Home Inspections

By John Aretos, CEO of Police Mortgage

A home inspection is critical for the whole process, whether it be for a police home loan or the purchase of practically any property. Home inspections matter regardless of how you plan to buy.

You can buy a house as is. You can have a home inspection but you’re waiving your right to be able to use any home inspection as a means of negotiating a reduction in price for repairs. In this situation, the buyer waives the right to have the seller be responsible for any of the repairs that have been identified in that report. The home inspection is still critical since it’s important to understand exactly the shape of the “as-is” property your considering. In other words, you need to know precisely what you are getting yourself into.

The other way that people buy homes, which is the traditional manner 99% of people do, is buying a home contingent upon a home inspection. This is written in the contract.

Home inspectors are a third party. They should be a completely unconnected party in the mortgage process, for sure. Realtors sometimes suggest home inspectors that they know. However, I always suggest to our clients to find an inspector totally independent of anyone else.

The one exception to that is your attorney. Your lawyer is going to be the best person to refer you to a home inspector. An attorney is already there to look out for your best interests and will suggest an inspector who will do the same.

I would avoid taking your realtor’s suggestion on a home inspector only because there’s a self-interest there. Most realtors are trustworthy but why take the chance.

Home inspections can cost anywhere from $300 to $500 usually. The quality of the inspection is going to obviously determine the findings. Those findings could be the difference between you buying that property or not.

Some look at home inspections as a $500 expense. I think of it as spending money now to save you from possible problems later. I would rather pay $500 than get ripped off on a house for $200,000 or more that wasn’t worth the price I paid.

Keep in mind that a home inspection is not an appraisal. An appraisal is what the lender needs to verify the collateral. That’s for the lender. The home inspection is for the customer, the person who’s buying the home. That is what the homeowner is going to use as the mechanism to check the structural integrity of the house.

A typical home inspection is going to make sure that weight-bearing walls are in place. That there’s a strong foundation with no cracks. That there’s no water seepage.

Professional home inspectors will check all of the utilities such as the furnace and the air conditioning. They’re going to check the well and the sump pump, if necessary. They are going to take a close look at the roof, especially if there are shingles. They’re going to inspect driveways, windows, outlets, electrical systems, and more. All these things factor into the home inspection.

When a home inspection is completed, the potential buyer is presented with a contract. Both parties sign the contract and then there is typically a five-business-day period for the attorney approval. That five-day period can always be extended if need be.

During that time frame, the buyer and their attorney receive a copy of the home inspection. Then they can talk about any repairs that are needed. It’s very common on a home inspection that there’s inevitably something that doesn’t materially affect the price of the home, but does need to be addressed.

A great example is a basement. Say it’s an unfinished basement, but you notice seepage from the basement wall. Then you have to get a U.S. waterproofing company to do the injection mold into it to fill the gaps. That can now be negotiated into the contract. That’s a very common example of something that is found by a home inspector that an appraiser probably isn’t going to look at.

Police Mortgage advises the first responders we work with to always get a home inspection. FHA loans require you to have an inspection. Conventional loans allow you to buy as is, but you’re going to want an inspection anyway.  We highly recommend with all mortgages for police that a home inspection is done whereby the buyer fully understands the complete integrity of the property.

Police Mortgage specializes in conventional mortgages, purchase money transactions, FHA loans, and VA loans. Led by founder and CEO John Aretos, Police Mortgage is known and respected for providing clients with exceptional service, customized terms, quick and easy closings, and low money down options. To learn more about Police Mortgage, go to www.policemortgage.com  or call 312-499-8878.

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