Is Inspection Part of Closing Costs?

Buying a home involves various financial considerations beyond the agreed-upon purchase price. Understanding the full scope of these expenses is an important step for prospective homeowners. One common question that arises during this process centers on whether home inspection fees are included within the broader category of closing costs.

Defining Closing Costs

Closing costs represent an array of fees and expenses paid at the conclusion of a real estate transaction. These charges are distinct from the down payment and typically range from 2% to 5% of the total loan amount, though they can sometimes reach 6% or more. They encompass charges from various parties involved in the sale, such as lenders, title companies, and attorneys.

The specific breakdown of these costs is itemized on a standardized document known as the Closing Disclosure. This document provides final details about the mortgage loan, including loan terms, projected monthly payments, and all associated fees. Lenders are required to provide this document at least three business days before the scheduled closing, allowing buyers time to review and compare it with their initial Loan Estimate.

The Role of Home Inspections

A home inspection serves as a professional evaluation of a property’s current condition. A licensed inspector conducts this assessment to identify significant defects, safety concerns, or potential issues with the home’s primary systems and structural components. This includes examining heating, ventilation, and air conditioning (HVAC) systems, plumbing, electrical wiring, the roof, and the foundation. The inspection is a crucial due diligence step for the buyer before finalizing the purchase. It typically occurs after a purchase offer has been accepted but prior to the official closing of the transaction.

Home Inspection Fees and Closing Costs

The fee for a general home inspection is typically not included in the closing costs that appear on the Closing Disclosure. Buyers usually pay the home inspector directly at the time the service is rendered. This payment often happens upfront or on the day the inspection takes place. The average cost for a standard home inspection in the United States ranges from approximately $200 to $600, with an average around $340 to $350, depending on the home’s size, age, and location.

Other Property-Related Fees at Closing

While the general home inspection fee is typically paid outside of closing, other property-related assessment fees can be part of the closing costs and are listed on the Closing Disclosure. An appraisal fee is a common example, as it is a lender-required assessment of the home’s market value. This fee, which typically ranges from $300 to $600, is usually paid at closing or sometimes upfront, and it is distinct from a home inspection.

Additionally, certain specific inspections might be required by a lender or local regulations and can be included in closing costs. Examples include pest (termite) inspections, well inspections, septic system inspections, or lead-based paint inspections. These types of inspections are often ordered by the lender or title company and will appear as itemized charges on the Closing Disclosure. For instance, a septic inspection can cost between $300 and $600, while a pest inspection might range from $50 to $280.