FHA Loan Issues: Seller Inspections
The National Association of Certified Home Inspectors’ official site says seller inspections (also known as pre-listing inspections, are useful for sellers because they don’t get surprised by the borrower’s inspection. If there are hidden problems in the home, both buyer and seller know ahead of time that the issue exists.
But some borrowers want to know if the seller’s inspection can be trusted. Why should you believe the contents of the report? In general, the inspection is meant to be an honest and independent review of the property, in order to give the owner a realistic view of the home’s true condition.
Any problem with a home that could become a deal-breaker would be listed in that report if it exists. And so might problems that don’t discourage you from buying but do make a difference in how much it will cost to correct.
But you would definitely be making a more informed decision about the home thanks to that inspection report.
In some cases, a seller might wonder why bother doing an inspection at all? In the case of newer homes, does an inspection even help? The short answer is yes--even if the inspection tells you the home is not what you originally thought, condition-wise.
In some cases that report could be viewed as a place where negotiations can begin--does the price include an adjustment for repairing an item mentioned by the home inspector?
And on that note, a buyer might decide to choose an FHA 203(k) Rehabilitation Mortgage to address the issue instead of trying to buy the home with an FHA 203(b) loan.
As you might guess, issues on the inspector’s report aren't always a deal killer if you know you have an option for a different type of FHA mortgage that can be used to both buy and repair a house.
One thing you should know; seller inspections are not required for FHA home loan approval and you may wish to have the property inspected yourself in any case. Furthermore, a seller inspection is not the same thing as an FHA appraisal. Your lender will require an appraisal even if you have the home inspected and the results are not guaranteed to agree with the appraisal.
You can ask a real estate agent if a seller inspection report is available for the properties you want to consider buying--the report may help you make a more informed decision about which ones to take seriously as a house hunter and which ones to take a pass on.
Learn About the Path to Homeownership
Take the guesswork out of buying and owning a home. Once you know where you want to go, we'll get you there in 9 steps.
Step 1: How Much Can You Afford?
Step 2: Know Your Homebuyer Rights
Step 3: Basic Mortgage Terminology
Step 4: Shopping for a Mortgage
Step 5: Shopping for Your Home
Step 6: Making an Offer to the Seller
Step 7: Getting a Home Inspection
Step 8: Homeowner's Insurance
Step 9: What to Expect at Closing
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