The right way to do a home inspection: you can save thousands by identifying problems before you buy.

WHEN TONY JONES AND his wife, Nikkia, bought their first home in Atlanta in 2004, they made sure to have it inspected before signing off on the deal. The home was newly constructed and they intended to live in it for years, so they wanted to make sure everything was just right.

"We wanted to get an inspection because we are in an industrial area and we wanted to get testing done for radon, for water clarity, and for air quality," Jones says. "We wanted to make sure that we were getting a quality-built home."

The home inspection is a visual examination of the physical structure, major components, and mechanical systems of a home. It is meant to give the buyer a reasonable, unbiased disclosure of the conditions existing in the home before the purchase. That includes visible physical defects or any significant health or safety hazards.

"[Home buyers] need to be able to sleep well at night knowing that they've made the proper decision," says George Haynie, an Atlanta area home inspector who is on the board of directors of the Georgia Association of Home Inspectors. "The job of the home inspector is to make the purchasers more informed consumers."

Finding problems before you close on the deal can provide leverage to negotiate a better price or give you the chance to have the seller make repairs you won't have to pay for. Follow these recommendations to make sure your inspection makes the grade.

CHECK THE SALES AGREEMENT

Typically, you will have time to have a professional property inspection done before closing. But you must be certain to have this provision included in your sales contract.

"In most cases the buyer is requesting that if the seller accepts the offer, they are accepting with the contingency that the buyer has a home inspection completed within a certain number of days," says JoAnne Poole, former president of the Maryland Association of Realtors. After the inspection, the buyer then has to respond to the seller within a reasonable number of days to discuss how to proceed.

There are several items that should be clearly spelled out. Poole says the sales agreement should state which repairs the seller is willing to make if any problems are found during the inspection. It should also note the circumstances under which the buyer can ask for release of contract and receive a full refund of earnest money (the deposit submitted with your offer to show good faith). This could happen, for example, if the inspector finds a major defect that the buyer finds unacceptable.

FIND A GOOD INSPECTOR

Once the provisions of the sales agreement are in place, find a reputable inspector. Realtors may have an inspector in mind, but conduct your own research. Ask friends and family, real estate professionals, mortgage brokers, real estate attorneys, or appraisers for referrals. There are local and national home inspector associations that can provide referrals, references, and background information (see sidebar: "Home Inspection Checklist").

The Joneses consulted someone who had experience inspecting and building homes. "It's good to get somebody for new construction who has constructed homes in order to get an opinion on how the home is built and how it's flamed," says Jones.

Only 30 states regulate or license home inspectors, so buyers must be aggressive about researching an inspector's background. "You've got to be very careful because there are some associations out there that have what they call certification, which, frankly, is worthless," says Don Norman, president of the American Society of Home Inspectors. ASHI is one of the nation's largest home-inspector associations. Norman says home buyers should do their own homework when looking for an inspector. "Ask what have they done to become certified," he says.

Keep in mind that an inspection report only details problems as they exist at the time of the inspection; it does not advise whether potential buyers should purchase the house. Norman suggests asking yourself: How much is it going to cost to fix it and who's going to pay for it? "If you can answer both of those questions and be satisfied with the answers, then there's no reason not to proceed with the purchase," he says.

ASHI inspectors must pass tests to become certified. Norman acknowledges that there are good home inspectors who are not affiliated with an association, but such affiliations give you "a way to establish some benchmark for the inspector you're going to hire."

You can expect to pay $300 to $500 to have a home inspected. Cost varies by size, age, and geographical location. Good inspectors offer written reports--not just a checklist--that describe in detail all of the home's defects. Norman says it can take two-and-a-half to three-and-a-half hours to thoroughly inspect an average home and generate a report.

After your inspection is complete, watch for conflicts of interest with your inspector. While many inspectors have building, general contracting, or carpentry experience, he or she should never offer to fix problems. Norman says this is part of ASHI's protocol.

NEWER HOMES VERSUS OLDER HOMES

When Amanda Phillips bought her first home in Baltimore five years ago, she knew she was buying a 51-year-old structure, so having it inspected gave her comfort. She purchased the home when she was single and hoping to have a family, which she now has, with husband, Joseph, 34, and 2-year-old Sumaiyah. "I really wanted to know what I was getting into, what my possible expenses would be after purchasing the property, and what things I could negotiate with the current owner," she says. "If you're willing to pay hundreds of thousands of dollars for a home, then a couple of hundred dollars for an inspection is more than worth it for your peace of mind."

The same major systems are inspected on both new and older homes. Older homes will almost always have more defects, because of their age, and they tend to have electrical and plumbing issues. "A good inspector will tell the home buyer up front that this older home is not going

to meet modern building standards," says Haynie. Knowing the problems gives you the opportunity to bring the property up-to-date.

For newly constructed homes, it may be more important to have the major workmanship inspected as the home is built. There are three important times to have a home inspected:

* Foundation A home is only as good as what it's standing on. If you're purchasing a newly constructed home, try to have the foundation inspected before the cement is poured. The inspector can determine if the foundation is the right depth, among other things. If the foundation is not laid correctly, problems from settling, cracks, or improper drainage can appear during the life of the home.

* Pre-sheetrock The electrical, heating and air conditioning, and plumbing are put in place before any walls go up. Haynie says this may be the most important inspection for a home under construction. It allows the inspector to see how the building is put together before any major problems are hidden from view.

* Final walk-through This inspection is done with new and existing homes. If you had the first two inspections for your newly constructed home, your inspector can check that previously flagged problems have been repaired. For all homes, the major systems are evaluated, including the heating, central air conditioning, interior plumbing, and electrical systems; roof, attic, and visual insulation; walls, ceilings, floors, windows, and doors; and basement. Cosmetic imperfections are also noted for new homes.

HANDLING INSPECTION RESULTS

Haynie says no home--not even a brand new one--is perfect. Most home inspection findings are fixable, as was the case with the Joneses' home. "The only major things the inspector found had to do with some of the under-cabinet plumbing. There were also a few electrical switches that did not work," says Jones.

Sometimes problems become noticeable after sealing the deal, especially with newly constructed homes. "There were a few things we noticed once we had moved into the house," says Jones, "minor things that were related to small leaks that happened within 30 days [after closing] that the builder kind of took his time in fixing." Getting the builder to fix a shower that only spouted cold water took two months.

This is one example of why it is best to find as many defects as possible before closing. Builders are notorious for being less responsive to complaints after they've received their money. And in many cases, they aren't responsible for cosmetic fixes or those they deem minor after you sign off on the final walk-through.

With Phillips' older home, there were a number of defects, which she expected. "With any older home, you're going to find more things that are wrong," she says. "A lot of times they've done updates, and the updates may not have been done correctly."

The inspection revealed a need for major repairs, such as a new roof and several electrical defects. Phillips negotiated a deduction of the cost of a new roof from the sale price of the home and had the seller fix the electrical work before closing. "After the home inspection, I knew even with the faults that I would still want the home. It just gave me more power to negotiate the price," she says.

A few final words of advice: You should make an effort to be at the inspection to help point out problems and ask questions. Try to bring another homeowner with you to help. The more eyes, the better. If you have a brand-new home, the cosmetic items should be as close to perfect as possible, so don't be afraid to nitpick.

"People need to understand that you're the one spending all of this money for the house," says Jones. "If you're not happy, then walk away."

Home Inspection Checklist To have your home inspection done correctly:

Interview inspectors. Be sure to determine how long he or she has been doing inspections, the quality of training, and whether he or she is certified. You should also opt for an inspector who issues written reports and, if possible, choose one that has errors and omissions insurance (comparable to medical malpractice insurance, which covers the buyer if there is an expensive mishap the inspector overlooks). Check with the American Society of Home Inspectors (www.ashi.org) and the National Association of Home Inspectors (www.nahi.org).

Take a virtual walk-through first. Learn what to expect by taking ASHI's Virtual Home Inspection Tour (www.ashi.org/customers/vhi_tour.asp). Using a model home to illustrate, the tour covers the major areas of an inspection and explains some of the most commonly found problems.

Stock a personal inspection toolbox. Any time you go to view a home, it is a good idea to take along a powerful flashlight, a pad to write down important observations, a camera to take pictures of suspicious findings, and a circuit tester to test all electrical outlets.