Inspecting the physical condition of a house is an important part of the home-buying process, for purposes of understanding whether you're paying an appropriate price for the house and what repairs it might need before or after you move in; not to mention whether you want the property at all.
In an ideal world, a home inspection should be included in your purchase contract as a condition of closing the sale (a "contingency"). In tight markets, buyers are known to waive the inspection contingency, to make their offer more attractive to the seller. It's a risk you'll have to evaluate with the help of your agent. One middle-ground option is to condition the sale on what's known as a "yes/no" inspection, meaning that you can use the results as a reason to back out of the deal entirely (with the assumption that this you'd do this only because something major turned up) but won't use it as a basis to negotiate for price reductions or repairs.
No matter how good the house looked, or how savvy your real estate agent, it takes a professional to test and prod for hidden defects. Even if the seller provides you an inspection report, it's best not to rely on this alone. The seller might have chosen an inspector who's not known for rooting out problems.
You'll likely want to hire at least one and possibly more professionals to check out the building's structure, systems, and physical components, such as the roof, plumbing, electrical and heating/cooling systems, major appliances, floor surfaces and paint, windows and doors, and foundation, and detect pest infestations or dry rot and similar damage. The inspector should also examine the land around the house for issues concerning grading, drainage, retaining walls, and plants affecting the house.
Ask for disclosures before you get an inspection. In many states, such as California, sellers are required to disclose considerable information about the condition of the house itself and potential hazards to the property. (See Required Disclosures When Selling U.S. Real Estate.) But this is just the beginning: Not all sellers know about problems with the house or honestly disclose them. (Sometimes they've lived with a problem for so long that they've literally forgotten it's there!) Nevertheless, the disclosures are useful to hand to your inspector for follow-up on known issues.
Most buyers get professional inspections only after they're in contract to buy the property. The closing of the deal is commonly made contingent on the buyers' approving the results of one or more inspections. The buyer arranges and schedules the inspections.
Before paying for a professional inspection, you can conduct your own informal inspection. Look for issues like sloping floors or bowing walls, signs of water damage, missing roof shingles or gutters coming loose, old or low-quality fixtures and appliances, and other signs of wear, tear, or needed repair. The best time to do this is before you make an offer, so that you can save yourself the trouble should you find serious problems.
You'll find a checklist and further instructions in Nolo's Essential Guide to Buying Your First Home.
Another, less commonly used possibility is to ask the seller to let you do a "preinspection" before submitting your offer. Why, given the cost of these inspections, would you do this?
Because if you're in a situation where you're competing against other buyers (which can happen in any market, if a house is particularly desirable), this can help you set your offer apart. You'd most likely be able to submit an offer without an inspection contingency, thus reassuring the seller that your offer price is firm, not something you're likely to whittle away at after you're in contract, based on whatever a later inspection reveals. (On the other hand, you risk coming in with an offer price that's lower than others', having taken the house's problems into account; which only you know about at that point.)
Some sellers will refuse to allow preinspections in any case, particularly because, if you alert them to problems with the house, they're then likely obligated to divulge these to other potential buyers as part of their state's disclosure laws.
Hire a general contractor or home inspector to inspect all major house systems, from top to bottom, including the roof, plumbing, electrical and heating systems, foundation, and drainage.
This will take two or three hours and likely cost you $300 or more, depending on the location, size, age, and type of home. Accompany the inspector during the examination, so that you can learn more about the maintenance and preservation of the house, ask questions, and get a real sense of which problems are serious and which are relatively minor. (The inspector will write everything down on the report, so reading it can be a bit scary if you hadn't already seen that, for instance, "cellulose against the foundation" just meant a pile of old leaves that you could easily remove.)
In addition to the general inspector, it's wise to hire a licensed structural pest control inspector, who will create a special pest report on the property (unless the seller has already commissioned one. Pest inspectors, unlike general inspectors, traditionally accept work on properties they've inspected, so they have every interest in finding problems).
The pest inspector will look for infestation by wood-boring insects such as termites and flying beetles, as well as evidence of dry rot and other fungal conditions.
Some general contractors are also licensed pest control inspectors, but will normally charge extra for doing double duty. Be sure you get a written report of all inspections.
Depending on the property and your personal sensitivities, you might want to arrange specialized inspections for hazards from floods, earthquakes, and other natural disasters. The same goes for environmental health hazards such as mold, asbestos, and lead. If the garden area is important to you, or has features beyond the general inspector's expertise such as a pond or fountain, you might also need a separate landscape inspector.
And, if the general inspection revealed problems with the roof, foundation, or other areas that are hard to access or potentially expensive to repair, you might also want to hire a specialized inspector.
If the inspection reports show that the house is in good shape, you can proceed with the purchase, knowing that you're getting what you paid for.
If the inspections bring problems to light, such as an antiquated plumbing system or major termite damage, you can negotiate to have the seller pay for necessary repairs or to lower the purchase price. Or, you can back out of the deal, assuming your contract is written to allow you to do so.
To learn how to include an inspection contingency in your real estate purchase contract, see Contingencies to Include in Your House Purchase Contract.
For detailed information on all aspects of house buying, including more information on inspections and negotiations, get Nolo's Essential Guide to Buying Your First Home, by Ilona Bray, Ann O'Connell, and Marcia Stewart (Nolo).