Chances are when you need a home inspector, you’re totally unfamiliar with who is good and who is not good in the area where you’re buying your home. That was our situation.
Not too long ago, we were in contract to buy a large 100+ year old home. We were in need of an excellent home inspector. Because the home was old, we wanted the best home inspector in the area so we could get fully informed about the house we were buying. We particularly wanted to know about all the problems so we could ask the seller to repair them or at least we’d move forward understanding what we were getting into.
At the end of the day, we ended up hiring an amazing home inspector. He wasn’t the cheapest, which was fine with us. He was insanely thorough, took the time to explain pretty much everything to us, answered all our questions and provided an incredibly in-depth and well written report.
Your choice of home inspector can have a huge impact on your home purchase. Many people have bought homes without inspection or a DIY inspection only to end up with a money pit on their hands in a year or two. This is what you want to avoid. This is what we wanted to avoid.
While I’m not a home inspector, I believe my experience going through the process can offer some good insights to anyone who is in need of a home inspector.
Here are the steps we took to hire what turned out to be an excellent hire.
7 Steps to Take When Hiring a Home Inspector
Step 1: Act Fast
Frankly, I’m surprised at how short the typical inspection period is in home buying situations. I think we had ten days, but had it extended because we needed to consult several specialist trades to conduct additional inspections.
Those ten days or whatever amount of inspection time you have go quickly. Start the hiring process immediately and get the inspection booked before the expiration of the inspection period. Don’t wait. This is your chance to ensure you’re buying a good home and if there are problems, you can negotiate a price drop or that sellers will do the repairs.
One thing to consider is to push for a price reduction and you do the repairs. You will have a much stronger interest in the repairs being done right and so you have control over who does the repairs.
Step 2: Google isn’t always right
I, like many people, rely on Google searches to find all kinds of local services. However, Google doesn’t know who is actually the best home inspector. Google puts listings on its first page based on totally different criteria unrelated to quality of service. Google ranks sites based on their own algorithm which pertains to how the site is structured, the website’s content and the links to the site. This means a terrible home inspector who is very good at setting up their site according to Google’s search criteria can easily outrank home inspectors who are actually much better.
One way Google has attempted to mitigate this obvious problem is via the Google business reviews. These reviews do impact how Google ranks a business listing, but this is also not without problems. As you can imagine, some businesses can manufacture positive reviews and so basing your decision on this is also not without risk.
Here’s a screenshot of a listing of inspectors Google business pages and corresponding reviews:
Step 3: Ask your real estate agent for a recommendation
I realize there is a potential conflict of interest between a real estate agent and their inspector recommendation because it’s possible there are referral fees and/or quid pro quo deals such as the inspector recommending the agent in return. Most States home inspection ethics require that a home inspector disclose any conflict with all parties involved in the transaction. Therefore, I suggest you point-blank ask the inspector whether there is any quid pro quo deal involved or referral fees.
There’s also the potential issue that some agents don’t want a thorough inspection because if too many problems are identified with the property, the deal may not go through.
That said, I believe most real estate agents are in it for the long haul and will be genuine in their recommendations; it’s the very few bad apples you need to be concerned about. While your realtor may be super nice and helpful, you simply never know.
However, we trusted our agent and asked her for names of the very best home inspectors in the area. She provided 2 names. We checked them out and hired one of them. We had absolutely no regrets. Our agent did indeed recommend an outstanding home inspector.
Step 4: Ask other people you know in the area who they used
It’s always good to find out who other people used and whether they were happy with them. Check them out too.
Step 5: Check out the Home Inspectors’ websites
This is where I spent a decent amount of time when looking for our home inspector. I didn’t much care for how pretty the website was or whether it was at the top of Google. Instead, I looked for the following:
a. Diffuses fear of conflicts
The home page of our inspector’s website point-blanks stated that he does not receive any compensation from anyone except his clients. I like that.
I prefer a home inspector who is a member of various home inspection associations. Our inspector was chapter president for some time with ASHI which indicates he’s active in the industry.
c. Verify Experience
All the training in the world can’t overcome lack of experience. I think the best home inspectors are those that start later in life after having worked in construction or in some trade for many years and so they come to the home inspection vocation with plenty of hands-on experience.
Our home inspector had 45 years of experience in construction. He started as a carpenter, then became a home builder and then became a home inspector. He knew everything about home construction and that’s not because he passed some exam, but because he had devoted his life to home construction.
d. Use of Technology: Don’t be fooled
Read the website to learn about inspection technology they use. One item they may hype is infrared thermal imaging cameras which has been presented as being able to detect all kinds of problems. While it has its use, that use is very limited.
Read this interesting PDF as well as this article about the use of infrared thermal imaging cameras in the home inspection industry. I’m not saying it’s all bad; what I’m saying is don’t presume a home inspector is great because they use this technology (or other technology).
If a home inspector claims to use certain inspection technologies, research that technology to ensure that it’s effective or whether it’s just hype.
At the end of the day, it’s knowledge, due diligence and experience that will result in a thorough inspection.
e. Check out sample inspection reports
Scour the inspector’s website for sample reports. If they aren’t available, ask for a sample. If they don’t provide a sample, that’s not a good sign. I mean seriously, why wouldn’t they provide a sample?
f. Overall impression
This sounds quirky, but our inspector mentioned on his website that he’s read every issue of some construction publication since it first started. I don’t know that publication and have no idea whether it’s good, but it signalled to me that this guy is truly devoted to the home inspection trade/vocation and takes it serious. It was a nice touch to mention that.. a bit of personal mixed with the professional.
Step 6: Call for Availability
Unfortunately, this part of hiring an inspector is beyond your control. It may just be that he or she is not available within the inspection period set out in your purchase to buy contract. That said, if you’re dead-set on someone who can’t fit you in, find out when they are available and ask the sellers if they’ll extend the inspection timeline. They might.
Step 7: Hire
If all of the above checks out, hire your inspector. This is done by booking the inspection appointment. It’s important you attend the inspection. We did. I didn’t want to because it took up much of the day, but I learned far more on the walk-through with the inspector than I would have gleaned from the report alone.
Additional Home Inspection Process Tips
In addition to the steps outlined above, here are some tips based on our experience.
1. Attend the inspection
It’s likely your inspector will go through the home on their own and then you attend after that’s done for the walk-through. Depending on the size of the home, expect the walk through to last 1 to 2 hours. Take the time to ask questions.
Take a notepad with you because a good inspector will reel off a lot of information quickly and without writing it down you won’t remember it all.
2. Ask about maintenance of the home as well as current problems
A concern we also had was what maintenance issues we were facing. Actually, our inspector told us a great deal of information about how to properly maintain certain features of the home.
3. Hire specialists for secondary inspections
Our inspector knew his limits and for several aspects of the home, he suggested we hire specialists to inspect further. This is a mark of a confident person, one who knows their limits and will say so. We took this to heart and hired every specialist he suggested. For each specialist required, he gave us 2 names.
What do I mean by specialist?
One example was to get a plumbing company to snake a camera through the sewage line to ensure it wasn’t blocked.
5. Get rid of your emotional blinders on… remain objective
If you’ve gone so far as to get an inspection done, chances are you’re very excited about the home. Perhaps it was beautifully staged or it just happened to be in the perfect location making it your dream home.
Detach your emotions. Don’t overlook any inspection problems or minimize them in your mind. Yes, you can’t be too greedy about what to ask the seller to pay for (this is a balancing act on its own), but at the same time don’t ignore the problems just because you “really want the house.”
6. Read the report carefully
Once you get the report, there may be items in there not discussed in the field. If you have questions, ask the inspector for clarification.
What we did is go through the report and our notes from the inspection and put together a list of the bigger ticket items we wanted the seller to pay for and items of concern we’d handle. We then discussed our list of repairs with our agent.
7. Discuss repair requests of seller with your real estate agent
After the inspection, you can ask the seller to get repairs done or reduce the price to pay for repairs.
However, you don’t want to be too greedy. The seller can say no and the deal could fall through. We discussed the matter with our real estate agent and ultimately decided to ask the sellers to pay for the bigger ticket items and ignore the smaller stuff that wouldn’t cost too much. Not to second guess our agent, but I also asked a family member who is a real estate broker and property investor about how much we should ask the sellers to pay for. He confirmed our agent’s advice to ask for only the bigger ticket items and not to nickel and dime it.
8. Don’t base hiring on price
The cost of hiring our chosen home inspector wasn’t a consideration for us. It shouldn’t be for you. Our inspector cost more than others, but it was only by a couple of hundred dollars, which was money very well spent. He earned every dollar due to the amount of time he spent at the property, with us and level of detail he put into the report.
9. Get the inspection even if it’s a brand new home
Seriously, there are some bad home builders out there who take shortcuts, use shoddy materials, have no idea what they’re doing, etc.
In fact, a badly built new house may have a shorter lifespan of a well built heritage home.
Read this astonishing article about an inspector who compiled photos and details about problems he’s spotted when inspecting new homes. It’s truly astonishing.
Home Inspection Checklists
I do not recommend you go find some home inspection checklist online with the intention of doing the inspection yourself unless you are very knowledgeable about home construction.
Yes, there are many checklists available. However, most are fairly superficial. I checked them out. They simply do not provide sufficient space to input information.
If you really want to get your own checklist, go to the source that home inspectors use. Check out sample home inspection reports provided by the most popular home inspection software. They are:
- Home Inspector Pro: This is what our inspector uses. Home Inspection Pro offers sample reports here.
- HomeGauge: I checked out their sample reports which also seemed thorough. Check out their sample reports here.
If you have the time, you can convert those sample reports into your own extremely thorough checklist.
What if it’s a bidding war and you don’t have time for an inspection?
Real estate bubbles create situations where sellers will not grant time for inspection. It’s buy as-is. You can hardly blame the sellers. Home inspections are not to their benefit. If the environment is such that buyers will forego an inspection, so be it. There aren’t laws requiring home inspections.
This is a horrendous situation for buyers, but sometimes unavoidable. If you, as buyer, insist on an inspection, you’ll likely lose out to other buyers willing to finalize the deal immediately without inspection.
There’s not much you can do in this situation. On the one hand you can wait for the market to change so it’s a buyers’ market. Unfortunately, this can take years. Or, you bite the bullet, buy without inspection, and hope for the best.
If it is a real estate bubble situation, you may want to wait before buying and instead rent in the meantime. If home prices are out of control, it can often make more financial sense to rent biding your time until it becomes a buyers’ market again.
How can you tell if it’s better to rent?
There’s one formula that’s often used to help decide whether you should buy or rent. It’s called the price-to-rent ratio. It’s calculated as follows (the simple version):
Price-to-rent (PR) formula: List price of home / Monthly rent x 12
- If PR is less than 15: Buy
- If PR is 16 to 20: Rent
- If PR is 21+: Renting is a great deal
Source: The wonderful real estate and investing blog GreaterFool.ca… a must-read for anyone interested in buying a home and/or investing.
We’re currently living in a bubble area. We’re renting (our home purchase didn’t go through… it was in another country outside of our bubble market). Our current price-to-rent is 37 and so we’d be nuts to buy in this market based on the PR formula.
$500 to $1,000 Inspection Could Save You Thousands
That’s the point, isn’t it? Invest $500 to $1,000 in a quality home inspection to potentially save you thousands or tens of thousands in repairs down the road.
What if the home inspection reveals no problems? While this is probably rare as there are always some items that can be fixed, it may well be the inspection reveals nothing serious. Do not regret paying for the inspection. It’s an investment in the home-buying process.
Even if you have to pay for multiple inspections if previous deals fell through, it’s a worthy investment… even for new homes.
In fact, new homes can be badly built and it’s good to know that up-front.