BUYING A HOME: Economics vs. Emotions

Included in the basic fee--which averages $250--is a full report, following the inspection. This summarizes the technical findings--in laymen's language--and makes recommendations, if requested, including the estimated cost of repairing any major deficiencies uncovered during the inspection. Most house inspection services can check for radon and termites and have the household water analyzed for an additional fee.

It is important to join the inspector on the inspection, not only to learn firsthand about any serious defects uncovered, but for helpful tips on operation and maintenance of all the systems in the house. (Be wary of any inspector who discourages you from coming along on the inspection.) For a first-time buyer, this often is the most enlightening experience, providing the first real "intimate" look at the house and well worth the two or more hours it generally takes. To select a home inspection company, it is best to use the following criteria:

* Choose an impartial company, meaning one that has no conflict of interest with the decision to purchase.

* Examine the company's past experience. For instance, how long has it been operating and how many inspections has it performed? Check with the Better Business Bureau for any complaints.

* Look into the firm's reputation and find out if its work is regarded as professional. One measure of this is if it carries the necessary insurance, including "errors and omissions." This is the equivalent of professional liability or malpractice insurance and only is affordable and available to those inspectors who have excellent track records. A reputable firm will carry general liability insurance and workers' compensation as well. Carrying the necessary insurance is an excellent indicator of a firm's professionalism.

* What kind of training do the firm's inspectors receive and how up-to-date are they kept? A national company with local offices, for example, has the resources to offer and maintain rigid training and qualifying procedures for inspectors.

* Determine if the firm is credible, meaning will it stand behind the inspection report by offering a written warranty? Ask around to see if others know of its work.

There will come a time when you will need to make a formal offer to purchase, based on the asking price (and the inspection, if it already has been done) in the form of a legal contract. This is the beginning of the negotiation stage of the house-buying process--often the most intimidating to the first-time buyer.

You and the seller must come to an agreement on the sale price, usually after some concessions by both parties, and generally with your realtor as the middleman. It is important to remember that, in most cases, the realtor legally is working for the seller, so the best advice is to keep your negotiating strategy to yourselves and don't reveal more than is necessary.

Many buyers at this point will have their attorney negotiate for them and prepare the contract once agreement has been reached. Most often, down payment is required at the time of contract signing. If the inspection is done after the contract is signed--there has to be a clause in the contract stating that the sale is contingent on a satisfactory inspection--any major deficiencies (as defined in the contract) will have to be negotiated as to who will pay for the repairs.