If you’ve been budgeting for your first home, you’ve probably wondered who is responsible for paying the home inspection fee and the cost of repairs. The truth is, buyers may choose to schedule and pay for a home inspection to protect themselves before making a large home purchase, but proactive sellers may also choose to get the home inspected to fix major issues before going to market. Depending on several factors like market conditions and state laws, the person responsible for paying for the repairs after a home inspection may vary.
Types of home inspections
Home inspections are generally referred to as either standard or specialized. A standard home inspection is the most common. This type of home inspection covers the property’s structure, construction, mechanical systems, electrical and plumbing.
A specialized inspection will usually include items that are not covered in a standard inspection, such as pest issues, mold, radon, lead-based paint, asbestos, sewer and septic systems. Things that are often considered health and safety concerns.
Who pays for the inspection when buying a house?
If the buyer chooses to get the home inspected before purchasing it, the buyer is responsible for paying the home inspection fee. If a seller chooses to get their home pre-inspected to fix any underlying issues before listing, the seller is responsible for paying for the inspection. The inspection fee is always paid out of pocket to the licensed inspector of your choosing, rather than rolled into the mortgage or closing costs.
How much does a home inspection cost?
Home inspections can cost anywhere between $250 and $700, depending on the size of the home and where you live. Prices can also vary based on the experience level of the inspector, the scope of the inspection and whether it’s a standard or a specialized inspection.
Do I need a home inspection?
While a home inspection isn’t required, it’s almost always a good idea to get a home inspected by a licensed inspector before buying it. A home inspection is the best way to find out about any glaring defects in the home you’re about to buy. By including an inspection contingency in your offer, you can use the findings from the inspection report to negotiate repairs or credits with the seller to have them cover the cost of needed repairs. If you’re unable to re-negotiate, you can also use the contingency to back out of the home purchase all together.
Here’s an example. Let’s say you offer fair market value for a home only to find out it needs $15,000 in repairs. The home inspection gives you the opportunity to negotiate a price reduction with the seller for either the full cost of repairs (which can save you between $14,300 and $14,750 after the inspection fee) or a credit for a portion of the repair costs.
Who pays for repairs after a home inspection?
When buying a home, you can negotiate with the seller to have them pay for the cost of repairs based on the findings from the home inspection report. Depending on your contract, you usually have 5-10 business days to conduct the inspection and request any repairs in writing.
According to a 2022 Zillow survey of successful buyers, 78% of buyers included a home inspection as a contingency in all of their offers done; and the Zillow Group Consumer Housing Trends Report 2022 found that 90% of sellers said that at least one buyer completed an inspection on the home they sold. Determining who pays for repairs after a home inspection, the buyer or the seller, usually depends on:
State laws: In some states, sellers are required to repair certain items that are considered health and safety hazards like severe water damage, mold issues, smoke detector failures and building code violations.
Negotiation skills: Whether or not the seller agrees to pay some or all of the needed repairs often boils down to your real estate agent’s expertise.
Market conditions: In a competitive seller’s market, buyers often waive the inspection contingency in order to make their offer appear stronger. Without a contingency, you aren’t able to renegotiate based on any inspection findings. Even with a contingency, you may avoid asking for repairs in order to keep the deal moving forward. In a buyer’s market, however, you generally hold more negotiating power.