This post is from staff writer April Dykman.

A house is the most expensive thing most of us ever will purchase. If you plan to stay put for some time, you could be paying on your mortgage for the next 15 to 20 years. But as any homeowner knows, expenses don’t stop at the purchase price and mortgage interest. You’ll also pay a small fortune in insurance, upkeep, and repairs over the years.

This is what makes it so important to fully understand the process of buying a home, especially when it comes to property inspection. With so many features and systems, there are any number of things that can break or malfunction in your house. Unlike a faulty appliance that you can take back to the store for replacement or refund, once you sign a contract on a home, there’s little recourse should something go wrong.

According to the National Association of Realtors, April through July typically outpace the balance of the year in home sales as people try to get settled before the new school year begins. If you plan to purchase a home soon, make sure you pay careful attention to the property inspection process to save both money and headaches.

The purpose of a property inspection
A property inspection report is a list of issues with the property, such as roof damage or a crack in the foundation. After inspection the buyer has the opportunity to negotiate with the seller and reach an agreement to either repair the property or to lower the sales price to compensate the buyer for the cost of the repairs. Alternatively, the seller can decide to sell the home as-is, in which case he or she is declining to make repairs or lower the sales price, and the buyer must decide whether or not to buy the home at the original agreed-upon sales price.

You may have decided that the property is your dream home, but the property inspection is a much-needed reality check that will point out flaws of which you might not be aware.

Important note

New houses still need an inspection!

You might think a new house is perfect, but that’s far from the truth. In fact, new homes can be even more dicey because they haven’t undergone a few inspections like the typical resale house.

When I was in real estate, I mentored with an incredibly knowledgeable agent who would try to talk her clients out of new homes (which often pay agents exponentially more because of builder bonuses). If they still wanted a new house, she would recommend additional inspections at various points in the construction process, and she’d show up for every single one.

During one inspection, she walked into the master bathroom. She noticed something was missing, and asked the builders to come in and see if they could figure it out. No one had a clue. Turns out they hadn’t put in plumbing for the toilet.

Review the seller’s disclosure notice
The first step in the property inspection process is to review the seller’s disclosure notice, a form filled out by the property owner that outlines their knowledge of the properties present condition. If you’re working with a real estate agent, he or she can get the disclosure statement from the seller’s agent. Otherwise, you can contact the seller’s agent, or if the property is for sale by owner, you’ll get the notice from the seller directly.

Sellers are required to include everything they know about their property. If, for example, the home was previously under contract, but the potential buyer walked away because a property inspection found major structural damage, the seller is required to include that in the seller’s disclosure notice.

As the buyer it’s particularly helpful because if the house will require major structural repairs, and you’d rather pass, you can walk away from the property without having to shell out cash for your own property inspection to reveal the same issues.

Hiring an inspector
If you carefully reviewed the sellers disclosure and you’re ready to move forward, the next step is to find an inspector.

Rather than firing up your Internet browser and doing a Google search, contact people in your network to get referrals. Who has purchased a house in the past several years? Do you know anybody in the real estate industry? If you have a buyer’s agent, he or she also should have at least three names of inspectors for you to consider.

After you’ve collected a small list of names, interview each candidate, asking questions including the following:

  • Are you licensed (not required in all states)?
  • Are you a member of a professional organization, such as the American Society of Home Inspectors?
  • Do you have errors and omission insurance?
  • What kind of ongoing training and education do you receive?
  • Do you specialize in certain types of properties? (For example, new homes and certain beachfront properties might need a specialist.)
  • What will the inspection cost?
  • If hired, how soon can you give me a property inspection report?

Finally, ask for a sample inspection report and see if it includes detailed descriptions of features and flaws in the home, which give more information about the property than a basic checklist.

It’s important that you make time to attend the inspection of the home. Besides learning more about your AC and where the fuse box is located, believe it or not, you might find issues that the inspector would normally miss. For example, an inspector won’t check underneath every rug in the house, but you can, and you might discover a major crack in the concrete floors.

Tip: Though the property inspection report will be invaluable after you purchase a home — it can serve as an agenda for which maintenance and repairs are highest priority — you can make it even more useful by filming the inspection. Don’t make yourself a nuisance, but tag along and film as the inspector goes from room to room. (You’ll probably want to let her crawl under the house on her own, though.)

Negotiations
Once the property report is finished, carefully read it. Many people don’t.

It can be disheartening to see so many things wrong with your “dream” home, but every home will have issues. Some are easy and inexpensive to fix, and it’s not reasonable to ask a seller to get a property in perfect condition. Typically buyers will ask that a seller take care of any health and safety concerns; structural damage; deferred maintenance, such as having the air-conditioning system serviced; or problems that require opening the wall, which often reveal much larger and more expensive problems.

Remember that should negotiations go downhill and you want to walk away from the property, the inspection contingency will allow you to do so.

If there are only minor issues with the house, however, typically buyers continue with the original contract. After the contract is finalized, it’s fairly certain the buyers are about to become the new owners.

As you can see, the process of a house inspection can have a major affect on a buyer’s finances for years to come. If you’re in the market for a new home, don’t gloss over the inspection report or assume that your agent will show up for you on inspection day and handle any issues. Stay involved in the process, even if you have to ask a million questions along the way. As J.D. often says, nobody cares more about your money than you do.

This article is about House and Home