Is one of the homes you’re thinking about buying something akin to a ‘scratch and dent’ special? In general the property is okay but there are certainly some things that you’d want to fix before or right after you moved in, should you in fact do so. This is where the property inspection report comes into play. Note here, the inspection report is not the same as a property appraisal. 

The appraisal helps determine the market value of the home while the inspection attempts to identify any structural or physical issues. A full appraisal, should your lender require one, will in fact make note of the property’s overall condition but basic repairs, relative minor ones, are not listed. BTW, if you’re tempted to forgo an inspection, I think you’re making a mistake. A thorough inspection is well worth the investment. Your real estate agent can point you to some qualified property inspectors.

Let’s first look at some basic repairs. Maybe the windows need some recaulking. Perhaps the carpet is a bit too worn out. Cracks in the sidewalk? All of these items are relatively minor and your lender probably won’t care about any carpeting issues before approving a home loan application. The cracks in the sidewalk might be an issue but typically won’t be  unless the interior door jams show signs of settlement. 

If this turns out to be one of your prospective buys, it pays to hire an engineer to determine the cause of the settlement and if the property needs to be lifted in certain parts of the home in order to alleviate any settlement. Otherwise, the property should move through the loan approval process.

However, there are some needed repairs that appraisers will note ‘deferred maintenance’ associated with the home. As the name implies, the property needs to have certain issues fixed that should have been fixed some time ago. The issues weren’t alleviated but instead put off. Maybe to let the next buyer deal with them. But if the term ‘deferred maintenance’ does pop up somewhere, your lender will have a problem with that.

Mold in the home noted? Your lender will want more information before moving further. Foundation cracks? It’s time to call in the engineer for a report. Cracked or broken windows? That’s typically a lender call but in all likelihood the lender will want these repairs to be completed.

Your prospective home is probably the biggest expense you’ll incur in your lifetime. That said, it pays to make sure the property is in livable condition, and the lender wants to make sure the home is in such a condition that financing won’t be a problem.