Everything First-Time Homebuyers Need to Know About Home Inspections & Option Periods

What First-Time Home Buyers Need to Know About Home InspectionsBuying your first home is an exciting time, but you want to make sure you don't miss any important steps. That means familiarizing yourself with the home inspection process and understanding the option period. It's essential to get a home inspection during the option period because this is your chance to reveal any deal-breaking issues with the home and rescind your offer without ramifications. Learn what to expect during your first home inspection and how understanding the process will prepare you for success.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

What Is a Home Inspection?

The home examination is a significant step in almost every real estate process transaction. Inspections enable buyers and sellers to find any potential problems with a property before finalizing its sale. A home inspection is different from an appraisal. Many types of home loans require an appraisal, whereas your mortgage lender may simply encourage you to get an inspection.

Buyers hire a home inspector after making an offer. The inspector conducts a thorough investigation to find structural problems, safety hazards, and other issues that could affect the value or livability of the house. A typical home inspection checklist includes:

  • Roofs
  • Exteriors
  • Foundations
  • Plumbing systems
  • Electrical systems
  • HVAC units
  • Interior components, such as walls and floors

Safety issues are especially scary for first-time homebuyers. However, you can rest easy after your home inspection. Inspectors will specifically look for the following potential safety hazards.

  • Faulty wiring or combustible materials
  • Poor maintenance
  • Hidden repairs
  • Poorly installed HVAC equipment
  • Non-adherence to local building codes
  • Signs of pest infestations
  • Bad drainage patterns

An experienced professional inspecting your prospective new home will provide peace of mind. You can trust that the investigator has thoroughly examined everything before you sign on the dotted line. After a good inspection, you will be much less likely to purchase a home with unknown issues.

Who Should Conduct the Home Inspection?

In most cases, the buyer is responsible for hiring the professional. This means identifying the qualities of a good home inspector and making the necessary arrangements. However, in more competitive selling markets, sellers may offer to pay for the home inspection as an incentive for the buyer.

Hiring a reliable professional home inspector is a must. The better inspector, the more thorough the home inspection. Ask for recommendations. Your realtor may have an inspector they recommend. Also, check references from past clients before hiring anyone.

What Is an Option Period?

The phrase "option period" goes by many names, such as inspection contingency or due diligence contingency. Despite its multiple names, this critical contingency clause is when a potential buyer can terminate their contract with the home's seller for any reason. It allows the potential buyer to conduct inspections and negotiate repairs with the seller. If the buyer decides not to go through with the sale during the option period, they can terminate the contract and receive all their earnest money back.

The option period is sometimes voluntary but highly recommended by real estate agents. The buyer must negotiate the entire option period – including its length, the option fee, etc. – with the seller. During the option period, the buyer should do the following:

  • Check for pests or mold
  • Obtain estimates for the cost of repairs
  • Review any existing warranties
  • Analyze title documents
  • Research local schools and amenities
  • Consult with your lender about financing options and related matters, such as closing costs

Thoroughly assessing the aspects mentioned above can assist the buyer in determining whether the sale is a good decision financially and personally.

How Long Is the Option Period?

The option period can be any amount of time agreed upon between both parties. It may be longer or shorter depending on the parties involved and their needs.

The buyer must pay the seller an option fee to create the option period. As with the length of the option period, the buyer negotiates the fee with the seller. The amount of the option fee will vary depending on the length of the option period and the strength of the real estate market.

Preparing for Your Home Inspection

Home inspections usually occur during the option period. They are an essential part of the home-buying process. Thus, the seller and buyer must prepare well for inspection day. Below, we discuss how the buyer and seller can prepare for the home inspection.


Before the inspection, the seller should collect all pertinent documents and information, such as the following:

  • The property's deed
  • Any warranties or guarantees on the house
  • An energy audit report, if available
  • Copies of previous inspections

Additionally, you should ensure that utilities are turned on and accessible to the inspector. Doing so will allow them to fully inspect the home's systems without waiting for access.

Once you complete the initial steps, you should set aside some time for readying your residence for the inspector's assessment, including completing the following tasks.

  • Clear away clutter from attics and basements
  • Clean all surfaces of dirt and grime to enable a comprehensive inspection
  • Open all doors
  • Check windows for drafts or broken seals
  • Inspect electrical outlets for proper grounding and insulation


The potential buyer should plan on being present for the entire home inspection. Doing so will allow you to watch the whole process and ask any questions. Do not worry if the inspector finds a lot of small problems. You can likely fix these easily. You need to watch out for large home inspection findings that could cost a lot of time and money to solve.

The home inspector will likely need a few days to finalize the report. Then you will receive the official version. After receiving their report, the buyer should prepare a list of questions to ask at their meeting with the inspector. These questions should help you determine what needs repairing or replacing. The inspector's answers to your questions will help you decide whether to proceed with the purchase.

After the Home Inspection Report Is Received

Once you receive the home inspection report, you should schedule a meeting to review it with the inspector. This meeting will help you decide whether to proceed with the purchase, as the inspector will walk you through the home inspection report. It provides a comprehensive outline of any problems the inspector observed during the inspection and suggested remedies or modifications the seller must complete before closing. Buyers should only rely on their own reports, as sellers aren't required to disclose previous inspections.

After walking through the home inspection report with the inspector, the buyer will begin negotiating the repairs with the seller. Always use written documentation when describing your repair requests. Written communication ensures everything stays formal and reduces potential misunderstandings.

Additionally, buyers may want to request additional inspections, such as radon testing or termite inspections, during the option period. These assessments can assist you in recognizing potential issues that went undetected during the initial home inspection.

Deciding whether or not to move forward with a purchase is often contingent upon the home inspection and negotiation with the seller. If the inspector discovers major issues, you may decide it is not worth investing in the extensive renovations required. However, buyers may also use this information as an opportunity to negotiate a lower cost.

In either case, remember: buyer beware. Take precautionary steps throughout the buying process by fully using the option period and employing trusted professionals to conduct the home inspection.

What Are Five Important Features Examined in a Home Inspection?

  1. Roof: A house inspector will look for any issues with the roof, such as deterioration and missing or slack shingles.
  2. Electrical System: The inspector will check the home's electrical panel to ensure it is up-to-date and safe from hazards, such as faulty outlets or exposed wires.
  3. Plumbing System: Inspectors look for issues, such as leaks, fixtures that are not working properly, clogged drains, and water pressure issues.
  4. HVAC System: Home inspectors ensure the heating and cooling systems function correctly by testing them during an inspection visit.
  5. Structural Integrity: An inspector will check the walls, ceilings, floors, and foundation to ensure they are structurally sound.

Be Prepared for Your First Home Inspection

The home inspection process and option period are important parts of the home-buying journey. Understanding what to expect during the option period and preparing well for your inspection will help you avoid home-buying mistakes. Use this information to help you make the best decision possible when purchasing your first home.

For informational purposes only. Always consult with a licensed real estate professional before proceeding with any real estate transaction.

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