What Is Home Inspector?
A home inspector examines the property's physical condition—roof, foundation, electrical, plumbing, HVAC—before you close. They don't value the property (that's an appraisal). They tell you what's broken, worn, or dangerous. Cost runs $300–$500 for a typical single-family; add-ons like termite or radon cost extra. You get a written report. If the inspection contingency is in your contract, you can walk or renegotiate if they find major issues. Skipping an inspection to save $400 can cost you $10,000+ in surprise repairs. BRRRR investors sometimes waive it when they've budgeted for rehab costs anyway—but that's a calculated risk.
A professional who examines a property's condition, systems, and structure before purchase.
At a Glance
- What it is: A licensed professional who examines a property's condition, systems, and structure before purchase.
- Why it matters: Uncovers hidden defects—foundation, roof, electrical, plumbing—that can blow your rehab costs or kill the deal.
- Typical cost: $300–$500 for single-family; $200–$250 under 1,000 sq ft, up to $500 for 2,500+ sq ft.
- Timing: Schedule during your inspection contingency window—usually 7–10 days from contract.
How It Works
You're under contract. The inspection contingency gives you a window—typically 7–10 days—to have the property examined. You hire a licensed home inspector. They walk the property, inside and out. They check the roof, foundation, electrical panel, plumbing, HVAC, insulation, and visible structure. They don't tear into walls or dig up the yard. They report what they can see and access.
What they deliver. A written report—often 20–50 pages with photos. It lists defects by category: safety issues, major repairs, minor items. "Roof has 3–5 years remaining." "Electrical panel is Federal Pacific—recommend replacement." "HVAC unit is 18 years old, not cooling below 78°." You use this to decide: walk, renegotiate, or proceed.
Add-on inspections. The standard inspection doesn't cover everything. Termite: $75–$150. Radon: $150–$300. Mold: $250–$400. Septic: $300–$500. In Memphis or Indianapolis, termite is common—add it. In radon-prone areas (parts of Ohio, Pennsylvania, Colorado), add radon. For a duplex or small multifamily, expect to pay more—inspectors often charge per unit or by square footage.
Inspection vs appraisal. Don't confuse them. The appraisal tells the lender what the property's worth—they're protecting their loan. The inspector tells you what's wrong with it—you're protecting your purchase. The lender doesn't care if the HVAC is shot. You do.
Real-World Example
Memphis 3-bed, first buy-and-hold. You're under contract at $118,000. Inspection costs $375. The report finds: roof has 4–6 years left, HVAC is 22 years old and not cooling below 76°, electrical panel is Zinsco (known fire hazard). You get quotes: roof $6,200, HVAC $4,800, panel $1,400. Total: $12,400. You ask the seller for an $8,000 credit. They counter at $4,500. You take it. You budget $7,900 out of pocket for the rest. You knew what you were buying. Without the inspection, you'd have closed and gotten hit with $12,400 in surprises in year one.
Indianapolis BRRRR flip. You're buying a $72,000 2-bed that needs a full rehab. You've already run ARV and rehab costs—$28,000 for the reno. You're paying cash, moving fast. You waive the inspection contingency to strengthen the offer. You're not stupid—you've walked the property, you know the foundation's solid, and you're replacing the HVAC and electrical anyway. The inspection would've told you what you already know. The $350 you save isn't worth losing the deal in a competitive market. But you're taking the risk. A hidden septic failure or a cracked foundation could blow your rehab costs. You've done the math. For a first-time investor, don't waive it.
Pros & Cons
- Uncovers defects before you're stuck with them—foundation, roof, electrical, plumbing.
- Gives you leverage to renegotiate or walk via the inspection contingency.
- Informs your rehab costs budget—you know what you're fixing.
- Relatively cheap—$300–$500 for peace of mind on a six-figure purchase.
- Written report is useful for planning repairs and prioritizing forced appreciation work.
- Adds cost and time—you're paying $300–$500 and waiting for the report.
- In hot markets, waiving inspection can make your offer stronger—you're giving that up.
- Inspectors can miss things—they're not tearing into walls or doing destructive testing.
- Some sellers get nervous when they see an inspection contingency—they fear the buyer will nickel-and-dime them.
Watch Out
- Execution risk: Schedule the inspection early in your contingency window. If the inspector finds something and you need a specialist—roof, HVAC, foundation—you need time to get quotes and negotiate. A 7-day window with an inspection on day 5 leaves you 2 days. Tight. Push for 10–14 days when you can.
- Modeling risk: Don't assume the inspector caught everything. They report what's visible. Hidden issues—leaks inside walls, failing septic under the yard—can still surprise you. Budget a 10–15% buffer on rehab costs for unknowns.
- Compliance risk: In some states, inspectors must be licensed. Check your state's requirements. An unlicensed inspector's report may not hold up if you need to invoke the contingency and the seller pushes back.
Ask an Investor
The Takeaway
A home inspector examines the property's condition before you close. For most investors, it's $300–$500 well spent—it uncovers defects that can renegotiate the price or give you an out. For BRRRR investors buying known rehabs, waiving the inspection can strengthen offers—but that's a calculated risk. First deal? Get the inspection. Always.