A home inspection provides home buyers with critical information that can help them to avoid significant financial loss. There are many repair and maintenance issues in a structure that may not be visible to the naked or untrained eye, and this includes plumbing, electrical, structural, roofing and other issues. Even a home that appears beautifully designed and well-maintained on the exterior can have substantial issues that tally into the tens of thousands of dollars or more. While it may be clear that you need to order a home inspection, you may not be certain about is a home inspection included in closing costs and how it is paid.
What Is Included in Your Closing Costs?
In most residential real estate purchase transactions, closing costs include lender fees, title company fees, property taxes, insurance, the appraisal and other third party reports that have not already been paid. The title company will collect invoices that are due from the transaction and will record them on the closing statement. You typically will receive a copy of the preliminary closing statement several days before closing so that you can prepare to pay the funds or initiate a wire from your bank. When you ask is a home inspection included in closing costs, it should be noted that a home inspection is not usually paid for through closing costs.
How a Home Inspection is Typically Paid
A home inspection is an optional report in the home buying process. It is not required by your lender or through the sales contract. The home buyer can choose to purchase this report to learn more about the true condition of a property before the sale is finalized. While not required, it provides critical information for a home buyer. Some home buyers decide that they do not want to buy a specific home because of its bad current state. Others may negotiate with the seller to have some repairs completed before closing, and still others learn that the home they want to buy is in excellent condition. A home inspection typically is paid for at the time services are rendered. This means that you will need to bring a check or cash in the amount of the inspection fee to provide to the inspector on-site at the home.
When to Order a Home Inspection
Because of how critical the information in a home inspection can be, it is important that you maximize the benefit of this report as much as possible. In your sales contract, you typically have a contingency period at the beginning of the process. During this period, you may opt to back out of the contract without losing your earnest money, or you may renegotiate your offer. It is best to order a home inspection as soon as possible during this contingency period. Doing so allows ample time for the inspector to complete the report and for negotiations to be completed, if necessary.
While a home inspection is not a required part of the home buying process, it nonetheless is a critical component to making a smart buying decision. If you have recently gone under contract to buy a home, now is the time to order your inspection.
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