Home inspections are a crucial step in the home-buying process. They give buyers a valuable tool in assessing a property before committing to the purchase, but they aren’t cheap.
“The purpose of a home inspection is to inform a buyer with detailed information regarding the quality of a particular home and its property,” says Christa Kenin, a real estate agent at Douglas Elliman.
This article examines the average cost of a home inspection and suggests ways to lower that price tag while still taking advantage of this powerful tool.
What Is a Home Inspection?
After your offer on a home is accepted, you—as the potential buyer—have the right to inspect the property within a given period. In a home inspection, a third-party inspector visits the property and assesses the condition of several major home systems, pointing out signs of aging, damage, and wear and tear.
A standard home inspection looks at all the inner workings that keep a home functioning. Home inspections generally run from $500 to $900 and above across the country, according to Andrew Pasquella, a realtor at Sotheby’s International Realty.
“Home inspections can be a vital tool in a home-buying process,” says agent Michael Weiner of Coldwell Banker Warburg. “By identifying any issues with the property, a buyer can know some of the upcoming costs of owning the home and perhaps have leverage to negotiate repairs or at least the purchase price to account for these problems. More importantly, if there are major deficiencies, it may save a home buyer from acquiring a home that needs a major investment or is too fundamentally flawed to be worth acquiring.”
“The primary purpose is to identify major infrastructure and systems issues that require a specific level and range of expertise. It is these areas that cause the biggest and most expensive problems,” says agent Lorraine Baker of Coldwell Banker Warburg.
These inspections are detailed and comprehensive and can take several hours to complete. “All major systems in the home are evaluated, such as the plumbing, heating and cooling, electrical, and plumbing systems, as well as exterior elements such as the roof, siding, windows, deck, and foundation," says Kenin. “The home inspector also evaluates the major appliances such as the refrigerator, oven, and dishwasher to ensure they are working properly."
Inspectors comb every foot of the home, looking for signs of mold, pests, and water damage and pointing out potentially expensive and complicated problems.
“Additionally, home inspections are important for health and safety reasons,” Kenin adds. “For example, an inspection reveals any moisture or flooding that could result in the presence of mold in a home. An inspection can also reveal the presence of hazardous materials, such as asbestos or radon gas in the basement.”
At the end of the process, an inspector hands the buyer a detailed report, often upward of 100 pages, with photos detailing their findings.
A Powerful Tool for Negotiation
“There are two main factors that impact how a home inspection might be used. The first one is to determine how competitively the home is priced in acknowledging the notable deficiencies and required work beyond the more superficial aspects of the home,” Baker says. “The second factor depends on the magnitude of the newly identified costs and also the time needed to correct or update such issues.”
“A home inspection is used during the negotiation process so that a buyer can secure some sort of concession from the seller for a home’s non-quality or defective items,” Kenin says. “This occurs after the potential buyer and seller have agreed to a purchase price but have not yet signed a contract.“
Once an inspection is complete, the buyer reviews the report to see which items and concerns could affect their decision on the purchase. If they want to proceed with buying the home but are concerned about a mold or pest problem, for example, they can negotiate the price of services for those problems with the seller.
“The buyer may ask for credits to fix non-working items like an oven that is not functioning properly or to address deferred maintenance items like a crumbling chimney or driveway,” Kenin says. “These requested credits become part of the final negotiation of the purchase price before contracts are signed and money is put into an escrow account.”
Sellers might instead opt to replace systems in the home that are nearing the end of their life cycle, such as a septic tank or roof. “A deal I recently worked on had an older septic system from 1962 that needed replacing, and it cost $36,000 to replace the entire system,” Kenin says.
Forgoing Inspections
Home inspections aren’t required for all home purchases. You might wonder if you need one. “Upfront, it is important to say that foregoing an inspection means assuming some degree of risk, depending on the age, size, and price of the property, as well as other external factors,” Baker says.
However, some market conditions and special factors could lead to a buyer skipping an inspection. “Buyers might forego an inspection, for example, if there are multiple bidders on a property, to make their offer more attractive. Alternatively, if buyers are purchasing in a large city apartment building and already live in the building, they may feel comfortable enough to proceed without an inspection,” Baker says.
Baker cautions against foregoing an inspection because a home you’re looking to purchase is relatively new. “Buying in a new development is not reason enough to forego an inspection.”
Factors Affecting Home Inspection Cost
Several factors are at play when it comes to the cost of a home inspection, beginning with where you live.
“There are many variables that drive this. High-cost areas have higher costs, and larger properties take longer to inspect than smaller ones,” Weiner says. Older properties can also drive the cost higher, as recently built properties may need to be checked against current housing codes, while older ones may not be up to a variety of regulations.”
“There are also add-on services that can drive the cost up, including testing for asbestos, radon, mold, or pests,” Weiner adds.
Inspections can cost more depending on certain features in your home. For example, if your home has a well or septic tank, these often require separate inspections by qualified experts. The same applies to homes with fireplaces or wood-burning stoves and outdated electrical systems.
“Only a few such companies handle this type of work because it necessitates very specialized knowledge,” Baker says of fireplaces. “Many buyers consider this feature in a home to be quite desirable. So, it is important to know if the fireplace is operable and properly maintained.”
Kenin points out that homes with mold problems often require additional inspections as do homes with pools. Homes with radon systems and pest problems also often require additional inspection procedures.
Saving Money on Your Inspection
Many agents advise against skipping inspections or trying to save a buck. “It is never a good idea to try to save money with a ‘streamlined’ inspection. After a title search, an inspection is the single most important step a buyer can take to protect themselves when purchasing a home,” says Kenin.
Sellers often have the upper hand when it comes to home inspections. “In a seller’s market, buyers are often forced to limit their home inspections to cover only health and safety issues to remain competitive as bidders. This means that if a home inspection revealed that a roof or deck was crumbling or an appliance or home system did not work, the buyer would be willing to overlook those faulty items and would still proceed with the sale without any price adjustment,” Kenin explains.
“There are many ways to keep the costs of home inspections in line without sacrificing quality, though a quality inspection is usually well worth paying for,” says Weiner.
He suggests comparing quotes for a handful of inspection companies and asking the homeowner to pay for a portion of the cost.
You can also start with a basic inspection and go from there. “If a homeowner or buyer is looking to lower the costs associated with inspections, I would recommend starting at a general home inspection at a minimum and then see what comes from that. If the general inspection finds further trouble spots, then it will be up to the homeowner or buyer to expand their discovery,” Pasquella says.
