One of the most important milestones a person can have in their life is purchasing their very first home. It’s a worthwhile investment, and it’s also one that’ll continue to appreciate in time. That said, many homeowners who are only starting are sure to have their worries.
“Is a home inspection required?” is a question most first-time home buyers ask. The answer may vary depending on your situation and locality. Regardless, having real estate inspections is a definite must.
The gist of it is: the last thing you want is to purchase a home riddled with issues. This is where the inspections come in handy. Some of the inspections are required by city, state, bank, or insurance providers.
Make sure you cover your bases and know what to expect. Find out more on the types of real-estate insurance there are in our handy guide.
Purchasing a home through bank financing is sure to require a real estate inspection. Most of the time, this is for the appraisal needed by your provider. One thing to note, though, is that each bank will have its own real estate inspection checklist.
This is why it’s essential to discuss this with them first, as every bank may differ. The bank will want to make sure the property is worth the amount of the loan and that there aren’t any major problems.
For larger properties, an environmental site inspection is a requirement. This will check for hazards like asbestos, lead, or mold. Among real estate inspections, this is one of the most common.
City inspections are always done by the municipality where your property is currently located. There are two types of common certificates that passing a city inspection will give you. These are a Certificate of Occupancy or a Certificate of Habitability.
Not all municipalities require a certification of occupancy. Those that do tend to be for when a new home gets built or a major renovation happens. People who try to sell their investment property may find they need a certificate of occupancy before they can.
A certificate of habitability is more focused on municipal health and safety codes. These will involve a real estate inspection checklist. It will look for signs of asbestos and foundational integrity, as well as others.
Every time the inhabitants change, such as when you re-rent a property, you may need another inspection. A fire inspection is another thing the city could require. This is especially every time occupancy changes.
Here they’ll look at smoke and carbon monoxide detectors, and where they’re placed.
One thing you have to keep in mind is the specific requirements of your state. Quite a few different states need properties to get inspected on a regular basis. This tends to be every few years or so, and this varies based on the type or occupancy level.
A good example is the state of New Jersey. They stipulate that any properties with three or more units require a state inspection every five years. In the same state, single and two-family properties don’t need this inspection.
When undergoing a state inspection the inspector is trying to make sure the building is safe. It has to pass the state’s particular health and safety codes. Often these will tend to overlap with the city but might also be more stringent.
The inspector will also assess the habitability of the property for its intended purpose – living, commercial, or work.
This is one of the most important types of inspections in real estate. These happen when the insurance company needs to be sure of the risk your property may pose. Your insurance premiums and costs could vary wildly depending on what the inspection finds.
Typical insurance inspections are external, where they do an exterior walk-through. The other option is when insurance companies do an internal inspection. In either case, the inspection wants to make sure risk is low and that you aren’t fudging the paperwork.
Many people try to claim a business as residential property to avoid paying business insurance, for example. When insurance inspections go deep, they usually go for a 4 point inspection.
You might find yourself asking: what is a 4 point inspection, and why is it necessary? A 4 point inspection is when insurance companies need to check the major risk factors of your home to make sure it’s safe. These are electrical, plumbing, roof and structure, and your HVAC system.
Any of these categories could have serious issues that increase insurance risk. In most cases, there’s little room for mitigating circumstances. For this reason, you’ll want everything in perfect shape before the insurance inspection.
Construction inspections need to get done when major work is underway. Building a new house or doing major renovations means everything has to be up to code. State or city officials usually order these, and they get broken up into four major categories.
These are building, plumbing, electrical, and fire inspections. Building inspections look at structural issues, like load-bearing walls or foundational work. Plumbing is about your pipes and gets divided into rough and finished plumbing.
Rough plumbing includes things like any new water lines you’re running. Finished refers to things like your kitchen sink. Electrical inspections will look at your house wiring.
The last one is fire inspections. These will check for proper fireproofing of your walls and ceilings. These are similar to when insurance companies do a 4-point inspection.
The difference is these get called by the city/state instead.
General Third-Party Inspections
Buying a home without an inspection can be risky. A general third-party inspection is often requested for the client’s peace of mind. As its name suggests, it can be as specific as checking for pests to going over a home’s general state.
It is within every buyer’s right to have a safe and sound home. Often, this type of inspection can serve as a “second opinion” or supplementary to a more primary one. It’s conducted by certified and regulated home inspectors.
Though they rarely specialize in an area, they have a more comprehensive background. Given this information, they may tend to leave out or miss certain issues. This is why it’s advisable to have them as an additional option to a previous inspection.
The Different Types of Real Estate Inspections
When it comes to real estate inspections there are several different types. Some are a requirement of local authorities, while others are for the bank or insurance. In most cases, real estate inspections focus on issues of habitability and security.
When buying, selling, renting, or renovating a home, inspections are important. It’s good to know what they entail and what to expect. For more info on this and other topics, take a look at our site.