Quick answer
A home inspection is an evaluation of a home’s physical condition, especially its structure and mechanical systems, by an inspector you hire before closing. Unlike the appraisal, which the lender orders to confirm value, the inspection is for your protection, and the CFPB recommends getting one.
Using the report
If your contract has an inspection contingency, you can cancel without penalty when the results aren’t satisfactory, as long as you act before its deadline. More often, buyers negotiate: the seller makes repairs, lowers the price, or gives a credit toward closing costs, which counts as one of the seller concessions your loan limits. If major repairs are needed, the lender may require them before closing or ask you to fund a repair account. Without a contingency, the report still tells you what to budget for.
Choosing the inspector
Hire someone who works for you, not someone paid by another party to the sale or paid only if it closes, since that can soften the findings. Check references and your state or county licensing rules, which vary. Schedule the inspection as soon as your offer is accepted so any specialist checks the inspector recommends, such as for pests, radon or a sewer line, fit inside the contingency period, and attend so you can ask questions on the spot.
Related terms
- Appraisal, the lender’s valuation
- Earnest money, which a missed deadline can put at risk
- The appraisal and inspection guide
Sources
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.