With a Competitive Market, More Buyers Are Skipping Home Inspections
It’s easy to get swept up in the excitement of buying a new home. It’s even easier to forget to make the important decision to have a home inspection once under contract. Or, something that is increasingly occurring, skipping home inspections altogether. This is done to be more competitive in bidding wars in this sellers market.
Home inspections are an instrumental part of the homebuying process. They can save you a lot of time and money in the long run. Which is why if you’re purchasing an “AS IS” property, you should request an “Information Only” inspection. This will help you be better prepared and able to plan for the future.
Also, remember that a home appraisal and a home inspection are not the same thing. Appraisals will not provide you with a detailed look at a property that can help uncover deep-rooted problems and potential pitfalls. Appraisal’s are also being waived to be more competitive.
First Time Homebuyers Left With Disaster Home After Skipping The Inspection.
Florida’s Tampa Bay ABC Action News shared the following story in 2017: First time home buyer Jacob Pinder’s experience after skipping the home inspection.
In the above report, Jacob describes the aftermath of skipping home inspections as devastating. Jacob & his fiancé Amy bought into the Zillow ad that touted the home as move-in ready and well maintained. But after moving in, Jacob explains how they discovered extensive damage behind walls and under the home’s outside trim. Now the couple is suffering the consequences for buying a home as-is without an inspection. They fear being homeless as there is no money for extensive repairs.
FIVE RESONS TO HAVE A HOME INSPECTION:
Don’t Judge a Home by Its Façade
Especially for those buying newer construction, a home inspection may feel like a waste of money. No matter the age of the home, there can be costly troubles unknown to the average buyer. Problems with wiring, plumbing or structural issues may not be visible during a showing. Even before you get to the interior, you can do your own preliminary inspection. Simply walk around the home’s exterior and look for these four potential problems:
Rotten / Damaged Siding;
Water Pooling Around the House;
Broken Gutters; &,
Peeling Paint.
Save Money
Home inspection costs vary but a good rule of thumb would be to expect to pay from $300 to $500 depending on size and age of the home. That’s a good sum, but perhaps think of it this way: Those who skip out on the expense may realize in a few years that an inspection is much cheaper than rewiring the entire house.
Negotiate
One of the advantages of having a home inspection performed before you buy is the power it might give you to negotiate a lower price. If a home you’re really interested in is on the edge of your price range, information gathered during the home inspection may give you the bargaining power to talk down the price. You can also insert language into a purchase contract that allows you to back out of an agreement if the inspection turns up problems.
Seller’s Repairs
Not only are you able to negotiate a lower price, many buyers include clauses in their contract requiring the seller to make the repairs necessary before any money is exchanged. If the seller is unwilling to complete the repairs, estimate the cost and ask them to take that amount off the total. Solid facts about the quality and condition of the home can give you valuable bargaining power.
Remember that a seller’s repairs are not eligible to be included in seller concessions. VA guidelines allow the value of seller concessions to equal up to 4 percent of the selling price, but that 4 percent comes is in addition to any negotiated repairs. Learn more about seller concessions here.
Know What You’re Buying
In the end the most important reason to have a home inspection before you buy is to really know what you’re buying. Research your potential home like you would any other major purchase. The more you know, the fewer surprises there will be down the road. Home inspectors can help you make a decision based on your current budget as well as your future time and money investment.
Your home is your biggest investment. Build a team of experienced realtors, inspectors, & lenders to help guide you through the homebuying process.
Action List Widget
The Action List widget is a simple tool that saves realtors & clients time & makes it easy to create the list of request items as part of the negotiation process with the seller.
The link is generated when the report is sent out to the client & their agent.
Having your home inspected during the COVID-19 pandemic?
Concerned about having your home inspected during the COVID-19 pandemic? You’re not the only one. Realtors, Inspectors, Appraisers, and Handymen are a few within the real estate industry who are just as worried.
Many of us receive daily notifications regarding policies, procedures, preventative measures, and the like from our national, state, and local affiliations and government officials. And from our experiences within the last few weeks, we know that more than likely you and your listing realtor have discussed what precautions should be taken before, during, and after a showing of your home.
HOME SELLERS PRE-HOME INSPECTION SUGGESTIONS
If you’re having your home inspected during the COVID-19 pandemic, these are the same steps you should take for the home inspection:
If you have symptoms of the COVID-19, postpone the showings / inspections;
Do not shake hands – this does seem to be a social nicety that is ingrained in us all;
Do not attend the showing / inspection. Make arrangements for children, relatives, and others to be out of the home during the inspection;
Create the following signs (link) to be left at the house:
Nicely advise that anyone who has any symptoms of COVID-19 are not to enter the home;
Be sure that guests maintain social distancing of six or more feet apart;
Require everyone to wash their hands or to use an alcohol-based hand sanitizer immediately upon entry;
Require everyone to cover footwear with booties;
Ask that individuals use other Personal Protective Equipment (PPE) such as gloves and face masks;
Request that individuals dispose of their PPE elsewhere;
Leave cabinets & room doors open for buyers / inspectors to browse / inspect without touch; and,
Disinfect your home after the open house / home inspection, especially commonly touched areas like doorknobs and faucet handles.
Job transfers, moves, home showings, sales and inspections are still occurring during the COVID-19 Pandemic. Which is why taking precautions to ensure sellers, buyers, real estate professionals, and their loved ones are protected from illness is a priority for us all.
Build a Team to find your Dream
Buying a home is a very rewarding & exciting time, but it is also a very vulnerable time. That’s why it’s important to build a team made up of professionals whose primary focus & goal is to aid clients in making one of the largest decisions in their lives.
Being part of a home-buyers “Real Estate Procurement Team” (made up of the Realtor, Lender, Home Inspector, Insurer, Title/Settlement Company, etc.) has been an honor throughout my career. First as a builder, then a Home Inspector, & most recently as a HUD Renovation Consultant. But, I’ve also been on the other side of the table as the home buyer, & more recently as the father of a home buyer, & have experienced the emotional spectrum (follow thislinkto a funny article about that) our clients & their families are going through.
While there are stresses found in every aspect of real estate, from start to finish, there are also many joys. When I ask lenders, realtors, settlement clerks, insurance agents, appraisers, (etc.) what they find most rewarding about being in real estate, the answer more often than not is “helping people accomplish their dreams“. From my own experience as a Superintendent with Camberley Homes, as a HUD Consultant, & as a Home Inspector – I couldn’t agree more.
In my previous life as a Senior Builder / Superintendent with Camberley Homes, I always looked forward to the New Home Orientation / Homeowner Walk Through. As the superintendent, I was there with the clients as they created their selection sheets and a 2D representation of their future home was put together. After months of construction & working together through the stresses of building a new home, the project was finally complete, & we could breath. The N.H.O. is the day that I got to showcase all of the efforts of the building team to create the clients dream home.
Buying a home is a very stressful time & will be one of the largest financial decisions you make. There are a lot of costs involved in purchasing the home which take some homeowners by surprise(i.e. closing costs, insurance fee’s, broker fee’s, inspections, etc.). A lot of buyers find themselves thinking of skipping the home inspection, but there are tons of articles out there on why NOT to skip the home inspection. Here are just some statements made by industry leaders:
Amy Fontinelle with Investopediastates that “Home inspections are used to provide an opportunity for a buyer to identify any major issues with a home prior to closing. Your first clue that a home inspection is important is that it can be used as a contingency in your contract with the seller. This contingency provides that if significant defects are revealed by a home inspection, you can back out of your purchase offer, free of penalty, within a certain time frame. The potential problems a home can have must be pretty serious if they could allow you to walk away from such a significant contract.”
James Shea with Homes.com lists a few reasons why a home buyer doesn’t want to skip a home inspection:
Unseen & Unpredicted Problems being pointed out by an unbiased professional;
More Options with regards to negotiations, etc.;
Cost Efficiency as “a quality home inspection can keep you from having to pay tens of thousands of dollars in repair costs”.;
Being able to identify potential Structural Problems;
Signs of current or potential roof Leaks;
Identifying issues which affect the Safety & Soundness of the home;
Being able to plan ahead for future Maintenance Costs;
Gaining Negotiation Leverage; and,
Knowing the condition of the home provides Peace of Mind.
Ashley Eneriz of Wise Bread, Living on a Small Budgetdiscusses how getting the home inspection can potentially save you thousands of dollars. Ashley relates stories of concerns related to “Not Taking the Seller’s Word“, being able to “Prepare for Future Costs“, and cautions against taking “Bribes to Skip the Inspection“. There are also tips on what to look for in a Home Inspector and weather or not you should be present for the Home Inspection.
Please take a moment to do your own search & read what the results are.
PRIORITY HOME MAINTENANCE: Dryer Vent Cleaning
Increase your appliances efficiency while eliminating a potential fire hazard.
As a Home Inspector, I see a lot of dirty dryer vents – some completely clogged with lint and even birds’ nests. It’s something that too often gets overlooked by even the most conscientious of homeowners. Possibly because most of us think that if we clean the lint trap before each load, we’re doing good. Unfortunately, that’s not the case as lint also bypasses the internal filter, getting into not only the vent house, but also inside the dryer. Which is why my number one reason for bringing this to the attention of my clients is that according to FEMA, failure to clean accounted for thirty four percent (34%) of ALL clothes dryer fires in residential buildings” (TFRS Volume 13, Issue 7).
According to the National Fire Protection Association’s (NFPA) research, between 2010-2014 U.S. municipal fire departments responded to an estimated 15,970 home fires involving clothes dryers or washing machines each year. These fires resulted in annual losses estimated at:
13 civilian deaths;
440 civilian injuries; and,
$238 million in direct property damage.
The NFPA also found that between 2010-2014, the leading items first ignited in clothes dryer fires were dust, fiber, or lint (27%) and clothing (26%). In washing machine fires, the leading items first ignited were electrical wire or cable insulation (26%) and appliance housing and casing (24%). It’s to be noted that in most of these home fires involved clothes dryers (92%), with the leading cause (31%) of home clothes dryer and washer fires was failure to clean.
Another reason that I bring this to the attention of my clients is Energy Efficiency. In a study between a clogged vent and a clean vent, it was found that there was a substantial time, energy, and financial savings between the two:
While you could hire a professional to clear out the vent for you, this is also job that you can do yourself. The NFPA has released this educational video with some safety tips to help prevent clothes dryer fire, and you can find additional information at http://www.nfpa.org/safetytips
ROI of Radon Reducing New Construction
Having your dream home built? Make sure you talk to your builder about Radon Reducing New Construction (RRNC) methods and techniques to help keep you and your family safe. Additionally, this will be a huge selling point for “health-conscious home buyers” down the road when you’re working to secure your return on investment.
RRNC is an affordable measure that can be taken during the construction of a home to effectively reduce the homes radon level by approximately 50%. Be sure to hire a properly trained contractor to perform the installation. Although it looks simple, if not done properly it could end up not working at all and then costing more money in the long run to fix it.
It’s important to understand the various options available as “the cost to a builder of including radon-resistant features in a new home during construction can vary widely. Many builders routinely include these features in some of their homes. The cost to the builder of including these features is typically less than the cost to mitigate the home after construction.” (EPA)
Using the HUD 203(k) Mortgage Insurance Program to Reduce the Risk of Lung Cancer in People
The Section 203(k) mortgage financing program is the Housing and Urban Development’s (HUD) primary tool for rehabilitating and improving single family homes. The program allows home buyers to finance the purchase and repair or improvement of a home using a single mortgage loan.
Reducing radon levels in a home is an improvement that can be financed through a 203(k) mortgage loan. Part of the 203(k) mortgage proceeds must be used to pay the costs of rehabilitating or improving a residential property.
To qualify, the total cost of the eligible repairs or improvements, including fixes to reduce radon levels, must be at least $5,000.
The 203(k) program is an important tool for expanding home ownership, revitalizing homes, neighborhoods and communities and for making homes healthier and safer for those who occupy them.
Homes eligible for 203(k) financing include:
one to four-family dwellings that have been completed for at least one year;
dwellings that have been demolished, provided some of the existing foundation system remains; and,
converting a one-family dwelling into a two, three, or four-family dwelling; or, alternatively, converting an existing multi-unit dwelling into a one to four-family unit.
The 203(k) program has been used successfully by many lenders to rehabilitate properties through partnerships with state and local housing agencies and with non-profit organizations. To further help borrowers buy homes, lenders have found innovative ways to combine the 203(k) program with other financial resources like HUD’s HOPE and Community Development Block Grant Programs.
Contact an FHA-approved lender in your area for more information about HUD’s 203(k) program, or if you are interested in getting a 203(k) insured mortgage loan. To find a lender, please use HUD’s Lender List (LINK).
The National Association of Realtors – a Great Resource for Home-buyers
Home-buyers need every tool at their disposal to understand the labyrinth of Residential Real Estate. One tool we gain a lot of information from is the National Association of Realtors “Realtor Magazine”. Have a Question? Use their search bar to locate informative articles or just review their “Daily News Articles” where you will find articles such as these:
Realtors & their associations are advocates for the right to own, use, & transfer real property. Meaning, they are YOURadvocates for home-ownership.
Home Inspection & Radon Testing Contingency
DON’T SHOP PRICE, SHOP EXPERIENCE!!!!
You’ve finally found the home of your dreams & can see a light at the end of the tunnel. But now you find out that you have a 7 Day Home Inspection & Radon Testing Contingency period & need to hire an inspector ASAP!!!!
One of the BIGGEST MISTAKES you could make when choosing an inspector is to focus in on the cost of the inspection. Don’t just assume that all home inspectors are equal!! There are a lot of moving parts to purchasing a home. It can be timely, costly, and frustrating – BUT, remember this is one of the largest purchases of your life, so it’s to be expected. Take advantage of the Home Inspection & Radon Testing Contingency as not only a negotiation tool to ask for repairs or credits, but as an introduction to your new home.
So, before you start making those phone calls to choose your inspector, we wanted to give you two examples of phone calls we receive:
Realize that during this process, you’ve actually been assembling a Home Purchasing Team that can help you navigate through the labyrinth.
