According to HouseMaster, a leading home inspection company with offices in over 390 cities across the United States and Canada, at least 40% of homes on the market have one or more major defects. Kathleen Kuhn, CEO and President of HouseMaster, notes, “Virtually every ‘used’ home needs some repair or improvement. That’s to be expected. But with today’s high prices, you want to be aware of any major problems in a house you’re considering purchasing and what it will take to fix them.”
Based on over one million home inspections, HouseMaster has identified the most serious home defects to watch for:
- Aluminum wiring
- Cracked heater exchange
- Chimney settling or separation
- Defective roofing and/or flashings
- Environmental hazards (radon, water contamination, asbestos, lead paint, underground storage tanks)
- Horizontal foundation cracks
- Insect infestations (termites or carpenter ants)
- Major house settlement
- Mixed plumbing
- Moisture in the basement
- Undersized electrical system
Kuhn emphasizes that while most of these defects can be repaired, the cost can be significant depending on the severity of the damage, particularly if major systems are involved. This is an important consideration when buying a house. For example, a new air conditioning compressor might cost around $1,200, while fixing damaged plumbing in a basement could cost about $5,000. When negotiating the purchase of a house, ensure there is a provision to back out if the home inspection reveals too many or too severe problems.
Eric Tyson and Ray Brown, authors of “Homebuying for Dummies,” explain, “If the property inspectors find that little or no corrective work is required, you have little or nothing to negotiate. However, if inspectors discover that the $200,000 house you want to buy needs $20,000 of corrective work for termite and dry-rot damage, foundation repairs, and a new roof, big repair bills can be deal killers.”
If you decide to proceed with the purchase despite needed repairs, consider these options:
- Ask the seller to allocate sufficient funds in escrow for repairs, with instructions to pay contractors once the work is completed.
- Have the lender withhold part or all of the loan amount in a passbook savings account until the work is finished.
- Request the sellers to provide a credit for the repairs, although lenders may disapprove as there’s no guarantee the repairs will be made.
Hire a qualified home inspector, whose fee typically ranges from $250 to $400. Look for inspectors affiliated with organizations like the American Society of Home Inspectors or the American Association of Home Inspectors, which require members to meet professional qualifications and adhere to business ethics. You can also ask for referrals from friends.
Make sure you are present during the home inspection. The time and money spent on this is a wise investment. During the inspection, ask about potential problems to expect and warning signs to look for. Learn how systems work and how to maintain them. “A pre-purchase inspection is your best protection against buying a home based more on emotions than as a sound investment,” says Kuhn of HouseMaster.
