What DP Inspections Are and How They Work in South Carolina

DP inspections check the structural and mechanical systems of a home before you buy or refinance

A DP inspection is a detailed examination of a property's condition, ordered by a lender before approving a mortgage or refinance. The "DP" stands for "Due Diligence Property," and the inspection protects the lender by documenting what shape the house is actually in. Unlike a standard home inspection that a buyer orders for their own protection, a DP inspection is required by the lender and the report goes to them first.

In South Carolina, DP inspections are most common in refinance transactions and certain purchase scenarios where the lender wants independent verification of the property's value and condition. The inspector walks through the home, checks the roof, foundation, HVAC system, plumbing, electrical systems, and other major components, then produces a report that flags any significant problems. If major defects are found, the lender may require repairs before closing, or may adjust the loan amount based on the property's actual condition.

The cost of a DP inspection varies but typically ranges from a few hundred dollars, and in South Carolina it is usually paid by the borrower, though some lenders cover it. The inspection must be completed by a licensed inspector, and the timeline is usually tight—often within 7 to 10 days of the order.

Key Takeaways

• DP inspections are ordered by your lender, not by you, and the report is delivered to the lender to assess the property's condition before approving your loan.
• The inspection covers structural elements, roof condition, HVAC, plumbing, electrical systems, and other major components that affect the home's value and safety.
• If the inspection uncovers significant damage or defects, your lender may require repairs, a price reduction, or a lower loan amount before closing.
• South Carolina requires the inspector to be licensed, and the inspection must typically be completed within one to two weeks of the order date.
• You will receive a copy of the DP inspection report, which you can use to negotiate repairs or understand what work the home may need after purchase.

When a lender orders a DP inspection

Lenders order DP inspections most often during refinances, particularly cash-out refinances where the borrower is taking money out of the home's equity. The lender wants to confirm that the property value supports the new loan amount. A DP inspection is also common in purchase transactions where the property is older, has been vacant, or shows signs of deferred maintenance in the initial appraisal.

Some lenders make DP inspections routine for all loans over a certain amount, while others order them only when red flags appear in the appraisal or title search. If your lender orders one, you will receive notice in writing, usually with a deadline and the name of the inspection company they have contracted. You do not choose the inspector—the lender does—but you have the right to be present during the inspection and to receive a copy of the final report.

What the inspector examines

A DP inspection is more thorough than a basic walk-through. The inspector checks the roof for leaks, missing shingles, or structural damage; examines the foundation for cracks or settling; tests HVAC systems to confirm they operate; inspects plumbing for leaks or code violations; and evaluates the electrical panel and wiring. They also look at the exterior for water damage, the attic for ventilation and insulation, and any visible signs of pest damage or mold.

The inspector documents everything with photos and notes, paying special attention to anything that could affect the home's safety, value, or the lender's security interest. They are not looking for cosmetic issues—a worn paint job or outdated fixtures do not matter—but structural problems, system failures, and code violations do. The report will note whether items are in good condition, fair condition, poor condition, or need immediate attention.

How the report affects your loan

Once the inspection is complete, the report goes to your lender. If the home is in good condition and no major issues are found, the inspection clears the way to closing. If problems are discovered, your lender has several options: they may require the seller to make repairs before closing, may ask for a credit at closing to cover the cost of repairs you will make yourself, may lower the loan amount to account for the reduced property value, or may decline to lend on the property at all.

In South Carolina, the lender's requirements are binding—you cannot close without satisfying them. If the inspection reveals a roof that needs replacement or a foundation crack that requires professional evaluation, your lender will not approve the loan until those issues are addressed or the price is adjusted. This is why the DP inspection timeline matters: if repairs are needed, you need time to get quotes, schedule work, and have it inspected again before your closing date.

Your rights and responsibilities during the inspection

You have the right to be present when the inspector is at the property, and you should be. This gives you a chance to ask questions, point out any recent repairs you have made, and understand what the inspector is looking at. You will receive a copy of the final report, which you can use to plan repairs or negotiate with the seller if you are in a purchase transaction.

You are responsible for making sure the property is accessible—the inspector needs to get into the attic, basement, crawl space, and all mechanical areas. If the home is occupied by a tenant or the previous owner, you may need to coordinate access in advance. You are also responsible for paying the inspection fee unless your lender has agreed to cover it, which is rare in South Carolina.

How DP inspections differ from appraisals and standard home inspections

A DP inspection is not the same as an appraisal, though both are ordered by the lender. An appraisal estimates the home's market value by comparing it to similar homes that have sold recently. A DP inspection documents the physical condition of the property. A home can appraise for full value but still fail a DP inspection if it has structural problems.

A standard home inspection, which a buyer typically orders on their own, is similar to a DP inspection in scope but serves a different purpose. The buyer's inspector works for the buyer and the report is confidential. A DP inspector works for the lender, and the lender controls what happens with the findings. If you are buying a home and your lender orders a DP inspection, you may still want to order your own home inspection as well, because the DP report is focused on the lender's concerns, not necessarily on everything you need to know as the owner.

What to do if the DP inspection finds problems

If the inspection uncovers issues, do not panic—many homes have minor problems that are easily fixed. Ask your lender for a copy of the report and a list of what must be addressed before closing. Get quotes from contractors for any repairs the lender requires. In a purchase transaction, you can ask the seller to make the repairs or offer a credit; in a refinance, you will be responsible for any repairs needed.

If the lender requires a second inspection after repairs are made, budget time for that in your closing timeline. Some lenders will clear minor issues with a contractor's invoice and receipt; others want photographic proof or a follow-up inspection. Ask your lender what documentation they need before the work begins, so you do not waste time or money on repairs that do not meet their requirements.

Frequently Asked Questions

Can I choose my own DP inspector?

No. Your lender selects the inspection company and the inspector. You cannot hire your own DP inspector, but you can hire a separate home inspector to conduct your own inspection if you want a second opinion or additional detail.

What happens if I do not fix the problems the DP inspection finds?

Your lender will not approve the loan until the issues are resolved or the loan amount is reduced to account for the property's condition. You cannot close without satisfying the lender's requirements, so repairs or a price adjustment is necessary.

How long does a DP inspection take?

The inspection itself usually takes two to four hours, depending on the home's size and condition. The full report is typically delivered within three to five business days. Your lender will give you a deadline for completion, usually one to two weeks from the order date.

Do I have to pay for the DP inspection?

In most South Carolina transactions, the borrower pays the inspection fee, which varies by lender and inspector but is typically a few hundred dollars. Some lenders cover the cost, so ask your loan officer before assuming you will pay.

Can the DP inspection kill the deal?

Yes, if the inspection reveals major structural problems or safety hazards that are too expensive to fix, your lender may decline to lend on the property. This is rare, but it can happen. That is why it is important to understand what the lender requires before you commit to a purchase or refinance.