According to the American Society of Home Inspectors (ASHI), nearly 84% of all home buyers will hire a home inspector as part of their home purchase. Home inspection costs can vary widely, primarily based on local market conditions. Let’s explore how much home inspection fees cost.
The US National average cost for a home inspection on a 1500 square foot house is $382 (concrete slab) and $432 (crawl space or basement). You can expect to pay about $45 per 500 square feet over a 1500sf base price. Home inspectors often price their services based on square footage and foundation type (see table below).
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You may also be debating whether a home inspection is worth the cost. Unless you have a vast amount of construction knowledge, a home inspection is worth the cost. A home inspection is worth the cost because it provides in-depth information on the home’s overall condition and safety concerns. A home inspection identifies what needs repair or improvement.
How Much is the Home Inspection Fee?
According to HomeAdvisor, the typical home inspection cost in 2021 ranges from $279 – $399. However, this number is somewhat vague and leaves out some important details. The most glaring omission is that the data does not represent how the vast majority of home inspectors price their home inspection services. The cost provided by HomeAdvisor represents what their customers actually paid for a home inspection, regardless of who performed the inspection. Allow me to explain.
From reading numerous Facebook posts and home inspector forum threads, most home inspectors who have been in business longer than 2 years do not participate in the lead generation programs like HomeAdvisor.
HomeAdvisor (and similar lead-generation services) attract new, inexperienced home inspectors who have not built a solid referral base. These home inspectors often compete with one another on price alone. This can skew the averages provided by HomeAdvisor or similar services.
Most homes in the U.S. are about 1500 heated square feet or less. Your location, square footage, and the home’s foundation style often determine how much your home inspection costs. Based on a poll of over 100 certified home inspectors, the average cost for a 1500 square foot house on a concrete slab average $382. A 1500 square foot house with a crawl space average $432.
I polled over 100 certified home inspectors across the United States and concluded that the following home inspection fees are a more accurate average representation:
|Square Footage (SF)||Basement/|
Home inspection costs vary by location and, in some markets, can be as much as $50-$200 higher than average. For instance, rates in the Northeast averaged about $150 higher than in some Southern states and areas with distressed market conditions and high unemployment. Home inspection fees also do not include ancillary inspection fees such as radon testing, mold testing, swimming pools, termite inspections, etc.
Beware of home inspectors offering reduced $199 home inspections. Most of these are scams or provide a minimal home inspection that often doesn’t meet the NACHI Standards of Practice.
Always ask your home inspector for a copy of their state license and association credentials (not all states have home inspector licensing), business references, and check online reviews such as Google My Business.
Who Pays the Home Inspection Fee?
We all know that no two real estate transactions are alike. Home inspections are an important part of the home purchase transaction. However, some buyers don’t realize it’s not part of the closing costs.
The home inspection fee is paid for by the client. The client is defined as whoever hired the home inspector. Most home inspectors require a signed agreement with the client that outlines terms and inspection costs.
There are situations where a seller will offer to pay for the buyer’s home inspection fees as part of the negotiations to secure the home’s sale. However, this is rare because the home inspection is part of the buyer’s due diligence.
To determine who covers the home inspection cost, we need to look deeper into the real estate purchase transaction to examine some of the factors influencing the negotiations. Let’s explore some scenarios that affect the real estate transaction.
In most cases, the buyer’s offer is made contingent on a home inspection. This contingency period allows ten days (in most states) to have the home inspected to verify there are no significant material defects.
The home buyer hires the home inspector, and thus it’s generally the buyer’s responsible for paying for the home inspector’s fee. The home inspection fee is usually paid upfront, either on or before the day of the home inspection.
The home inspector’s job is to examine the following areas of the home:
- Structure including foundation, attic, crawl space, or basement.
- Roof including roof coverings, gutters, eaves, and chimneys
- Exterior including site grading, vegetation, siding, doors, and windows
- Interior including walls, flooring, doors, and other finished surfaces
- Electrical including wiring, lights, meter box, panel boxes, outlets and switches
- Plumbing including supply and waste piping, water heater, and plumbing fixtures
- HVAC systems including heating and air conditioning units and ductwork
- Hazards including the presence of potential health and safety concerns
The home inspection goal is to verify that the home is free of structural material defects and that the home’s systems are in good working order and no health or safety issues.
The typical home inspection fee is $382, but this fee can vary widely depending on the home’s age, square footage, and foundation type. A 1500 square foot house on a slab foundation less than ten years old may cost $350, whereas a 4000 square foot house on a crawl space that is 50 years old may cost $650 or more.
Other factors that can affect the home inspection fee include if the property has detached structures, pools, well systems, or septic systems. Other services, such as radon or mold testing, also affect the home inspection fee.
Questions to Ask When Hiring a Home Inspector?
When hiring a home inspector, it’s important not to shop based on home inspection costs alone. Here are some questions you should ask before hiring an inspector that has nothing to do with price.
- Are you licensed or certified? Most states have licensing for home inspectors, but not all of them. NACHI and ASHI are the two leading certification groups for home inspectors. Most home inspectors are a member of one or the other, while some are a member of both.
- What is your experience or expertise? It’s essential to know how much experience a home inspector has before hiring them. Don’t necessarily get hung up on how long they’ve been licensed. Most home inspectors come from industry trades like engineering, HVAC, electricians, plumbers, or carpenters.
- Can I see a sample inspection report? It’s important to know what you are paying for. The home inspection report can provide valuable insight and set proper expectations.
- What does your home inspection include? Home inspectors have a set of Standards of Practice that they adhere to. However, many home inspectors go well beyond these standards to set themselves apart in the marketplace.
- Do I need any other services like radon testing? Home inspections don’t cover everything. Environmental concerns, like radon, are one of them. Ask about ancillary services you may need. Often, home inspectors will bundle these services and provide a discount.
- How do you inspect the roof? Home inspectors are not required to walk on roofs. Depending on weather conditions and roof design can affect how the roof is inspected. Ask about the various methods the inspector uses to inspect the roof.
- Can I attend the inspection? Since COVID, conditions in the market have shifted. Some states will only allow one person on-site for social distancing. Ask your inspector about their policy on this.
Can My Home Inspection Fee be Included in Closing Costs?
The expenses and fees associated with buying a home are known as closing costs. These are fees charged by the lender or other third parties for services rendered. The buyer or seller generally pay the home inspection fee upfront because it is not a lender requirement unless the appraiser notes structural damage. Home inspections are a part of the home buyer’s due diligence.
This doesn’t mean they are never included in the closing costs. Sometimes, depending on the type of financing, lenders will allow buyers to roll all fees together and pay a lump sum down at closing. An excellent example of this is with a VA or FHA loan.
This list outlines some of the typical costs and when they are due.
- Mortgage application fees or loan origination fees – These are the fees that the lender charges to underwrite the loan. These fees are generally paid at closing or financed into the note.
- CL100 Report, also known as the Wood Destroying Insect Inspection fee – Lenders require a CL100 or wood destroying insect inspection (also known as a termite inspection) report to verify the home is free of termites and other wood-destroying insects. This inspection fee is mandatory and is generally paid from the seller’s proceeds at closing.
- Fees for a survey, title search, and recording fees – These fees are paid by either the seller or buyer and at closing.
- Brokerage commission – This is the commission paid to the real estate brokers handling the sales transaction. There is generally a buyer’s agent and a seller’s agent who split the commission.
- Property insurance – Paid to the insurance company to write the insurance policy for the property. This fee is paid for by the home buyer.
- Property taxes – These are the property taxes paid to the city or county the property is located. This amount is typically prorated and has to be calculated before closing.
- Lender Buy Down Points -This is a lender fee charged to reduce the interest rate through the loan’s life. One point is equal to one percent of the loan amount.
Knowing Your Economic Housing Market Conditions
In a stable real estate market, the home inventory available for sale and the number of possible qualified home buyers are relatively equal. In this market environment, negotiations rule the real estate deal. When a buyer finds a house, they love and submit an offer to purchase, the real estate agent will make the offer “contingent on the home inspection,” allowing them time to hire a home inspector and get the home inspected.
However, during certain economic market conditions, sellers and buyers can negotiate the home price and other items like inspection fees, appraisal fees, and closing costs. We need to examine these economic conditions and how they influence who has to pay for the home inspection fee.
Home Inspections in a Seller’s Market
In a seller’s market, the demand for houses exceeds supply. This means that more buyers seek to purchase a home than there are available homes for sale in the market place. In a “hot” real estate market, many homes sell in less than 30 days and, in some cases, less than a week. This often leads to a seller receiving multiple offers from qualified buyers interested in a single house, resulting in bidding wars where a home buyer will pay thousands of dollars over the house’s list price.
In this scenario, a seller holds all of the leverage and often gives up very little during negotiations. In some instances, a home buyer will even offer to waive their right to a home inspection if they fear the house may sell to another buyer and can lead to the buyer accepting the home “as is” indicated on the seller’s disclosure.
The danger of accepting the home “as-is” is that the buyer assumes the house and any potential home problems. If there are hidden defects, the buyer was not aware of, the buyer has no recourse to go back to the seller and ask for repairs.
Home Inspections in a Buyer’s Market
In a buyer’s market, the demand for qualified buyers exceeds the supply of housing inventory. There are more houses in the market available for sale than possible qualified buyers to purchase them, leading to sellers offering homes at deep discounts if a qualified buyer is interested in their home.
Buyers hold a significant advantage during negotiations. A seller who needs to sell their home quickly will often offer to cover all of the buyer’s closing costs, including inspection fees, to secure the sale and keep from losing a qualified buyer.
When a seller offers to pay the home inspection fee, they assume many risks. If the buyer’s home inspector discovers a significant defect during the inspection, the seller would need to cover the cost of the inspection fee and the value of the repair or risk losing the qualified buyer.
Can you negotiate repairs after the home inspection? After a completed home inspection, your real estate agent will sit down with you to review the inspection report and draft a repair addendum to help you negotiate home inspection repairs.
Some items revealed inside the inspection report that was not on the property disclosure may be negotiated or repaired in most states. You should seek counsel from a licensed real estate broker because this can vary from state to state. Cosmetic items are not necessary repairs.
For more information on passing a home inspection, see our article 35 Seller Tips to Pass a Home Inspection.
Can a buyer walk away after a home inspection? The home inspector would need to identify a material defect in the home that the seller is unwilling to repair for a buyer to walk away after the home inspection negotiations and receive their escrow money refunded to them.
If the buyer walks away without allowing the seller to correct the repair, the buyer risks forfeiting part or all of the escrow money deposit. This depends a lot on how the home inspection contingency is drafted.
Do sellers have to fix everything on the home inspection report? In most states, if a home inspection report reveals a material defect not listed in the property disclosure, repair may be required. These repairs include structural damage, wood rot, a leaky roof, plumbing leaks, electrical defects, and mechanical defects. If a buyer may sign an “as is” purchase offer, the home inspection findings are mainly for the buyer’s information.