'Home inspection' is a general umbrella that covers a whole range of inspections a potential buyer could have on a property. When we talk about a home inspection period, it is a number of days written into the contract that give you time to do your due diligence. Your inspection contingency gives you the right to have the property thoroughly inspected and if you discover something that is too big of a problem, you can cancel the purchase and have your deposit returned. The clause actually gives the buyer cancellation rights for any or no reason. Kind of an escape parachute clause.
The most common inspections are a general home and a pest inspection. Most buyers will start with a general home inspections and then, if circumstances dictate, go on and order specialist inspections before the end of their inspection period. The general home inspection serves the basic purpose of educating buyers about the overall condition of the building. While the inspector will go into the crawlspace and attic, nothing invasive is usually done. In some cases, the sellers will have already paid for and will provide the inspection report as part of their disclosure materials. Other times, the buyer will pay for an inspection and get a report for their use only. In either case, an objective licensed home inspector will walk the property noting and examining various defects he or she sees.
The general contractor inspection report may call for additional inspections by tradespeople such as roofers or chimneys for specific areas that require work. By law, home inspectors do not give bids for repairs but may give estimates.
Inspection reports can also serve as the basis of negotiation (this varies greatly depending on what the market is like). Repairs can always be performed after escrow closes as it's rare that a seller will do the work for you. If either the general or specialist investigations are not ordered during this time, then buyers will assume the risk that there are certain unreported deficiencies. If these types of deficiencies are discovered after the inspection contingency is removed, or after escrow closes, there’s little recourse against the sellers unless there was active concealment or fraud.
In a competitive bidding situation or if the property is a fixer many people will waive their inspection rights to give sellers the certainty that the buyers are committed fully to the property. As brokers, we will always advise you to investigate and inspect to your satisfaction. While this assumes a lot of risks, many times sellers will prepare inspection reports from the same folks buyers would use to disclose the property's condition to would-be buyers. While objective, some may still want to conduct their own investigation. While inspections aren't cheap ($600+), one way to be competitive and yet still diligent is to conduct a pre-offer inspection.