Buying a House? Building and Pest Inspection Will Save You Money

Get an Inspection and Energy Audit Before Making an Offer

Copyright © Michelle Lee; All rights reserved; content may not be copied, rewritten, or republished without author’s written permission. Posted June 15, 2012

Formosan termites swarm; photo courtesy United States Department of Agriculture


The question of whether to rent or to buy a house is a bug to many people. Often, it is much better to purchase your own house than to rent as soon as you acquire enough funds. However, you do not have to pay cash when buying a home.

If you do not have enough money on hand, you may approach a bank for a house loan known as a mortgage. A mortgage is a special kind of loan for which you make monthly payments for a period of about 15 to 30 years.

After this you stop making any further payments. Your monthly payments go into an escrow fund from which bills are paid, such as homeowners insurance, PMI, loan principal, and loan interest. Depending on where you live, flood insurance may also be paid.

A Home Down Payment will Lower Mortgage Costs

It is advisable to make a down payment of a certain percentage of the purchase price of the house. A cash down payment will make it easier for you to get a bank loan. It will also lower the monthly premiums that you will pay for the mortgage and the interest rate.

The monthly installments will probably cost 1% to 1.5% of the total sale price. For example, if the home costs $100,000, the monthly payments will range from anything between $1000 and $1500. There are other miscellaneous costs involved, such as inspection fees processing fees and so forth.

The actual interest rate you lock in will depend on what the current market is going for and your loan risk assessment. Right now the rates are favorable due to the housing market melt-down.

Get a Home Inspection Before Making a Real Estate Offer

After securing a mortgage, but BEFORE purchase you will need to get a certified inspector to carry out the inspection of your house. Inspection is necessary for the bank to approve the loan; they will want to know that the loan is to be used to buy a proper building!

You will have to pay for the inspection yourself. The inspection covers:

  • Structural inspection
  • Pest Inspection
  • You may also opt to perform an energy audit to find out what upgrades you need to do to lower energy bills. This may affect your bid offer.

A structural inspection will cover the physical aspects of the house, making judgment on whether the house is structurally sound. The duration of an inspection should not be more than one hour.

To get a good inspector, as with most other things, you can get references from friend or perform a simple internet search. I live in Australia and I use this building and pest company from Brisbane.

A pest inspection can be carried out by the same inspector who carries out the structural inspection. The most troublesome pests, of course, are termites. Termites can cause major structural damage by causing wooden parts of the house or foundation to rot.

Termites can be gotten rid of, so it should not be a cause for concern if termites are found nested in the house. A pest control company will advise on the best kind of pesticide to exterminate the termites.

What if major problems are discovered after inspection?

Should the inspection uncover major problems, any of the following actions may be taken:

  • You will need to discuss with the owner if the problems can be fixed, and at whose cost.
  • You may also request the owner to lower the cost of purchase. The lower cost should be attributed to the cost that will go into fixing the problems that the inspection uncovered.
  • You may choose to fix the problems by yourself after you purchase the house.

These remedies will depend on the terms of the contract of purchase. Good luck!

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