It is recommended that you hire a professional to perform a home inspection on the house you are interested in purchasing. A home inspection is an objective examination of the physical structure and systems of a home. Make sure the professional you hire inspects all the major systems in the house, such as heating and cooling, plumbing, and electrical.

If problems are identified, it doesn't necessarily mean you shouldn't buy the house. However, you should be aware of potential repairs. A seller may adjust the purchase price or contract terms if major problems are found. Or, you may decide not to purchase the home.

If you decide not to proceed, you may forfeit certain up-front costs, such as your mortgage loan application fee and credit report fees that you may have already paid the lender.

Home Inspections Are Not Appraisals

A property appraisal is a document that provides an estimate of a property’s market value. Lenders require appraisals on properties prior to loan approval to ensure that the mortgage loan amount is not more than the value of the property. Appraisals are for lenders; home inspections are for buyers.

Hire an inspector you can count on

As the homebuyer, it is your responsibility to carefully select a qualified inspector and pay for the inspection.

If you don't already have a particular inspector in mind, ask someone you trust for a reference. The inspection will cost several hundred dollars (actual cost depends on the size of the property and complexity of the report), so it's important that you feel confident about the person conducting it and the quality of his/her work. In fact, your agent is a good resource for home inspection references, as he/she has undoubtedly worked with a number of quality inspectors.

The following other sources may help you find a qualified home inspector:

• State regulatory authorities. Some states require licensing of home inspectors.
• Professional organizations. Professional organizations may require home inspectors to pass tests and meet minimum qualifications before becoming a member.
• Phone book yellow pages. Look under “Building Inspection Service” or “Home Inspection Service.”
• The Internet. Search for “Building Inspection Service” or “Home Inspection Service.”

Radon Gas Testing

The U.S. Environmental Protection Agency and the Surgeon General of the United States have recommended that all houses should be tested for radon. For more information on radon testing, call the National Radon Information Line at 1-800-SOS-Radon or 1-800-767-7236. As with a home inspection, if you decide to test for radon, you may do so before signing your contract, or you may do so after signing the contract as long as your contract states the sale of the home depends on your satisfaction with the results of the radon test.

The Bottom Line: Spending Hundreds May Save Thousands

When you make a written offer on a home, you should insist that the contract state that the offer is contingent on a home inspection conducted by a qualified inspector. You will have to pay for the inspection yourself, but it could keep you from buying a house that will cost you far more in repairs down the road. If you are satisfied with the results of the inspection, then your offer can proceed.