Everything you need to know to pass your inspection

11 Things You Need to Know to Pass Your Home Inspection

 

 


“According to industry experts, there are at least 33 physical problems that will come under scrutiny during a home inspection when your home is for sale. Here are 11 you should know about if you’re planning to put your home up for sale.”


Homebuyers Want to Know Your Home Inside and Out

While homebuyers are as individual as the homes they plan on purchasing, one thing they share is a desire to ensure that the home they will call their own is as good beneath the surface as it appears to be. Will the roof end up leaking? Is the wiring safe? What about the plumbing?  These, and others, are the questions that the buyers looking at your home will seek professional help to answer.

According to industry experts, there are at least 33 physical problems that will come under scrutiny during a home inspection. We’ve identified the 11 most common of these and, if not identified and dealt with, any of these 11 items could cost you dearly in terms of repair.

In most cases, you can make a reasonable pre-inspection yourself if you know what you’re looking for. Knowing what you’re looking for can help you prevent little problems from growing into costly and unmanageable ones.

11 Things You Need to Know to Pass Your Home Inspection

1. Defective Plumbing

Defective plumbing can manifest itself in two different ways: leaking, and clogging. A visual inspection can detect leaking, and an inspector will gauge water pressure by turning on all faucets in the highest bathroom and then flushing the toilet. If you hear the sound of running water, it indicates that the pipes are undersized. If the water appears dirty when first turned on at the faucet, this is a good indication that the pipes are rusting, which can result in severe water quality problems.

2. Damp or Wet Basement

An inspector will check your walls for a powdery white mineral deposit a few inches off the floor, and will look to see if you feel secure enough to store things right on your basement floor. A mildew odor is almost impossible to eliminate, and an inspector will certainly be conscious of it.

It could cost you $200-$1,000 to seal a crack in or around your basement foundation depending on severity and location. Adding a sump pump and pit could run you around $750 – $1,000, and complete waterproofing (of an average 3 bedroom home) could amount to $5,000-$15,000. You will have to weigh these figures into the calculation of what price you want to net on your home.

3. Inadequate Wiring & Electrical

Your home should have a minimum of 100 amps service, and this should be clearly marked. Wire should be copper or aluminum. Home inspectors will look at octopus plugs as indicative of inadequate circuits and a potential fire hazard.

4. Poor Heating & Cooling Systems

Insufficient insulation, and an inadequate or a poorly functioning heating system, are the most common causes of poor heating. While an adequately clean furnace, without rust on the heat exchanger, usually has life left in it, an inspector will be asking and checking to see if your furnace is over its typical life span of 15-25 yrs. For a forced air gas system, a heat exchanger will come under particular scrutiny since one that is cracked can emit deadly carbon monoxide into the home. These heat exchangers must be replaced if damaged – they cannot be repaired.

5. Roofing Problems

Water leakage through the roof can occur for a variety of reasons such as physical deterioration of the asphalt shingles (e.g. curling or splitting), or mechanical damage from a wind storm. When gutters leak and downspouts allow water to run down and through the exterior walls, this external problem becomes a major internal one.

6. Damp Attic Spaces

Aside from basement dampness, problems with ventilation, insulation and vapor barriers can cause water, moisture, mold and mildew to form in the attic. This can lead to premature wear of the roof, structure and building materials. The cost to fix this damage could easily run over $2,500.

7. Rotting Wood

This can occur in many places (door or window frames, trim, siding, decks and fences). The building inspector will sometimes probe the wood to see if this is present – especially when wood has been freshly painted.

8. Masonry Work

Re-bricking can be costly, but, left unattended, these repairs can cause problems with water and moisture penetration into the home which in turn could lead to a chimney being clogged by fallen bricks or even a chimney which falls onto the roof. It can be costly to rebuild a chimney or to have it repainted.

9. Unsafe or Over-fused Electrical Circuit

A fire hazard is created when more amperage is drawn on the circuit than was intended. 15 amp circuits are the most common in a typical home, with larger service for large appliances such as stoves and dryers. It can cost several hundred dollars to replace your fuse panel with a circuit panel.

10. Adequate Security Features

More than a purchased security system, an inspector will look for the basic safety features that will protect your home such as proper locks on windows and patio doors, dead bolts on the doors, smoke and even carbon monoxide detectors in every bedroom and on every level. Even though pricing will vary, these components will add to your costs. Before purchasing or installing, you should check with your local experts.

11. Structural/Foundation Problems

An inspector will certainly investigate the underlying footing and foundation of your home as structural integrity is fundamental to your home.

When you put your home on the market, you don’t want any unpleasant surprises that could cost you the sale of your home. By having an understanding of these 11 problem areas as you walk through your home, you’ll be arming yourself against future disappointment.

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13 Extra Costs to be Aware of Before Buying a Home


 “The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home.”


Whether you’re looking to buy your first home, or trading up to a larger one, there are many costs – on top of the purchase price – that you must figure into your calculation of affordability. These extra fees, such as taxes and other additional costs, could surprise you with an unwanted financial nightmare on closing  day if you’re not informed and prepared.

Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all of these costs will apply in every situation, however it’s better to know about them ahead of time so you can budget properly.

Remember, buying a home is a major milestone. Whether it’s your first, second or tenth home, there are many important details to address, during the process. The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home.

Read through the following checklist to make sure you’re budgeting properly for your next move.

1. APPRAISAL FEE

Your lending institution may request an appraisal of the property which would be your responsibility to pay for. Appraisals can vary in price from approximately $175 -$ 300.

2. PROPERTY TAXES

Depending on your down payment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that your taxes have been paid.

3. SURVEY FEE

When the home you purchase is a resale (vs. a new home), your lending institution may ask for an updated property survey. The cost for this survey can vary between $700- $1,000.

4. PROPERTY INSURANCE

Home insurance covers the replacement value of your home (structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan.

5. SERVICE CHARGES

Any new utility that services your hook up, such as telephone or cable, may require an installation fee.

6. LEGAL FEES

Even the simplest of home purchases should have a lawyer involved to review all paperwork. Shop around, as rates vary greatly depending on the complexity of the issues and the experience of the lawyer.

7. MORTGAGE LOAN INSURANCE FEE

Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% -3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment.

8. MORTGAGE BROKERS FEE

A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost.

9. MOVING COSTS

The cost for a professional mover can cost you in the range of:

  • $50-$100/hour for a van and 3 movers, and

  • 10-20% higher during peak demand seasons.

10. MAINTENANCE FEES

Condos charge monthly fees for common area maintenance such as grounds keeping and carpet cleaning in hallways. Costs will vary depending on the building.

11. WATER QUALITY AND QUALITY CERTIFICATION

If the home you purchased is serviced by a well, you should consider having your water checked by your local experts. Where you live determines whether or not a fee is charged to certify the quantity and quality of the water.

12. LOCAL IMPROVEMENTS

If the town you live in has made local improvements (such as the addition of sewers or sidewalks), it could impact a property’s taxes by thousands of dollars.

13. LAND TRANSFER TAX

This tax is applied whenever property changes hands and the amount that is applied can vary.

9 Buyer Traps and How to Avoid Them

9 Buyer Traps and How to Avoid Them

 

 


“A systemized approach to the home buying process can help you steer clear of these common traps, allowing you to not only cut costs, but also secure the home that’s best for you.”


No matter which way you look at it, buying a home is a major investment.  But for many homebuyers, it can be an even more expensive process than it needs to be since they fall prey to at least a few of the many common and costly mistakes which trap them into either:

  • paying too much for the home they want, or
  • losing their dream home to another buyer or,
  • (worse) buying the wrong home for their needs.

A systemized approach to the home buying process can help you steer clear of these common traps, allowing you to not only cut costs, but also secure the home that’s best for you.

9 Buyer Traps

This important report discusses the 9 most common and costly homebuyer traps, how to identify them, and what you can do to avoid them:

1. Bidding Blind

What price should you offer when you bid on a home? Is the seller’s asking price too high, or does it represent a great deal. If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.

2. Buying the Wrong Home

What are you looking for in a home? A simple enough question, but the answer can be quite complex. More often than not, buyers have been swept up in the emotion and excitement of the buying process only to find themselves the owner of a home that is either too big or too small. Maybe they’re stuck with a longer than desired commute to work, or a dozen more fix-ups than they really want to deal with now that the excitement has died down. Take the time upfront to clearly define your wants and needs. Put it in writing and then use it as a yard stick with which to measure every home you look at.

3. Unclear Title

Make sure very early on in the negotiation that you will own your new home free and clear by having a title search completed. The last thing you want to discover when you’re in the back stretch of a transaction is that there are encumbrances on the property such as tax liens, undisclosed owners, easements, leases or the like.

4. Inaccurate Survey

As part of your offer to purchase, make sure you request an updated property survey which clearly marks your boundaries. If the survey is not current, you may find that there are structural changes that are not shown (e.g. additions to the house, a new swimming pool, a neighbor’s new fence which is extending a boundary line, etc.). Be very clear on these issues.

5. Undisclosed Fix-ups

Don’t expect every seller to own up to every physical detail that will need to be attended to. Both you and the seller are out to maximize your investment. Ensure that you conduct a thorough inspection of the home early in the process. Consider hiring an independent inspector to objectively view the home inside and out, and make the final contract contingent upon this inspector’s report. This inspector should be able to give you a report of any item that needs to be fixed with associated, approximate cost.

6. Not Getting Mortgage Pre-approval

Pre-approval is fast, easy and free. When you have a pre-approved mortgage, you can shop for your home with a greater sense of freedom and security, knowing that the money will be there when you find the home of your dreams.

7. Contract Misses

If a seller fails to comply to the letter of the contract by neglecting to attend to some repair issues, or changing the spirit of the agreement in some way, this could delay the final closing and settlement. Agree ahead of time on a dollar amount for an escrow fund to cover items that the seller fails to follow through on. Prepare a list of agreed issues, walk through them, and check them off one by one.

8. Hidden Costs

Make sure you identify and uncover all costs – large and small – far enough ahead of time. When a transaction closes, you will sometimes find fees for this or that sneaking through after the “sub”-total  fees such as loan disbursement charges, underwriting fees etc. Understand these in advance by having your lender project total charges for you in writing.

9. Rushing the Closing

Take your time during this critical part of the process, and insist on seeing all paperwork the day before you sign. Make sure this documentation perfectly reflects your understanding of the transaction, and that nothing has been added or subtracted. Is the interest rate right? Is everything covered? If you rush this process on the day of closing, you may run into a last minute snag that you can’t fix without compromising the terms of the deal, the financing, or even the sale itself.

DIVORCE: What You Need to Know About Your House, Your Mortgage and Taxes

 

“Once you know how a divorce affects your home, mortgage and taxes, critical decisions are easier. Neutral, third party information can help you make logical, rather than emotional decisions.”

 

How to Avoid Costly Housing Mistakes in the Midst of a Divorce

Divorce is a tough situation which opens up many emotional and financial issues to be solved. One of the most important decisions is what to do about the house.

In the midst of the heavy emotional and financial turmoil, what you need most is some non-emotional, straight-forward, specific answers. Once you know how a divorce affects your home, your mortgage and taxes, critical decisions are easier. Neutral, third party information can help you make logical, rather than emotional decisions.

Probably the first decision is whether you want to continue to living in the house. Will the familiar surroundings bring you comfort and emotional security, or unpleasant memories? Do you want to minimize change by staying where you are, or sell your home and move to a new place that offers a new start?

Only you can answer these questions, but there will almost certainly be some financial repercussions to your decision process. What can you afford? Can you manage the old house on your new budget? Is refinancing possible? Or is it better to sell and buy? How much house can you buy on your new budget? The purpose of this report is to help you ask the right questions so you can make informed decisions that will be right for your situation.

4 OPTIONS

You have 4 basic housing options when in the midst of a divorce:

  1. Sell the house now and divide up the proceeds.
  2. Buy out your spouse.
  3. Have your spouse buy you out.
  4. Retain your ownership.

It’s important for you to understand the financial implications of each of these scenarios.

1. Sell the House Now and Divide Up the Proceeds

Your primary consideration under these circumstances is to maximize your home’s selling price. We can help you avoid the common mistakes most homeowners make which compromise this outcome. As you work to get your financial affairs in order, make sure you understand what your net proceeds will be – i.e. after selling expenses, and after determining what your split of the proceeds will be. Note that the split may not be 50/50, but rather may depend on the divorce settlement, the source of the original down payment, and the legislative property laws in your area.

2. Buy Out Your Spouse

If you intend to keep the house yourself, you’ll have to determine how you’ll continue to meet your monthly financial obligations, if you now only have one salary. If you used two incomes to qualify for the old loan, refinancing on your own might be a challenge.

3. Have Your Spouse Buy You Out

If you are the one who is leaving, you have the opportunity to start again in new surroundings with cash in your pocket. However, be aware that if the the old home loan is not refinanced, most lenders will consider both you and your spouse as original co-signers to be liable for the mortgage. This liability may make qualifying for a new mortgage difficult for you if you decide to purchase a home, even though you won’t have legal ownership.

4. Retain Joint Ownership

Some divorcing couples postpone a financial decision with respect to the home and retain joint ownership for a period of time even though only one spouse lives there. While this temporary situation means you have no immediate worries in this regard, keep your eye on tax considerations which may change from the time of your divorce to the time of the ultimate sale.

When You Decide to Sell

I f you and your spouse decide to sell your home, it will be important to work together through a professional to maximize your return. Differences aside, you both should be present when a listing contract is put together. Both of you should understand and sign this contract, and both should be active in the ultimate negotiations.

When You Buy Your Next Home

Use the proceeds from your previous home or buy out to determine an affordable price range for your next home. Maintain a clear focus on getting the right home to suit your new situation. You may wish to review with an agent who offers a house-hunting service to help find a home that matches your new home buying criteria. 

How to Avoid Getting Stuck With Two Homes

 

“…you could run the risk of owning two homes…if you sell first, you could end up homeless”

We’ve all heard the old saying about being caught between a rock and a hard place. Well unfortunately, that’s where most homeowners find themselves when they decide to move from one home to another.

The Real Estate Catch 22

You see, if you buy before selling, you could run the risk of owning two homes. Or, just as bad, if you sell first, you could end up homeless. That’s what is known as the Real Estate Catch 22, and for thousands of homeowners, it’s an extremely stressful position they find themselves in.

The Solution: How to Avoid The Real Estate Catch 22

This financial and emotional tightrope is one many homeowners feel they have to walk alone. However, you should seek out agents offering specialized programs that can eliminate the stress and worry associated with selling and buying another home.

The Dilemma

The biggest dilemma when considering purchasing another home is deciding whether to buy first or sell first. Either way is risky because you could end up owning two homes or no home at all. Let’s face it, the real estate market has become a tough environment for buyers and sellers alike. The fact is that it’s more difficult to get homes sold today and therefore it’s essential that real estate agents look for new and innovative ways to meet the demands of the market.

The Solution

A new and innovative program that some agents offer actually guarantees the sale of your home and takes away all of the worry and stress associated with selling and buying another home.

Here’s How it Works

  1. Your agent will prepare a total market analysis including a computerized printout of all comparable home sales and listings in your area.
  2. With this information you and your agent can determine a market value for your home.
  3. This establishes your guaranteed price and list price which you will receive up front (in writing) before your home is marketed.
  4. You are doubly protected because you know that your home will sell for the guaranteed price. However if you receive an offer from an outside buyer for more than the guarantee price you get the higher offer.
  5. You can confidently look for your next home and immediately place a firm cash offer (not a conditional one) when you find a home you like because you know the minimum that your home will sell for and when you can expect to receive the money from it’s sale.
  6. This service eliminates the usual stress and worry (the emotional roller coaster ride) of whether to buy first or sell first so you can avoid the risk of getting stuck with two homes or no home at all.

Remember, not all agents are alike and you should consider only those that can offer you the most innovative marketing plan available to ensure that your needs are completely and properly met.

How to Sell a House that Didn’t Sell

4 Important Points that Will Get Your house Sold!

If your home has just come off the market and hasn’t sold, don’t be discouraged. The reason it didn’t sell may have nothing to do with your home or the market. In reality, your home may have been one of the more desirable properties for sale. If your listing has expired and you still want results, before you put your home back on the market, take a step back and review your situation.

Q. Where should you begin?

A. Start by making a commitment to do what it takes to market your house to get it sold. With the right system, the home sale you want is still well within reach.

Q. Why didn’t your home sell?

A. Review your previous selling plan and you’ll discover that an expired listing usually reflects a problem in one or more of these four major areas:

  1. Teamwork,

  2. Pricing,

  3. Condition of Your Home, and

  4. Marketing.

1. Teamwork

Your home is a major financial investment, and your relationship with your Realtor®should be a full partnership where your needs and wishes are heard, and you receive detailed and dependable feedback on the progress of your sale. Your agent has a responsibility to source this feedback from the agents who have shown your home, and to communicate this to you so together you can make the right decisions about what to do next. How well did this occur the last time you had your home up for sale?

2. Pricing

Did price work for or against you? The “right” price depends on market conditions, competition and the condition of your home. Pricing it too high is as dangerous as pricing it too low. If your home doesn’t compare favorably with others in the price range you’ve set, you won’t be taken seriously by prospects or agents.

You’ll get the facts when you see the statistics!

  • To help you establish a realistic selling price for your home, ask your agent to provide you with an up-to-date competitive market analysis to give you:

  • a review of comparable homes recently sold or currently for sale,

  • an idea of how long other homes have been listed, in order to calculate an average time in which a home can sell in today’s market,

  • a review of homes whose listings have expired, to understand what issues were at play.

Note: There is no mention of how much you paid for your home or its improvements. Like any other investment, the market value is determined by what a willing buyer will pay and a willing seller will accept.

3. Condition of Your Home

Show Case Quality!

Is your house someone else’s idea of a dream home? When buyers enter are they inspired? Do they think, “I love this house!” Remember, the decision to buy a home is based on emotion, not logic.

A house in move-in condition invites a sale. You need to consider:

  • fixing all the little squeaks and cracks

  • keeping it clean for all showings

  • making it uncluttered

  • brightening it up

  • what your home shows like from the street concentrating on outside curb appeal.

Plus – Consider taking care of major items, such having your home painted. Offering an allowance to your prospective buyers, so they can have painting completed is not the same as having done it for them. Now, as they’re trying to imagine what that new paint job will look like, they may also be discounting the price even further because of the less-than-perfect look of those walls.

Remember….

A house that presents well, sells for the best price because it outshines the competition. Ask your agent if they can arrange a no-obligation inspection of your home to help you assess the above.

4. Marketing

….Marketing Your Home To Sell! Some Questions You Should Be Asking!

One of the first steps in your marketing plan involves finding an agent who will best represent you. When interviewing agents, test and compare their knowledge and ask each to demonstrate how they will market your home to buyers. Also compare how much money each spends on advertising the homes s/he lists, in what media (newspaper, magazine, etc.) and the effectiveness of one medium over the other. Remember, it’s not just how much they spend, but how they spend it.

Say goodbye to any real estate agents using old, traditional methods to sell your home because they don’t work in today’s market!

To be competitive in today’s marketplace, agents who use new and innovative, non-traditional marketing approaches are the ones who are getting more homes sold fast and for top dollar.

Buyers are Out There…And They Will Come!

Before You Put Your Home Back on the Market remember:

  1. Effective communication is vital between you and your agent.

  2. Price your home according to market conditions, competition and the condition of your house.

  3. Be sure your house is in showcase, buyer ready-condition.

  4. Have an innovative marketing plan firmly set in place. Not intended to solicit property currently listed for sale.

3 Legal Issues That Could Cost You Thousands

3 Legal Issues That Could Cost You Thousands

Following are 3 common examples of legal clauses that can work to your disadvantage if not worded correctly:

1. Survey Clause

Home buyers have the right to add a survey clause to the real estate contract on the home they wish to purchase. When this home is yours, you should be aware of the implications of this clause. Your current survey may no longer be up-to-date if you have had a swimming pool built, or an addition added, since the survey was drawn up. If your survey is not up-to-date by these standards, the buyer may request an updated survey. The home seller may be required to bear the cost to have a new survey prepared. The cost for this process typically runs anywhere from $700 to $1,000. This is $700-$1,000 less that you will net for your home.

An experienced real estate agent should provide you with a survey and it is up to the buyer to decide if the survey is acceptable. Your agent should be able to advise you appropriately when dealing with this issue, but if you or your agent are unsure, you have the right to consult your lawyer before you sign the offer. Don’t be afraid to take this important step, as thousands of dollars could be riding on the decisions you make at this point.

2. Home Inspection Clause

Some real estate transactions have fallen through because of the wording of the inspection clause. This clause previously stated that the buyer has the right to rescind their offer if they were dissatisfied with the outcome of a home inspection. In some cases, this was used unfairly against the seller when a minor repair issue would give the buyer a legal loophole to their change of heart. Meanwhile, the seller lost both time and money because of this technicality. First, they may have declined other offers (offers which may now be lost for-ever) in favor of the one which has now fallen through, and missed the opportunity for other offers which might have come through during the current negotiations. Secondly, their home may have been unfairly labeled as a “problem house” which could cost them in terms of the dollar amount of subsequent offers. And thirdly, they then found themselves back on the market, incurring the inconvenience and additional carrying costs of having to market their property for a longer period of time.

This clause should read that the seller has the option to fix any items that the home inspection flags. This wording protects both the buyer and the seller. The buyer is assured that the home they are buying meets objective structural standards, and the seller is protected against the whim of a buyer who changes his/her mind.

Not all contracts will be written in this way. Make sure you are working with a lawyer experienced in real estate matters to ensure your interests are protected.

3. Swimming Pool Clause

If the home you are buying or selling has a swimming pool, there should be a specific legal clause which addresses this costly item. Some contracts are written to provide a warranty to the pool to survive closing. The broadness of this wording protects buyers, but is not necessarily in the best interest of sellers who might instead request that the clause be worded to indicate that, at the time of closing, they believe the pool to be in good working condition.

The existence of a pool in any home negotiation is certainly reason enough to ensure that you seek advice from a real estate professional and obtain legal counsel so that your interests are represented properly.

By being aware of these and other legal issues, and by seeking advice from an experienced real estate professional and obtaining legal counsel, you can protect yourself against unnecessary cost and potential hardship.