Reader question: “We will be purchasing our first home in early 2020. My question has to do with the home inspection and offer process, and the timing of those two things. Does the home inspection usually happen before or after the offer is made to the seller?”
The short answer: While the home buying process can vary from one buyer to another, it usually follows a certain series of steps. In most cases, the inspection happens after the offer has been accepted by the seller. This is a logical sequence of events for both the home buyer and seller, and you’ll soon see why.
The Inspection Usually Happens After the Offer
It’s entirely possible to inspect a home before making an offer to buy it. You would just need permission from the homeowner / seller, in order to schedule the inspection and give the inspector access to the property.
But that’s not how it works in a typical home buying scenario.
In most cases, the buyer’s inspection will take place after they have made an offer and the seller has accepted it. We will examine the reasons why this makes sense in a moment. But first, let’s take a look at the steps that occur during a typical home buying scenario.
Here’s the typical sequence of events:
- The home buyers get their financing lined up and begin the house hunting process.
- The buyers find a property that meets their needs and also falls within their budget.
- They make an offer to purchase the home, using a standard real estate purchase agreement document. In many cases, it’s actually the buyer’s real estate agent who submits the offer to the seller.
- The seller accepts the buyer’s offer, agreeing to the price and other terms that were written into the contract
- The two parties will then sign the real estate purchase agreement, and the deal moves forward.
- At this point, home buyers often schedule an inspection to learn more about the true condition of the property they’re buying.
Those are the basic steps that lead up to the home inspection process. And you’ll notice it happens after an offer has been made and accepted — not before. It makes sense to handle the steps in this order, for both the buyer and the seller. So let’s look at it from both perspectives.
Advantages for the Home Buyer
As the buyer in a real estate transaction, you will be the one paying for the home inspection. They typically cost somewhere between $300 and $500, on average.
You wouldn’t want to spend that kind of money unless you were sure the seller was going to accept your offer. That’s why it makes sense to make the offer first, and then coordinate the inspection afterward.
Having the home inspection take place after the offer – and before the closing process – also gives the home buyer a chance to back out of the deal in some cases. We’ve covered this topic before. Here’s a quick recap:
When buying a house, you have the opportunity to write certain “contingencies” into your purchase offer. (Here’s an article that explains the different types of contingencies.) Basically, they give you a way to back out of the contract if a certain situation or condition arises, such as an unsatisfactory home inspection.
But this kind of “contingency clause” must be written into the contract at the start. This is another reason why it’s logical to conduct the inspection after the offer is accepted.
From the Seller’s Perspective…
In a typical real estate purchasing scenario, the homeowner won’t allow the inspection to take place until after they’ve accepted the offer. And it’s easy to understand why, if you put yourself in their shoes.
The home inspection is somewhat invasive for the seller. In most cases, the sellers will leave so that the inspector can do what he needs to do uninterrupted. They also have to grant the inspector access to the house.
Most sellers will only go through this process once they have accepted what they feel is a reasonable offer from a buyer. If they reversed the process, and allowed for a home inspection before the offer, they might be having an inspector examining their home for no reason. Maybe the buyer comes in with a low offer, which the seller then turns down.
In that case the whole home inspection process was a waste of time for everyone. (Not to mention being a waste of money for the buyer.)
It’s also important to realize that home inspections are not mandatory. At HBI, we strongly encourage buyers to have a property inspected before purchasing it. That’s the best way to learn about the true condition of the property. But they’re not required by law. You could make an offer to buy a home and skip the inspection, if you wanted to.
But if you do choose to have one, there’s a good chance it will take place after the offer — not before. We talked about the reasons why. It makes sense from both the buyer’s and the seller’s perspective. You negotiate the offer first, get a signed contract, and then proceed with the home inspection, appraisal, etc.