Home Inspections and Due Diligence When Buying a Home in California

A home inspection is one of the most important parts of buying a home in California.

But I tell buyers something important:

The general home inspection is the starting point — not the entire due-diligence process.

The goal is to understand what you are buying before you remove your contractual protections and complete the purchase.

Depending on the property, due diligence may involve the physical condition of the house, seller disclosures, prior inspection reports, insurance, permits, title, HOA documents, roof, sewer, pest damage, drainage, solar, wells, septic systems, and other property-specific issues.

The right investigations for a newer Roseville subdivision home may be very different from those for a 70-year-old Sacramento home or acreage in Loomis, Penryn, Newcastle, or Shingle Springs.

Quick Answer: What Should a Buyer Do First?

My preferred sequence is:

1. Review the seller's disclosures
2. Review any inspection reports already provided by the seller
3. Identify known concerns before scheduling the buyer's inspections
4. Give relevant prior reports to the buyer's inspector
5. Complete the general home inspection
6. Follow up with appropriate specialists when needed
7. Obtain estimates or additional information when important
8. Make sure the investigation is complete before removing the buyer's contingency

If important follow-up inspections cannot be completed within the existing contingency period, the buyer may need to request an extension of that period.

Do not assume additional time is automatic. Any extension should be handled through the purchase agreement and documented appropriately.

Review the Seller's Disclosures and Prior Reports Before Scheduling Inspections

This is one of the most important parts of my inspection process.

When seller disclosures, pest reports, roof inspections, home inspections, repair invoices, or other reports are already available, I want the buyer to review those documents before the buyer's own inspections whenever practical.

That information can help us determine what the buyer should investigate. It can also make the buyer's inspection more productive.

For example, suppose the seller completed a pest inspection shortly before listing the property and that report identifies areas of dry rot.

I want the buyer's home inspector to have that information. The inspector can then pay particular attention to:

• The areas identified in the prior report
• Possible moisture sources
• Related structural components
• Adjacent siding, trim, framing, or roof conditions
• Whether additional specialist evaluation may be appropriate

The same principle applies if a prior report identifies roof leakage, electrical concerns, plumbing problems, foundation cracking, drainage problems, HVAC deficiencies, water intrusion, sewer issues, or previous repairs.

A prior inspection report is not necessarily a substitute for the buyer's own inspection. But the information can be extremely valuable.

I would rather have the buyer's inspector begin the inspection already knowing what previous professionals and the seller have identified.

Compare Three Sources of Information

I want buyers comparing:

What did the seller disclose?

What did prior inspectors report?

What does the buyer's inspector observe?

If the information appears consistent, that can help the buyer understand the property. If the information conflicts, that may be even more important.

For example: the seller may disclose a prior roof leak but say the roof was repaired. A seller-provided inspection may still identify staining. The buyer's inspector may then observe moisture or additional roof concerns.

That does not automatically tell us the answer. It tells us that further investigation may be appropriate.

California DRE advises buyers to carefully review disclosures and to request additional inspections or investigate permits and records when questions remain.

Start With the General Home Inspection

A general home inspector evaluates the visible and accessible components of the property.

The inspection commonly includes observations involving:

• Roof
• Foundation
• Plumbing
• Electrical system
• Heating and cooling
• Water heater
• Attic
• Crawlspace when accessible
• Windows and doors
• Appliances
• Drainage
• Exterior
• Interior components

A general inspection can identify concerns that deserve further investigation. But the general inspector is usually not the final expert on every system. If the inspector identifies something significant, the next step may be a specialist.

A Home Inspector Is Often the Starting Point for Specialists

Suppose the inspection report identifies:

Possible roof deterioration — that may lead to a roof inspection.

Electrical concerns — that may justify evaluation by a licensed electrician.

Foundation movement or structural cracking — that may require a structural engineer or qualified foundation professional.

Evidence of moisture or plumbing leakage — that may lead to additional plumbing or moisture investigation.

HVAC equipment near the end of its expected service life — the buyer may want an HVAC specialist to evaluate the system.

The important principle is: do not ignore a significant recommendation for further evaluation simply because the general inspector could not determine the full extent of the issue.

Do Not Remove the Investigation Contingency Before the Follow-Up Work Is Complete

Sometimes the general inspection raises a question that cannot be answered immediately.

Perhaps the buyer needs a roofer, electrician, structural engineer, plumber, HVAC contractor, pest company, sewer specialist, septic company, well specialist, pool professional, or another qualified specialist.

Scheduling those professionals can take time. The buyer may also need time to receive a written report or repair estimate.

If an important issue is still being investigated as the contingency deadline approaches, the buyer should discuss the situation with the buyer's agent before removing the contingency.

The buyer may need to request an extension of the investigation contingency period.

An extension is not automatic. Contractual time periods generally need to be extended or modified by mutual written agreement between the buyer and seller. The seller may agree to additional time, decline the request, or negotiate different terms.

That is why inspections should be scheduled early. Waiting until the final day of the investigation period to discover that a structural engineer cannot visit the property for another week puts the buyer in a difficult position.

The Investigation Contingency Is One of the Buyer's Safeties

I explain the investigation contingency as one of the buyer's important safeties.

Depending on the contract, the buyer may have the opportunity to investigate far more than the basic physical condition of the home. Due diligence may include property condition, building systems, square footage, permits, zoning, insurance, neighborhood conditions, easements, utilities, environmental conditions, and other matters affecting the buyer's use or ownership of the property.

C.A.R.'s public guidance describes the investigation contingency as broad and recommends completing investigations early enough to allow buyers to make informed decisions.

Before removing that contingency, I want the buyer to understand:

• What have we investigated?
• What remains unanswered?
• Has a specialist recommended additional investigation?
• Are we comfortable moving forward with what we now know?

Which Specialty Inspections Should You Consider?

Not every property requires every specialty inspection. The property itself should guide the process.

Pest and Wood-Destroying Organisms

A pest inspection can identify conditions involving termites, dry rot, fungus, moisture damage, and other wood-destroying organisms.

If the seller already has a recent pest report, review that report before the buyer's inspection and provide the relevant information to the buyer's inspector. Known dry rot, moisture damage, or Section 1 conditions may help identify areas that deserve additional attention.

Roof

A general inspector may identify roof concerns but recommend evaluation by a roofing professional. Important questions can include approximate remaining life, active leaks, prior repairs, flashing, drainage, and evidence of deterioration.

If the seller has a prior roof report, repair invoice, or warranty, review that information as part of the investigation.

Sewer

Older homes may warrant a sewer-line camera inspection. A sewer inspection can sometimes identify root intrusion, cracks, offsets, blockages, deteriorated pipe, and other problems between the home and sewer connection.

HVAC

Heating and cooling systems can represent significant replacement costs. If an inspector identifies concerns — or if equipment is older — the buyer may want a qualified HVAC contractor to evaluate operation and condition.

Electrical

Older homes may contain electrical systems that deserve additional evaluation. Concerns can involve panels, wiring, grounding, improper modifications, safety issues, and capacity.

Plumbing

Additional plumbing investigation may be appropriate when there are signs of leakage, low pressure, corrosion, older piping, drain problems, or water damage.

Foundation and Structure

Cracks do not automatically mean a house has a serious structural problem. But significant movement, settlement, unusual cracking, sloping floors, or other concerns may justify evaluation by an appropriate structural professional.

Pool and Spa

A pool can involve expensive equipment and structural components. A specialized pool inspection may evaluate pumps, filters, heaters, electrical equipment, surface condition, leakage, and other pool systems.

Chimney and Fireplace

Older fireplaces and chimneys may warrant specialist evaluation, particularly if the general inspection raises concerns.

Rural and Acreage Properties Require Additional Due Diligence

Buying acreage is not simply buying a house with a bigger yard.

Properties in Loomis, Penryn, Newcastle, Auburn, Shingle Springs, and other rural or foothill communities may require investigation of systems that a subdivision buyer never needs to consider.

These can include private wells, septic systems, water production and quality, well equipment, septic location and condition, private roads, road-maintenance agreements, easements, fencing, outbuildings, drainage, topography, fire-insurance availability, property boundaries, land use, and permits.

A separate Buyer Resource guide will cover buying a home with acreage in Placer County in more detail.

Do Not Ignore Drainage and Water

Water can create some of the most expensive property problems.

Look carefully at grading, gutters, downspouts, standing water, crawlspace moisture, water stains, retaining walls, hillside drainage, and evidence of prior leaks.

A dry inspection day does not necessarily tell you how the property behaves during a major winter storm. Seller disclosures, prior reports, visible staining, drainage design, and additional specialist opinions may all be relevant.

Investigate Permits When Something Raises a Question

Homes are frequently remodeled. Buyers may see converted garages, added bedrooms, enclosed patios, ADUs, room additions, electrical upgrades, major renovations, pools, and outbuildings.

Do not automatically assume every improvement was permitted. If permits or legality are important to the buyer, investigate.

California DRE advises consumers who have questions about a property or disclosures to ask clarifying questions, request additional inspections, and review permit or agency records when appropriate.

Insurance Is Part of Due Diligence

Homeowners insurance should be investigated early. Do not wait until the final days of escrow.

Insurance availability and cost can be affected by location, fire exposure, property age, roof condition, electrical systems, claims history, property type, rural location, and other underwriting factors.

This can be particularly important in foothill and rural portions of Placer and El Dorado counties.

The question is not only: "Can I insure this house?"

Also ask: "What will this insurance cost me?"

That number affects the buyer's real monthly housing expense.

HOA Documents Are Due Diligence Too

When buying a condominium, townhouse, or property in a common-interest development, due diligence extends beyond the walls of the home.

Buyers should review available HOA documents, which can include CC&Rs, rules and regulations, financial statements, reserve information, meeting minutes, assessments, architectural restrictions, parking rules, pet restrictions, and other use restrictions.

A beautifully maintained home can still come with HOA restrictions or financial obligations that materially affect the buyer.

Natural Hazards and Property Location Matter

California real estate transactions can include natural-hazard disclosures involving matters such as flood zones, fire-hazard areas, earthquake fault zones, and seismic-hazard zones.

These disclosures do not mean a property should or should not be purchased. They provide information the buyer should understand when evaluating insurance, risk, property use, and long-term ownership.

What Do You Do After the Inspections?

An inspection report almost always contains a long list of observations. That does not mean every item should become a demand to the seller.

I help buyers separate major concerns from normal homeownership and maintenance items.

The issues I generally pay the most attention to involve health and safety, structural conditions, active water intrusion, significant roof problems, major electrical concerns, major plumbing concerns, HVAC failure, pest or dry-rot damage, sewer problems, and expensive systems or repairs.

A used home will almost never be perfect. The inspection process should help the buyer understand what they are buying — not turn every cosmetic item into a negotiation.

Repair, Credit, Price Adjustment — or Accept the Property?

When significant issues are discovered, several approaches may be possible depending on the contract and circumstances.

A buyer might ask the seller to make repairs, request a credit toward allowable costs, negotiate a price adjustment, accept the property in its current condition, conduct further investigation, or exercise applicable contractual rights if the findings are unacceptable.

There is no single correct strategy. I generally prefer to focus negotiations on issues that materially matter rather than sending the seller a long list of minor requests.

A buyer may also prefer a credit rather than having the seller choose the contractor and control a repair, depending on the problem and financing rules.

The right approach depends on the repair, cost, buyer preference, seller motivation, market conditions, financing, and contract terms.

Do Not Wait Until the Last Day

Inspection periods can move quickly. The buyer may need time to review disclosures, review seller-provided reports, conduct the general inspection, schedule specialists, review specialist reports, obtain estimates, research permits, investigate insurance, discuss findings, negotiate repairs, credits, or price, and request an extension if more time is genuinely needed.

That is why I prefer to begin this process immediately after offer acceptance.

If a specialist cannot complete an important evaluation before the existing contingency deadline, address the time issue before the deadline arrives. Do not remove the buyer's safety simply because the calendar is running out.

The Final Walkthrough Is Not a Replacement for Inspections

The final walkthrough usually occurs shortly before closing. Its purpose is generally to verify that the property remains in the expected condition and that agreed work has been completed when applicable.

The final walkthrough should not be treated as the buyer's first serious inspection of the property. Due diligence should happen earlier while the buyer still has the applicable contractual protections.

Frank's Buyer Perspective

Review What Already Exists First. Before sending the buyer's inspector to the property, review the seller disclosures and any recent seller-provided inspections. If a prior report identifies dry rot, roof damage, moisture, electrical concerns, or another problem, give that information to the buyer's inspector. Let the buyer's inspection build on information that is already available.

Start Broad. Use the general home inspection to evaluate the property as a whole.

Follow the Evidence. If disclosures, previous reports, or the buyer's inspector identify a concern, bring in the appropriate specialist.

Give the Investigation Enough Time. If meaningful follow-up work is still incomplete, do not simply remove the investigation contingency because the deadline is approaching. Discuss whether additional time should be requested. Any extension must be properly agreed to and documented.

Focus on What Matters. Do not confuse a long inspection report with a bad house. Older homes will have maintenance items. The important question is: "Are there significant problems that affect safety, value, insurability, future costs, or my willingness to own the property?"

Understand Before You Remove Your Safeties. I explain contingencies as the buyer's safeties. Before removing an investigation contingency, I want the buyer comfortable that the important questions have been answered. The goal is not to find a perfect house. The goal is to know what you are buying.