Have the House Inspected
and get the inspection report

After you've signed the contract and paid the earnest money, you'll hire a professional inspection company to thoroughly examine all the house's structural systems and give you a written report detailing any problems found. This will cost $300+ depending on the size of the home, and you'll pay up front.

Choose a well-reviewed inspector, consulting sources like Yelp or AngiesList.  Do not use an inspector suggested by your lender or real estate agent.  Some unscrupulous lenders and agents pick inspectors who aren't very thorough; if the inspector "misses" real problems with the house, you're more likely to buy it and the bank is more likely to lend money for it.  So, pick your own inspector.

The inspection takes at least an hour, and you should attend so the inspector can show and explain problems to you that might be harder to understand if the only info you got was from the written report.  Here's a website which lists the estimated costs of fixing various problems found in an inspection.

You'll also pay a pest control company to do a termite inspection ($75+), although the compay handling your general inspection might also be licensed to do a termite inspection. (Ask.)  Besides the fact that a termite inspection is a good idea, your lender requires it—they don't want to loan money on a home that's rotting away.  If termites are found, don't freak out about it—they're easy to get rid of, though the treatment is pricey: $700+.  First figure out who will pay for it (you or the seller), and what pest company to use.  Pick one that uses a modern, safe termiticide like Altriset, which is so safe it doesn't even require an EPA signal word on the label (i.e. Caution, Warning, or Danger), and workers don't have to wear gloves or masks when applying it.  (Prior to Altriset's debut in 2010, Termidor was the less-toxic termiticide of choice, but Altriset is even safer.)  In Austin, I advise against "Chem-Free Organic", since despite their eco-sounding name, they're really just ABC Pest Control with another set of letterhead and another Yellow Pages listing.  You call ChemFree, and the ABC Pest Control truck shows up, and the methods and chemicals are no different than if you'd called ABC's number, as I found out when I called "Chem-Free".

If the home is more than 30 years old, you'd also do well to hire a plumber to do a hydrostatic test to check for leaks in the drain (sewer) line (~$100), and possibly to run a camera through the drain line (~$300).  That's because a regular inspection can't find leaks in the drain line, drain line leaks can ruin your foundation, and drain line leaks are expensive to repair ($3000 to $25,000).  Old cast iron drain lines often last between 30 to 50 years (though occasionally up to 100), and if the one in your new home is at or near the end of its useful life, you need to know so you can negotiate for a lower price and/or budget for repairs.  An old cast iron drainline is typically replaced, not repaired, because if it's leaking in one place now, there's a good chance it'll start leaking in other places later.  Replacing the whole line typically means either jackhammering up the slab in the home or digging trenches under the house with backhoes.  Some newer "trenchless" replacement methods are becoming more popular, but while they preserve your slab and your yard, they're often not much cheaper, if at all.  Finally, remember that neither a hydrostatic test nor a camera run can tell you how thin the drain pipes have become, so even if there are no leaks now, you could still be facing some leaks in thefuture.

If you're paying cash for the house (not getting a mortgage), this is also a good time to order a survey, which is having a surveyor draw the boundaries of the property (the property lines).  This ensures that the property doesn't violate any local codes for things like how far back the house has to be from the street.  If you have a lender they'll order one for you, but if you're paying cash you'll need to order it yourself, or ask the title company to order one for you (for which you'll still pay).  Surveys run around $350.  Similarly, cash buyers are well-advised to order an appraisal to make sure the home is really worth as much as they're planning to pay for it.

Amount spent so far.   Red items apply towards the purchase. Amounts are typical, not exact.


Credit Check

To the Lender


Option Fee

Paid to the Seller. Might apply towards purchase, depending on contract. Allows you to walk away for any reason.


Earnest Money

Held in Escrow, probably by the Title company



To private inspection company to find physical problems with house


Termite inspection

To private company; required by your lender


Termite treament

(If necessary)

$1690 - $2390


Last update:  February 2014

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