January 18, 2011
FHA home inspections are an important part of the FHA loan process. The home inspection–which is not the same thing as the home appraisal– is not mandatory, but a home buyer should never assume that an FHA appraisal–required before a loan can be approved– was able to spot potential problems with the home.
An FHA appraiser comes to establish fair market value and to insure the property lives up to the FHA minimum property standards. The word “minimum” is the key in that phrase, which is why an FHA loan applicant should always hire a property inspector to look at the house before a commitment to buy is made.
Borrowers can sign paperwork indicating they are interested in buying the home prior to a home inspection, but the buyer should always insist on language in the purchase contract that states something to the effect that the purchase is contingent on the satisfactory results of the property inspection.
When it comes time to hire the property inspector there are several things you should know, including the inspector’s experience level, membership in any professional associations, and contact information for references. Buyers should always ask what the inspection covers.
Buyers should never be left in the dark about what the inspector will do, where in the home they will go and how the home is judged. You should ask the inspector to provide a sample inspection report as a reference for what to expect in your own case.
Some inspectors may offer to perform repairs and maintenance on the issues discovered during the inspection. Some state or local codes allow this, others forbid it as a conflict of interest. Know the rules before you’re made an offer.
Homeowners should accompany the inspector as he or she examines the property. This can give first-time home buyers valuable insight for future reference. How does the inspector determine what’s right or wrong with a home? See the property though the inspector’s eyes to get a better idea of what to look for in a property–it can be quite revealing.
Think twice about hiring any inspector who won’t allow you to come along to watch. That refusal is, in the words of the Department of Veterans Affairs, “a red flag”.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
Browse by Date: