What Is a Homebuyers Report and What Does It Cover?

A Homebuyers Report, often called a home inspection in the United States, evaluates a property’s condition. It helps buyers by providing an assessment of the home they intend to purchase. The report identifies significant defects or problems that might impact the property’s value, safety, or livability. This report helps buyers make informed decisions before finalizing a real estate transaction.

Understanding the Homebuyers Report

A Homebuyers Report, or home inspection, provides a detailed assessment of a residential property’s physical condition. This differs from a home appraisal, which determines a property’s market value for lending purposes, not its structural integrity. An inspection is for the buyer’s benefit, offering insights into potential issues.

The home inspection is a visual, non-invasive examination of accessible areas within and around the property. It is recommended for conventional properties in reasonable condition, not significantly older homes or those requiring extensive structural investigation. The inspection aims to uncover visible defects or concerns that could lead to costly repairs after purchase.

A home inspection covers major systems and components. This includes the exterior, foundation, structural elements, roof, gutters, attic, insulation, ventilation, electrical, plumbing, and heating and cooling (HVAC) systems. Inspectors also examine interior elements like walls, ceilings, floors, windows, doors, and built-in appliances.

Many reports use a condition rating system, often a “traffic light” system (e.g., green, amber, red, or numerical ratings like 1, 2, 3) to categorize the severity and urgency of identified issues. A green rating indicates no immediate concern, amber suggests defects requiring attention but not urgent, and red highlights serious defects needing immediate repair or further investigation. This system helps buyers quickly understand the implications of the findings.

Selecting a Qualified Surveyor

Choosing a qualified professional to conduct a home inspection is an important step in the home buying process. While licensing requirements vary by state, many states require inspectors to be licensed and certified. Some states may require a high school diploma or GED, general liability, and errors and omissions insurance.

It is advisable to seek inspectors who are members of professional associations like the American Society of Home Inspectors (ASHI) or the International Association of Certified Home Inspectors (InterNACHI). Membership indicates adherence to a code of ethics and standards of practice, along with ongoing training. These organizations offer directories to help locate qualified professionals.

When selecting a home inspector, ask about their experience, including the number of inspections completed and their familiarity with similar properties. Requesting a sample report provides insight into their thoroughness and reporting style. While real estate agents often provide referrals, conduct your own research to ensure objectivity.

The cost of a home inspection varies based on location, home size and age, and the inspector’s experience. Nationally, the average cost ranges from $300 to $500, though it can be as low as $200 or as high as $675 for larger or older properties. Additional fees may apply for specialized inspections, such as radon, mold, or termite testing, if recommended.

Receiving and Acting on the Report

Upon receiving the completed home inspection report, review its findings. The report details identified issues, often categorized by severity, along with photographs and descriptions. Discuss the report with your real estate agent, who can assist in distinguishing between minor cosmetic issues and significant structural or safety concerns.

Issues like structural damage, electrical problems, major plumbing defects, or HVAC system failures warrant immediate attention. The report may recommend further evaluation by specialists, such as a structural engineer or a licensed electrician, for complex issues. Obtaining estimates for necessary repairs is important for understanding financial implications.

The home inspection report findings can serve as a basis for negotiation with the seller. Buyers can request the seller address specific repairs, offer a price reduction, or provide credits towards closing costs. Sellers are not obligated to make repairs, but a home inspection contingency allows buyers to walk away if significant issues are found and negotiations are unsuccessful.

Prioritize repair requests, focusing on major safety concerns or defects that could impact the home’s value or habitability. Providing supporting documentation from the inspection report and contractor estimates can strengthen your negotiation position. The decision to proceed with the purchase, renegotiate, or withdraw rests with the buyer, informed by the report’s insights.