Indeed, more than 40 percent of the previously owned homes on the market have at least one serious defect, according to HouseMaster, a major home inspection company with offices in more than 390 cities in the United States and Canada.

Drawing from their own findings from more than one million home inspections, HouseMaster says the most serious home defects to be on the lookout for are:
  1. Cracked heater exchange
  2. Failing air-conditioning compressor
  3. Environmental hazards including radon, water contamination, asbestos, lead paint.
  4. Moisture in the basement
  5. Defective roofing and/or flashings
  6. Insect infestation -- termites or carpenter ants
  7. Mixed plumbing
  8. Aluminum wiring
  9. Horizontal foundation cracks
  10. Major house settlement
  11. Undersized electrical system
  12. Chimney settling or separation
Kuhn says most of these problems can be repaired. However, depending on the specific problem, the cost can be substantial, particularly if the defect involves one of the major systems. The cost could become a factor in whether you ultimately buy the house.
 
If repairs are needed, there are several ways to proceed if you still want to buy the house, the Dummies book advises.
  • The sellers can leave enough money in escrow to cover the cost of repairs, with instructions for the escrow officer to pay the contractors as the work is completed.
  • The lender can withhold part of the full loan amount in a passbook savings account until the work has been done.
  • The sellers may give a credit for the work. Lenders may disapprove of this last alternative because there aren't assurances that the repairs will be made.
A home inspection usually costs between $250 and $400. Hire a qualified inspector. Try to get referrals from friends or anyone you know who has had a satisfactory experience with a home inspector. Also, look for affiliations with organizations like the American Society of Home Inspectors or the American Association of Home Inspectors. Both groups require its members to be certified, meet professional qualifications, and adhere to specific business ethics.
 
Once you make an appointment with a home inspector, it's important to be there. "A pre-purchase inspection is your best protection against buying a home based more on emotions, rather than as a sound investment."