Home Inspections…Don't Skimp On Them!

When you are buying a home, the first thing you do, after your offer is accepted, is to do a home inspection.  Depending on the age of the home, maybe even more than one.  Why?  Inspections uncover big-ticket items that will be your problems, soon after you close on the home.  Depending on what needs to be fixed, as a buyer, you can negotiate a lower price, or a seller credit for closing costs, to reduce your cash due at closing.

I am working on a transaction now where the borrower skipped the inspection all together to save the money.  I did not know about this, until the following series of events took place.  The home is a $70,000 home in Greeley, and at that price point,  it was bound to have some challenges.  The appraisal came back with a list of 30+ things that needed to be fixed/replaced.  This home was in the worst condition of any home I have ever seen in 11 years.  The Realtor, who I don’t know, also happened to be really new at the business.  So now it has turned into a nightmare scenario where the FHA appraisal is logged in the HUD system, so anyone who wants to buy that home for the next 4 months, has to use this appraisal.  The seller is trying to fix everything, but pretty much, everyone is frustrated.  I asked the borrower if he did an inspection, because I found it odd that an inspector would not have raised these 30 red flags.

An experienced Realtor would not have put a contract on that home, and a home inspection would have cost the borrower $200, and uncovered all these major problems.  By skipping the inspection, the borrower saved $200, but spent $500 on an appraisal — an appraisal that told him the same thing that the inspection could have told him – essentially STOP moving forward with this home.

Please make sure you hire an experienced Realtor, and never skip an home inspection!