Home inspection is part of the process. However, the market has gotten tighter in the last few years, and buyers increasingly forgo the home inspection to make their offers more attractive. Even if forgoing the home inspection is necessary to make you more competitive, have one for your own knowledge and peace of mind.

If you decide to forgo the home inspection contingency, know that you take a risk of problems with the house that you will have to fix. To reduce your risk, take some courses in home inspection and read books on the subject. The goal is not to become a professional home inspector but to give you enough knowledge to make an informed decision. If you walk around the house after a rainy day and find a damp basement, it is a red flag that the house may have poor drainage system. Walk outside to check for the grading and surface drainage. Use common sense and learn to become your own home inspector.

The age of the house is another factor that can help you decide whether you want to take the risk or not. If the house is less than 10 years old, you know that the roof, siding and major systems are probably in fine condition, assuming normal wear and tear. How do you know? Based on life spans. Here are a few:

The inspection industry is not very well regulated, making it tricky to find a good inspector. Your agent should be a good source. Your friends, neighbors, coworkers, or family members may also be able to refer you to someone.

The American Society of Home Inspectors (ASHI) established the ASHI Standards of Practice and Code of Ethics to promote professional performance and to protect consumers. Although you may find good home inspectors who are not members of ASHI, selecting an ASHI member gives you the comfort that he or she has been through at least 250 fee-paid inspections in accordance with ASHI Standards of Practice and passed written exams on residential construction, defect recognition, inspection techniques, and report writing. Regardless of who you select as your home inspector, make sure a home inspection report will be produced within two business days. The cost of a home inspection runs between $250 to $400, depending on the size of the house.

Although you are not required to be present at the home inspection, it is strongly recommended that you be there. If you are the first time home buyer, chances are you do not know all components of the house and how they operate. You will learn a great deal about the structure of the house, as well as its other systems, and learn what to look out for to prevent costly repairs or replacements and what to do in an emergency. Take a check list with you, and take notes while accompanying the home inspector. Your agent should be at the home inspection as well. Ask questions but don't disrupt the home inspector's work. It is to your advantage to let him or her do the work thoroughly and not be distracted. You may save your questions till the end of each room.

If home inspection is a contingency in your contract, share the report with the seller and ask him or her to fix things that are broken. Indicate how you would like them to be fixed. Put your request in writing. When it comes to the contract, verbal communication does not count.

If home inspection is not a contingency in your contract, it is your responsibility to fix broken things for your safety. It may also save you money in the long run to repair rather than replace. Remember that this is a risk that you accepted by forgoing the home inspection as a contingency on the contract.

Your home inspector is not required to check for compliance with building codes. For additions or modifications made to the house, it is wise to ask the seller if the addition or modification has a permit. If it is built without a permit, beware that you may be asked to take down the structure at your own cost.

An appraisal is different from a home inspection. An appraisal estimates the value of a house. The lender would want to know how much your potential house is worth before lending you money to buy it. Your future house will be compared to similar houses in the area with similar size, style, and features. Some appraisers do an on-site appraisal, while others run the appraisal through the computer. Lenders have approved appraisers that they like to use. In the event there is a disagreement on the appraised value of the house, you can order an independent appraisal.

To legitimately own the house, you need to have a clean title. A title search verifies the house’s actual owner and whether there are any legal claims (liens) against the house. Any problems with the title need to be addressed before closing.

Your lender will require you to buy title insurance to protect against claims against the house. There are two types of title insurance: lender's and buyer's. While your lender will require a lender's policy, an owner's policy is not required. It is recommended that you also buy an owner's policy to protect you. You will have to pay for both. You may be able to get a discount if the seller is willing to transfer his/her policy to you.

The lender will ask for a survey of the property. A survey is a drawing of the house boundaries, where all the lines start and end. It is dangerous to assume you know your future property lines without a professional survey. The survey will help you understand your legal rights in the property and what comes with it– i.e., a driveway, yard, or fence.

Most lenders require a termite inspection to make sure they are not lending money to buy a house eaten by termites which may crumble at any time.

This is the opportunity to check out the house to make sure it is in the condition you and the seller agreed upon in the contract. Any problems discovered previously that the seller agreed to fix should be corrected. If you find uncorrected problems, they should be brought up prior to closing.

At Closing

From the buyer's side, your real estate agent will be present at the closing to help you with the process.  If you have a good loan agent, he or she also is present to help provide any additional information or work with the loan office should the loan documents need to be revised.

From the seller's side, the seller's agent to represent the seller, the seller or his/her "power of attorney" who can sign and make decision on the seller's behalf. 

And then there are people from the title company, a closing agent, and sometimes attorneys from the seller's side and your lender.  Don't let the number of people at closing distract you.  You need to know 2 things: what you need to bring to the closing and what papers you will sign and receive.

You need to bring the following:

1. A cashier's check for the closing costs disclosed to you prior to the closing date
2. Your IDs (bring one with picture)
3. Other documents required by the lender (Insurance Certificate, for example) 

Closing costs include lender/broker fees (points, administrative, processing, credit reports, and underwriting fees), third party fees (appraisal, survey, title, and attorneys’ fees) and government fees (recording fees and local taxes).

RESPA (Real Estate Settlement and Procedures Act) requires the lender/broker, in good faith, to disclose what fees they are charging you and how much. They should provide you with a good faith estimate of the closing costs. Take the time to go over every line, and make sure you understand what you are paying and why you are paying it. If your lender/broker won’t explain these items to you, find one who will and is willing to assist you in any way possible.