On Second Thought- A Home Inspection

The moment an accepted offer is confirmed, there will be many decisions and thoughts that will go through a first-time home buyer's mind.  One of those thoughts will be on the inspection.  Well, hopefully the inspection.  I hesitated briefly, because there have been instances in which a buyer has opted out of an inspection.  For the experienced real estate professional, there are just too many things that can go wrong if an inspection isn't done by a home buyer.  Suffice it to say, even with an inspection, something can happen that is outside the scope of a home inspection.  So, for buyers, if you are thinking about not conducting an inspection, just because you want to save some money (estimated costs: $275-$500 your situation may vary),  it's important to understand three things about an inspection and why it is necessary. 

1.  Once a purchaser has signed on the dotted line at closing for the property, something can go wrong, it could happen not because it was necessarily negligence, intent, or ghosts.  Well, maybe ghosts, but I wouldn't repeat that.  As a matter of fact, just forget the ghost part. 
2.  During an inspection, any ad everything is going to get discovered.  From missing screws, rattle pipes, holes in walls, roofs with small leaks, and floors that are weakened, cracked or sunken.  It doesn't mean that the house is a dump as I suggested in a earlier blog :(http://makeyourbestoffer.blogspot.com/2012/11/your-house-is-dump-2012-by-wayne-d.html).  It means that unless the house is absolutely new (there are exceptions), there will be something wrong.
3.  An inspection that reveals problems in a home does not necessarily sound a death nil.  But, whatever an inspection may reveal prior to closing, there should be a sense of relief for a potential homebuyer, knowing something about the house that, while not perfect, is not ready to be torn down, or walk away from.

These three reasons are not all that there is to the home inspection.  But with this knowledge, a homebuyer can sort out in their mind their next step, based on the options that are available to them.  Here are some of those options:
1.  Walk away from the home-  Sometimes the so-called perfect home has too many problems.  While seemingly small to most buyers, to some other buyers, an estimate of $1000.00 in repairs is simply out of the question.  So, walk away, get your deposit back and continue searching for "the perfect home".
2.  Ask the sellers to make certain needed repairs. If they refuse, ask them to pay a portion of the needed repairs, reduce the price of the home, or provide a cash reimbursement at closing, where allowable by lender, if applicable.  If neither of these options seem to be agreeable, ask the seller to reduce the price of the home by an amount suitable to covering the repairs.
3.  Take the house as is.  Having completed the inspection of the home, knowing what you come to know about the problems the house has, you could just take it as is, and ask for nothing from the seller. 

In conclusion:  Whatever you decide after an inspection is worth the peace of mind compared to choosing to buy a home without an inspection.  The long term consequences for such a failure will have you kicking yourself for sometime to come.  It is my hope that you never have to do that, and that you will give getting an inspection on every home you buy, a second thought before you decide against doing so. 

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THE HOME BUYING PROCESS-WHAT SHOULD YOU ASK? (C) 2012 by Wayne D. Lewis, Sr.

The Home Buying Process- What to Ask? © 2012 by Wayne D. Lewis, Sr.

 

How many steps are there to buying a home? I don’t think that many of us as Realtors ever counted how many steps there are, but it is a process that is made up of a tremendous number of components that are all working together to help Buyers and Sellers to successfully get to the closing table.  The Home Buying process probably has features that are more ominous to a buyer who is financing the purchase of a home compared to someone who is buying a home for cash.  In the same fashion, buying a home using an FHA Loan compared to a Conventional Loan presents a different set of dynamics.  Unfortunately, a buyer learns much of the home buying process usually as an on the job training event.   If buyers are lucky, they are able to attend a Home Buyer’s Training Class in their area, where they can get an upper hand on a lot of the information needed to know that usually comes to them on a seemingly as need to know basis.

 http://homebuying.about.com/od/buyingahome/qt/121907_buy-path.htm

If a buyer is not able to attend a home buyer’s training class, they should not feel compelled to accept everything that each member of the home buying process tells them.  They should have questions.  They should ask questions.  And, they should be given an answer to all of their questions- that is, a satisfactory answer to all of their questions.  Hopefully, the home buyer arrives at a reasonable understanding of the process that they are involved in well before they sign closing papers, perceivably because of the answers that they receive.

Obviously, when a buyer gets a lot of information in buying a home, the information itself can be overwhelming, and for the buyer, the desire to buy a home may sometimes becomes a distant dream.  A lot of that information may end up being broken down by brief canned explanations followed by “initial here!” or “sign here!”  It’s not fair to the buyer, nor the seller, for that matter.  For some buyers, the process may appear to be designed against them in buying a house, and an opportunity to walk away is usually not very far away.

 http://www.homebuyinginstitute.com/

            Fortunately, many buyers are able to regroup and are able to move forward with the aid of extremely competent real estate professionals, such as their Realtors, lenders, home inspectors, appraisers, insurance agents, title attorneys and personnel, as well as others who are involved in the home buying process. They are able to regroup and hopefully are able to take the information acquired to make their experience the best ever.  But, as Realtors, we must leave no stone unturned by ensuring that buyers are exposed to as many pieces of information as possible for buyers to access, at will, but not to the point of being overwhelmed.  How do we avoid overwhelming buyers?   One of the things we should always do is ask our buyers if they understand the information provided, or if they have any questions.

For some buyers, they are not sure what to ask.  They may think their questions are insulting, stupid, or they believe that their question is something that one of their professionals will eventually answer.  First of all, we should let our buyers know that there is no such thing as a stupid question.  We should also encourage them to ask whenever they have a concern.  But, for many buyers there maybe a question as to what to ask.  Some may not feel comfortable in knowing that it’s okay to ask a question when you first meet, before you part, or as the circumstances present themselves.  But in any event, buyers should not be afraid to ask questions, they should know or have an idea of what to ask.  To help to that end, I thought it would be helpful to provide some pertinent questions for the buyer.

 
I indicate that the questions below are pertinent, but not necessarily Germaine to each specific case.  Buyers should practice asking some of these questions to the various members of their team.  After all, each member will each be working hard to help  the buyer to get their new home.  There is no guarantee that by asking these questions, that a buyer will get the best answer, but the emphasis here is having an idea of the types of questions that a buyer can ask.  For example, under Preliminary Concerns, asking someone how much house can afford, afford, should net for you from your lender or Realtor, an overview of your debt to income ratio you should have, thus helping you to understand how much how you can afford.

http://realestate.findlaw.com/buying-a-home/home-buying-process/

 

Please review the questions below.  You may put together some of your own.  Some of these questions may not give you the answers that you want to hear, but there is no reason why a potential buyer cannot take information that either of the above professionals mentioned above provide, and move forward confidently in the purchase of their new home.

 

http://ezinearticles.com/?The-Home-Buying-Process,-Step-by-Step&id=2040881

 

Ø      Preliminary Concerns

o       How much home can I afford?

o       Is this a good time to buy a home?

o       Who can I trust to help me through this experience?

Ø      Finding a Real Estate Agent

o       How much experience do you have in real estate?

o       How well do you know the market around this area?

o       Have you ever been sued?

Ø      Choosing a Lender

o       How many deals have you closed this year?

o       How many years of experience do you have?

o       Are you going to run my credit?

Ø      House Hunting

o       Should I get an inspection and why?

o       Is the price of the house negotiable?

o       Is the seller willing to make repairs?

o       Is the seller willing to help with closing costs?

Ø      Making An Offer

o       How much should I offer to buy this house?

o       Is there such a thing as too low an offer?

o       What if the seller rejects my offer?

Ø      The Home Inspection

o       Do you recommend any home inspectors?

o       Does everything that the Inspector finds has to be repaired?

o       Does “As Is” mean “As Is”?

Ø      The Home Appraisal

o       What happens if the property is appraised higher than the sales price?

o       What happens if appraised amount is below the sales price?

Ø      Pre-Closing/Pre-Settlement

o       Who pays for the Title Attorney?

o       What if there is a cloud on the title?

o       What is a cloud on the title?

Ø      The Closing Process

o       When do I own the house?

o       What if I can’t be at the closing?

o       What does a Title company do?

 

            These questions should be taken generically.  Your situation may vary.  But, as a buyer you have the right to ask questions.  You, especially.  You are spending a tremendous amount of your hard earned money.  Buying a house should be a learning experience where you determine what it is you need to know.  Don’t be afraid to ask questions, and don’t be afraid of the answers.  You can only be greatly enlightened, provided you asked all of the right questions.  And since there is no such thing as a dumb question, you should be well informed on the purchase of your home.

 

 

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Five Urgent Reasons to Conduct an Open House © 2012 by Wayne D. Lewis, Sr.

If you are interested in putting your home on the market, you maybe dreading the part where your home is opened to strangers to see it, inside and out, and cast possible dispersions on your wonderful home.  Necessitate it to say, that an Open House may be a dreaded aspect of selling your home, but there maybe several reasons why it maybe necessary. 

http://makeyourbestoffer.blogspot.com/2012/10/do-disaster-impacted-homes-recover_4.html.

It is possible that your home may not need to be on public display, but that depends on some of the very same factors as to why should.  Let’s look at 5 reasons why your home should be featured to potential buyers in order to sell, especially if there is an urgency on your part to sell.

 http://nbcpolitics.nbcnews.com/_news/2012/12/02/15618202-geithner-urges-republican-leaders-to-offer-ideas-on-averting-fiscal-cliff?lite

1. The market is slow-There are a number of times when the market is slow in general.  Holidays, unusual market trends (interest rates, mass layoffs, or environmental factors (winter freezes, floods, etc).  Suggestions: A. Allow listing to expire; B.  Relist when the market improves or, C.  Lower the price

 

2. Your home’s price is higher than other homes in the area-While your agent may have given you an idea of how much your home could sell for, it’s possible that you may have opted for a higher amount, hoping to fall close to the suggested price.  By doing so, it’s possible that you have placed your home outside the scope of homes selling at the recommended price.  Even if your home is 3 to 5 % over that recommend amount, your home could sit on the market for awhile.  Suggestion: lower the price

http://www.heraldnet.com/article/20121202/NEWS02/712029898/1042

 

3. Your home is a cookie cutter house-If your house in a subdivision where there are at least 4 or 5 homes that all have a cute little wrap-around porch, painted in a Fawn-like color and double-car garage with a barn door design, chances are, buyers aren’t going to be moved one house over the other.  Buyers can easily be  convinced that each house that is similar in design has a similar floor plan.  Other factors that may count against you in such a subdivision if your home isn’t near the front entrance .  If  buyers see the 1^st house, they are practically convinced that the homes are very much alike.  Suggestions: Your home doesn’t have to be the highest price, work to make sure your home is closely priced if not lower than the other homes in your subdivision.

 

4. You want to sell your home quickly-For whatever reason that you may have an urgency to sell your home, an Open House is a must.  But your home cannot be priced above market value.  An Open House is an important part of your master plan to make sure that the price you set is practically too good to be true.  Suggestion: Just to be fair to potential buyers, allow them to see literally what is the bargan that is your home.

http://www.huffingtonpost.com/2012/12/02/grover-norquist-tea-party_n_2228610.html?ncid=edlinkusaolp00000009

 

5. There are a number of other homes on the market in your area.  Even if there are other homes on the market that do not exactly look like yours, or that aren’t even near your home, there is still an issue that must be addressed:  Price.  Location not withstanding, pricing your home below market is a sound indicator of your need to sell.  I often say, don’t give it away, but in order for your home to be in the running, it should be priced to sell.  With that said, make sure that anything in your home that you believe would make the house too easy to sell, such as chandeliers, expensive appliances, or freshly painted rooms, should not be  used to entice potential buyers only to take them off of the table.  Suggestion: Remove any items that may complicate the negotiations, or, do not perform any major repairs, unless contractually agreed upon.

An urgent sale could be the result of a job transfer, or a change in the family structure.  It could be for any number of reasons, short of a major disaster, in which case, you can read my blog Do Disaster Impacted Homes Recover their Value-

 http://www.huffingtonpost.com/2012/12/02/fiscal-cliff-gop-offer_n_2228615.html?ncid=edlinkusaolp00000009
 

Any urgency in the sale of a home requires doing all things necessary to make that sale necessary.  Do not under estimate the need to conduct an Open House.  That urgency should still reflect a home worthy of the price, in an area worthy of living, and worthy of the buyers investing their hard earned money.  Prepare your home for the next Open House and best wishes.

 

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