There are several reasons why a Buyer should do a 4-point inspection:
It may be required to obtain homeowner insurance
In Florida, insurance companies are currently requiring a 4-pt. report for any home that is 20+ yrs. old. And, if you are taking out a mortgage with a lender require homeowner insurance to protect their interest in the property and money loaned.
Identify potential issues:
A 4-point inspection focuses on four key areas of a property: Roof, plumbing, HVAC and electrical systems. By thoroughly assessing these major systems, existing or potential future issues can be identified upfront for negotiation and/or proper financial and maintenance planning. This proactive approach help you avoid unexpected and more costly repairs down the line.
Negotiating power:
If the 4-point inspection reveals any significant issues, this is an opportunity to negotiate a credit from the seller at closing, a reduction in purchase price or required repairs to be completed by the sellers prior to closing on the home purchase. Some benefits of this:
- Ensures that you are getting a fair price for the property
- Avoids you bearing the cost of repairs/maintenance that should have been done by the previous owner
Special note on roofs in Florida –
- Most insurance companies in Florida will not write a homeowner insurance policy on a roof that has less than 3-5 years remaining life.
- The 4-pt. inspection report is the report that states the remaining useful life of the roof. If it is less than 3-5 years, this is definitely an opportunity to negotiate and this is a big ticket item (avg. of $10K-100K, depending on the size of the roof and type of roof).
- There is only one company that will write a policy for a roof with less than 3-5 yrs. remaining life but there are strict requirements and we guide our clients through this process.
Lower insurance premiums:
By conducting this inspection and addressing any issues that could affect the property’s safety or structural integrity, you can potentially reduce your insurance premiums by thousands of dollars per year. This can result in huge long-term savings on insurance costs – especially if the roof is less than 10 years old (in Florida) and meets certain code and insurance company requirements.
Summary
In summary, a 4-point inspection can meet the lender requirement for homeowner insurance, save you money by identifying potential issues, give you negotiating power during the purchasing process, and potentially reducing your insurance premiums. It is a valuable tool for buyers looking to identify the current condition for all of the above reasons and more.
Are you or any of your family/friends thinking of selling or buying a home? We are experts and have hundreds of transactions under our belts! A little about us:
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- Stacy Kitchell, Broker – Recovering Real Estate Financial Analyst, BS in Finance – Indiana Univ. Kelley School of Business. Stacy’s LinkedIn Profile
- About our Team – https://www.kitchellgroup.com/our-agents/
- #1 Realtor Team on Angi.com and consecutive winner of the Angi Super Service Award since 2012! Check out our reviews!
- Get to know us on YouTube! – For informative videos about all things real estate and more, visit our YouTube channel and subscribe to stay up to date on the market, homeowner tips, etc.
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