Purchasing a home is one of the most significant investments many people make and getting a home inspection is an important step in the process to give you peace of mind. Understanding who pays for home inspections and repairs is crucial to navigating the process effectively. Here is a detailed breakdown of home inspections, their associated costs, and how to approach repair negotiations.

Types of Home Inspections

1. Standard Home Inspections

A home inspection for a condo typically focuses on the unit itself and does not include common areas, as those are maintained by the condo association. Here's what a home inspection usually covers in a condo:

Interior Components:

• Walls, Ceilings, and Floors: Inspecting for cracks, water damage, or structural issues.
• Doors and Windows: Checking functionality, seals, and for any signs of leaks or drafts.
• Electrical System: Testing outlets, switches, circuit breakers, and ensuring electrical safety.
• Plumbing System: Inspecting sinks, faucets, drains, and any visible pipes for leaks or damage.
• HVAC Systems: Evaluating heating and cooling systems, including maintenance and functionality.
• Appliances: Testing built-in appliances like the stove, dishwasher, microwave, and refrigerator.
• Smoke and Carbon Monoxide Detectors: Ensuring proper installation and operation.
• Insulation and Ventilation: Assessing attic spaces or other accessible areas for insulation and airflow issues.

What is not covered in a condo inspection:

• Common Areas: Roof, exterior walls, hallways, elevators, and shared HVAC or plumbing systems.
• Building Structure: Responsibility typically falls under the condo association and may not be part of the inspection.

2. Specialized Inspections

For properties with unique concerns or older homes, specialized inspections provide deeper insights. These may include:

• Pest inspections: Identifying termite or rodent infestations. Usually not inspected in a condo.
• Mold testing: This is only performed if there is a concern or the home inspector notices something that looks suspicious.
• Radon inspection: Measuring potentially dangerous radon gas levels. Radon is an inert gas that you can’t see or smell, but it can be deadly. It is heavier than air so it tends to collect in basements that don’t get any airflow.
• Lead Based Paint testing: Lead based paint was banned in 1978, so only homes older than that will have it. Even then, it is typically not tested for. It is presumed to be present and as long as it is sealed and it is not chipping, it is not a problem.

Who Pays for a Home Inspection?

Buyer-Initiated Inspections

When buyers arrange for a home inspection before purchasing, they are typically responsible for covering the inspection fees. This cost is an essential part of the due diligence process to protect their investment. The cost will depend on the size of the condo and the age. A typical home inspection for a condo will run between $300-$700.

Seller-Initiated Inspections

Sellers may opt for pre-listing inspections to identify and address issues before going to market. In this case, the seller covers the inspection fee, which can help attract buyers by showcasing the home's condition.

Is a Home Inspection Necessary?

While not mandatory, a home inspection is highly recommended. Even if the inspector doesn’t find any defects, it is highly educational. The inspector will cover some maintenance tips and important shut-off information. Including an inspection contingency in your offer allows you to:

• Negotiate repairs or credits: Based on inspection findings, buyers can request the seller to fix issues or provide a price reduction.
• Walk away from the deal: If the home's condition is worse than anticipated, contingencies provide a legal way to back out.

Example Scenario:

If a home inspection uncovers $5,000 in repairs, buyers may negotiate with the seller to either:

• Lower the sale price by the full repair cost.
• Offer a partial credit toward repairs at closing.

Who Pays for Repairs After a Home Inspection?

The responsibility for repair costs depends on several factors:

1. State Laws

Virginia is known as a ‘Caveat Emptor’ (latin for Buyer Beware) state. Sellers are not required to make any disclosures and it is up to the buyer to discover any defects.

2. Negotiation Strategies

Effective negotiation is often the deciding factor. Real estate agents play a critical role in securing favorable outcomes for their clients. How much you can negotiate depends on how competitive the transaction is.

3. Market Conditions

• Seller's Market: Buyers may waive inspection contingencies to make their offers more competitive, but this puts them at risk for future repair costs. In hot seller's markets like 2020-2022, many buyers felt pressured to waive inspection contingencies to compete, leading to some discovering costly issues after closing. This risky practice has decreased as the market has balanced out, with more buyers now insisting on thorough inspections. Experienced agents generally advise against waiving inspection contingencies regardless of market conditions.
• Buyer’s Market: Buyers typically hold more negotiating power, increasing the likelihood that sellers will cover repairs. This shift in negotiating dynamics often leads to more thorough inspection processes and detailed repair requests. In these conditions, sellers are more likely to agree to comprehensive repair lists or offer substantial credits to close the deal. However, even in a buyer's market, it's important to prioritize significant issues and maintain reasonable expectations during negotiations.

Final Thoughts

Understanding the nuances of home inspections and repair negotiations is essential for both buyers and sellers. Whether you’re inspecting for peace of mind or strategizing during negotiations, being well-informed ensures a smoother transaction process. Always consult with a qualified real estate agent to make the most of your inspection results and negotiate effectively.