of shingles. So, the next time the roof is
re-shingled, it will have to be stripped of the other layers and that will cost more money
than if new shingles were laid on top of those already there. Thus, a well done inspection
will aid the buyer in planning and budgeting for future home repairs.
Q. How does the inspector
know how long something in the house will last?
A. A home inspector determines the remaining
economic life or useful life of major systems, equipment, structural and cosmetic items.
Because of the training and experience a good inspector has, he or she will know the
general length of time the various components and equipment of the house will last. For
example, the inspector knows that a water heater will generally last 10-12 years. The
inspector will look at the date labels on a water heater to estimate the remaining
expected life of the equipment. If not labeled, the inspector's experience helps him or
her estimate when a manufacturer sold specific types of units. An inexperienced homebuyer
generally would not have this type of information.
Q. Can I, the homebuyer,
inspect the house myself?
A. Obtaining the services of a qualified home
inspector is better than doing it yourself. A qualified home inspector is familiar with
home construction, the proper installation of construction materials and their
maintenance. A qualified home inspector has also performed hundreds of home inspections.
Inspectors know what to look for and have seen a range of situations. They investigate
areas of the house and its components that the average homebuyer would not think about.
Education, training, and experience are important.
Q. How do I know if
someone is a good home inspector?
A. Ask the inspector if they belong to a home
inspection organization. Qualified home inspectors must pass tests and meet minimum
qualifications to be accepted for membership. A few states license inspectors; if in such
a state, be sure to use only a licensed inspector.
Q. Are home inspections
worth the money? How much do they cost?
A. Home inspections are a good value. The
average cost ranges from $200-$500. The cost depends on how far the inspector has to
travel, how big the house is, the type of house, its age, the location of the property,
how many other inspectors are competing for the job, and many other factors. Call several
inspectors for their qualifications and get an estimate on the price.
Q. How do you find an
inspector?
A. Many real estate sales people will be able
to recommend inspectors. But remember, real estate sales people generally represent the
SELLER. Therefore, request 2,3, or 4 names of inspectors and call them all and decide
which one YOU want to use. You can also find qualified home inspection services by using
the Internet or the Yellow Pages under "Home Inspection Service" or
"Building Inspection Service". If you are located in a small town without any
inspectors, you might, as an alternative, be able to hire a local city or county building
code inspector on an after hours or weekend basis. While they may not have all the
credentials or be able to provide everything a home inspector does, these local building
code inspectors do have a full understanding of building trades and the problems which can
occur in construction.
Q. Does the government
help with the cost of inspections?
A. Paying for the inspection is your expense.
However, FHA believes inspections are a very good idea and therefore will allow up to $300
of the cost of the inspection to be used to satisfy FHA cash investment requirements when
buying the house using FHA mortgage insurance. Your lender can explain further about the
cash requirements necessary but basically it is the down payment requirement.
Q. Does FHA or the
lender REQUIRE that I get a home inspection?
A. No, a home inspection is NOT
required. But since a home purchase is the largest financial transaction of your life, are
you prepared to go into closing without one?
Q. Is a home inspection
a guarantee or warranty that there is nothing wrong with the house?
A. No, an inspection is just an inspection.
It is information about the conditions of the house as discovered by the inspector at the
time of the inspection. Remember that the inspector will not open walls or dig up sewer
lines. The inspector will generally specify in their contract what is and is not covered.
Don't expect an inspector to be responsible for replacing a furnace which malfunctions a
month after you buy the house if the inspector reported that it looked OK and should last
another 3 years. Inspectors report on current conditions and expected events or life
cycles of equipment and components. If, for some reason, the furnace does malfunction
before the normal time period, the inspector is not liable. Similarly, sometimes equipment
lasts much longer than expected and reported by the inspector. However, if the inspector
simply did a bad job and should have seen an obvious problem, you might have grounds for a
lawsuit. That, however is between you and the inspector you choose.
Summary:
Get a home inspection before you close on the
purchase of your house. It may save many thousands of dollars and a lot of worry. If
problems are found, you can negotiate with the seller about having the problems fixed,
having the price of the house reduced, or even decided not to buy the house. If no major
problems are found, you will better understand what repairs can be expected in the future.
Remember, it's your money, so protect your self with a home inspection.
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