Home Inspections for Investors General Info for Investors
What are the Requirements to be a Home Inspector?
Requirements vary by state, but in our state of Indiana for example, in order to become a Home Inspector Licensed by the State of Indiana’s Professional Licensing Agency, you must:
- Complete an Indiana Professional Licensing Agency approved pre-licensing training course with exam
- Complete 12 hours of practical in-field training with an approved instructor
- Pass the Indiana state exam
Licensed Home Inspectors must also meet certain requirements for adequate insurance coverage and must maintain their license with CE courses specified by the state’s professional licensing agency.
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What’s a Home Inspector’s True Job?
A home inspector’s true job is simply to report their findings.
A Home Inspector’s primary job is to report the findings of their inspection and not to recommend to a buyer whether or not to purchase the property. Their job is also to use his or her judgment and knowledge from personal experience to give an educated opinion regarding whether the mechanisms, systems and structures are working as they should and do not contain any defects that could negatively affect property value or endanger future residents.
Home Inspectors are not required to inspect any areas that are not visible to them, such as electrical wiring and plumbing that is located inside sealed walls.
Permits and Code Enforcement are not part of the Home Inspection. Building codes vary greatly in different cities even in the same state.
Home buyers or investors should check at the county recorder’s office at the court house. They should have all the permits for the home recorded there. Also, remember to check if all taxes are paid and if there are any liens on the property so you have all the information before you make an offer or get to closing.
Again, a Home Inspector’s main job is to report the findings and let the client make a decision on whether or not to purchase the property. A Home Inspector should not advise a client as to whether or not to purchase a property.
What is a Pre-Inspection and When Would this be Useful?
This term can be used in a few different ways:
A pre-inspection in the general sense is an inspection by a licensed home inspector before the purchase of a property.
However, sometimes this term is used to refer to an inspection that a seller has done before listing a property. This helps the homeowner or investor identify any problems before a potential buyer’s inspector views the property. This reduces surprises or items that could be used in negotiations with a buyer to lower the sale price.
This term can also refer to an inspection scheduled by potential buyers before an offer is submitted. In a competitive housing market, making an offer that is not subject to an inspection contingency may help the offer stand out above the competition.
Options offered by home inspection companies may differ.
Some home inspection companies offer different options such as a lower cost walk-through verbal inspection without a report. However, these options may not be offered by all companies. There are pros and cons to not requesting a full inspection with a written report.
Investors looking at multiple properties for purchase might find a walk-through inspection a more affordable option, but without a written report this type of inspection can be problematic at times. It is less helpful with negotiations to purchase the property and can also cause problems if the buyer misunderstood or remembered the inspector’s comments incorrectly.
What is the Best Time to Schedule a Home Inspection?
Here are some good times to schedule a home inspection:
- When it’s pouring rain.
- Before the drywall goes up in new construction or renovations.
What happens if the utilities are not on during an inspection?
It’s best to schedule the inspection when all of the utilities are turned on so that your inspector can test appliances, outlets, plumbing, and everything else that requires utilities to be properly tested in the home.
What is a Re-Inspection and When Would this be Useful?
Re-inspections can be useful for both buyers and sellers.
Re-inspections are valuable so that you know that any problems that were found in the initial inspection have been properly remedied before you purchase the property as a buyer. They are also beneficial when selling a property so that the seller is in a better position to negotiate with buyers. As a house flipper, you will want to be sure there are no problems with the quality of your renovations or last minute surprises so that you can get top dollar. This will help you avoid a situation where you have to lower the price if a buyer’s inspector finds a significant problem.
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Continue to Home Inspections General Info Part 2.