A trope as old as horror movies: a family moves into a beautiful house that they bought for well under market value. They’ve put all their savings into the move, and they’re looking for a fresh start. When they meet the neighbors and other townsfolk, they quickly learn that there’s a history to the home that they weren’t aware of.
When they start to experience the abnormal, it’s easy to brush off as new home jitters. The children who hear noises in the closet, and a husband who starts sleepwalking, are chalked up to stress and anxiety from the move. It’s only when the experiences escalate beyond control that the family finally realizes the extent of the haunting.
While sharing a home with the supernatural can be a selling point for some buyers, it’s quite the opposite for others. In fact, a 2017 survey by Realtor.com found that 33% of people were open to living in a haunted house, 25% would consider it, but 42% said it was a deal-breaker. So how do you make sure you’re fully informed about a home’s history? Knowing the right questions to ask is the first step:
Ask to see the seller disclosure form
In the famous 1991 case Stambovsky v. Ackley, the new homeowner, Jeffrey Stambovsky, won a lawsuit against the previous owner for not disclosing the history of hauntings.
In this case, the previous owner had published stories about the family’s experiences in Reader’s Digest and their local newspaper. In her writings, she explained several interactions with ghostly beings in the home, including finding that her children had been given rings, which would later disappear, bed shaking, and conversations with the floating specters.
The court took this evidence and ruled the “defendant is estopped to deny [the ghost’s] existence and, as a matter of law, the house is haunted.” Setting a new standard, this case created a basis for future seller disclosers. In this instance, they found that the history of the home, and the seller’s experiences in the home, would have influenced the marketability, and therefore, omitting these facts was unfair to the buyer.
Fast forward to 2019, there is not a specific section on seller disclosure forms for hauntings or ghostly sightings, but thanks to Stambovsky v. Ackley, sellers in many states are obligated by law to disclose things that affect a house’s marketability.
Ask Google about the history of the home
In 1991 when Mr. Stambovsky bought his haunted house, search engines didn’t exist. Today, we’re lucky enough to have things like Google which would have found the previous home owner’s stories in mere seconds. Search keywords like the address or town name, and words like “haunted” or “ghosts”, as well as “murder” or “news report” should help you start your dive into the history of the home.
Ask the neighbors and your agent
This is where nosey neighbors come in handy. When you find a place you’re serious about, contact the neighbors to see what they know about the home’s history. The same goes for your real estate agent; he or she can reach out to the listing agent to see if there is anything haunting you should know about prior to buying. While many states don’t require sellers to disclose paranormal activity or deaths in the home, if asked, all real estate agents must, by law, answer truthfully.
Your kids have moved out and now you’re living in a big house with way more space than you need. You have two choices – remodel your existing home or move. Here are some things to consider about each option.
Choice No. 1: Remodel your existing home to better fit your current needs.
- Remodeling gives you lots of options, but some choices can reduce the value of your home. You can combine two bedrooms into a master suite or change another bedroom into a spa area. But reducing the number of bedrooms can dramatically decrease the value of your house when you go to sell, making it much less desirable to a typical buyer with a family.
- The ROI on remodeling is generally poor. You should remodel because it’s something that makes your home more appealing for you, not because you want to increase the value of your home. According to a recent study, on average you’ll recoup just 64 percent of a remodeling project’s investment when you go to sell.
- Remodeling is stressful. Living in a construction zone is no fun, and an extensive remodel may mean that you have to move out of your home for a while. Staying on budget is also challenging. Remodels often end up taking much more time and much more money than homeowners expect.
Choice No. 2: Sell your existing home and buy your empty nest dream home.
- You can downsize to a single-level residence and upsize your lifestyle. Many people planning for their later years prefer a home that is all on one level and has less square footage. But downsizing doesn’t mean scrimping. You may be able to funnel the proceeds of the sale of your existing home into a great view or high-end amenities.
- A “lock-and-leave” home offers more freedom. As your time becomes more flexible, you may want to travel more. Or maybe you’d like to spend winters in a sunnier climate. You may want to trade your existing home for the security and low maintenance of condominium living.
- There has never been a better time to sell. Our area is one of the top in the country for sellers to get the greatest return on investment. Real estate is cyclical, so the current boom is bound to moderate at some point. If you’re thinking about selling, take advantage of this strong seller’s market and do it now.
If your current home no longer works for you, consider looking at homes that would meet your lifestyle needs before taking on the cost and hassle of remodeling. Get in touch with a Windermere Real Estate broker to discuss the best option for you.
How to Avoid the Most Common Buying/Selling Mistakes
There’s nothing more exciting, rewarding, and fulfilling than buying a home. However, it’s a complex transaction, and there are a number of steps along the path that can confuse, betwixt, and befuddle even the most seasoned buyers and sellers.
How can you avoid those potential pitfalls and common mistakes? Look to your real estate professional for advice and keep these guidelines in mind:
#1 Review your credit reports ahead of time
Review your credit report a few months before you begin your house hunt, and you’ll have time to ensure the facts are correct, and be able to dispute mistakes before a mortgage lender checks your credit. Get a copy of your credit report from Experian, Equifax, and TransUnion. Why all three? Because, if the scores differ, the bank will typically use the lowest one. Alert the credit bureaus if you see any mistakes, fix any problems you discover, and don’t apply for any new credit until after your home loan closes.
#2 Get pre-approved
Before getting serious about your hunt for a new house, you’ll want to choose a lender and get pre-approved for a mortgage (not just pre-qualified—which is a cursory review of your finances—but pre-approved for a loan of a specific amount). Pre-approval lets sellers know you’re serious. Most importantly, pre-approval will help you determine exactly how much you can comfortably afford to spend.
#3 Know what you want
You and your real estate agent should both be clear about the house you want to buy. Put it in writing. First, make a list of all the features and amenities you really want. Then, number each item and prioritize them. Now, divide the list into must-haves and really-wants. A good place to start is the “HUD Wish List,” which is available online for free at http://www.hud.gov/buying/wishlist.pdf
#4 Account for hidden costs
In addition to the purchase price of the home, there are additional costs you need to take into consideration, such as closing costs, appraisal fees, and escrow fees. Once you find a prospective home, you’ll want to:
- Get estimates for any repairs or remodeling it may need.
- Estimate how much it will cost to maintain (gas, electric, utilities, etc.).
- Determine how much you’ll pay in taxes monthly and/or annually.
- Learn whether there are any homeowner or development dues associated with the property.
#5 Get an inspection
Buying a home is emotionally charged—which can make it difficult for buyers to see the house for what it truly is. That’s why you need impartial third parties who can help you logically analyze the condition of the property. Your agent is there to advise you, but you also need a home inspector to assess any hidden flaws, structural damage or faulty systems.
#6 Evaluate the neighborhood and location
When house hunting, it’s easy to become overly focused on the number of bedrooms and bathrooms, the condition of the home and its amenities while overlooking the subtleties of the surrounding neighborhood. Take time to check crime reports, school options, churches and shopping. If schools are a key factor, do more than simply research the statistics; speak with the principal(s) and chat with the parents waiting outside.
#1 Avoid becoming emotional or sentimental about the sale
Once you decide to sell your house, it’s time to strip out the emotion and look at it as a commodity in a business transaction. If you start reminiscing about all the good times you had and the hard work you invested, it will only make it that much harder to successfully price, prepare, and market the home.
#2 Fix problems (or price accordingly)
Homes with deferred maintenance and repair issues can take far longer to sell and can be subject to last-minute sale-cancellations. These homes also often sell for less than their legitimate market value. If you simply can’t afford to address critical issues, be prepared to work with your agent to price and market your home accordingly.
#3 Don’t overprice your home (and/or refuse to negotiate)
Getting top dollar is the dream of every seller. But it’s essential that you let the market dictate that price, not your emotions or financial situation. Allow your agent to research and prepare a market analysis that factors in the value of similar homes in the area, and trust those results.
#4 Use quality photos
The vast majority of prospective buyers today search for homes online first. In order to make a good first impression, you need a wealth of high-quality photos of your home and surrounding grounds. You may also need to consider professional staging in order to position your home in the best possible light for prospective buyers.
The process of buying or selling a home can have plenty of twists and turns, but with some smart decision making, you can avoid the most common mistakes and pitfalls.
Whether you’re a first-time homebuyer or a current owner looking for a bigger home, the ideas below will help you better navigate that all-important first step: Finding a property that you like (and can afford).
The search for a new home always starts out with a lot of excitement. But if you haven’t prepared, frustration can soon set in, especially in a competitive real estate market. The biggest mistake is jumping into a search unfocused, just hoping to “see what’s available.” Instead, we recommend you first take some time to work through the four steps below.
Step 1: Talk to your agent
Even if you’re just thinking about buying or selling a house, start by consulting your real estate agent. An agent can give you an up-to-the-minute summary of the current real estate market, as well as mortgage industry trends. They can also put you in touch with all the best resources and educate you about next steps, plus much more. If you are interested in finding an experienced agent in your in your area, we can connect you here.
Step 2: Decide how much home you can afford
It may sound like a drag to start your home search with a boring financial review, but when all is said and done, you’ll be glad you did. With so few homes on the market now in many areas, and so many people competing to buy what is available, it’s far more efficient to focus your search on only the properties you can afford. A meeting or two with a reputable mortgage agent should tell you everything you need to know.
Step 3: Envision your future
Typically, it takes at least five years for a home purchase to start paying off financially, which means, the better your new home suits you, the longer you’ll most likely remain living there.
Will you be having children in the next five or six years? Where do you see your career heading? Are you interested in working from home, or making extra money by renting a portion of your home to others? Do you anticipate a relative coming to live with you? Share this information with your real estate agent, who can then help you evaluate school districts, work commutes, rental opportunities, and more as you search for homes together.
Step 4: Document your ideal home
When it comes to this step, be realistic. It’s easy to get carried away dreaming about all the home features you want. Try listing everything on a piece of paper, then choose the five “must-haves,” and the five “really-wants.”
For more tips, as well as advice geared specifically to your situation, connect with an experienced Windermere Real Estate agent by clicking here.
It should come as no surprise that 75% of the senior citizens polled in the latest AARP Preferences survey strongly agreed with the statement, “What I’d like to do is stay in my current residence as long as possible.” After all, home is where the heart is; and the longer you live in a place, the stronger your attachment to it becomes.
But it’s important for those over 50 to assess potential lifestyle modifications that may be necessary down the road well in advance, because many will require significant research and preparation.
Whether you are planning for your own future or that of a loved one, analyzing new housing options before a change becomes necessary will help ensure you have the greatest number of options with the least amount of stress. Here are some considerations to help guide you or your loved one through the process.
Location and size
In planning for the future, communication with all involved parties is key to understanding where you or the senior in your life wants to be. Many seniors want to be close to family and friends. Proximity or access to basic needs is also a critical consideration, especially for those who no longer drive.
Once an area is chosen, think about how much space is needed. Most seniors choose to downsize to a smaller home, and here are many advantages to this. A smaller home generally means less maintenance, lower mortgage or rental costs, and lower taxes. Less space can also be easier to manage. Single-level homes are a good option for those with decreased mobility and can help reduce the likelihood of falls and injuries. You’ll also want to consider whether a yard is needed, and whether you’d need someone else to maintain it.
Multi-family homes, such as condominiums, cooperatives and townhomes, are well-suited for senior living, offering many options for budgets, maintenance and amenities. But most people don’t fully understand the differences between them.
Condominiums and cooperatives offer benefits of homeownership, but allow for certain expenses to be shared by all owners. Other benefits include security, shared building insurance and possible onsite amenities. Monthly fees are collected in both condominiums and cooperatives to maintain the property and any amenities, and both have elected boards of representatives who meet regularly to review operating expenses and building issues. Condominium ownership is based only on the unit, with taxes paid by the owner. In cooperatives, owners are shareholders, giving them sole rights and equity of their unit, but property taxes are shared by the building and included in your monthly fees.
Townhomes, on the other hand, allow for ownership of the structure and the land it sits on (front and back yards). Most are designed as row-houses, with one or two common walls. For those who prefer the legal rights of single-family ownership and do not want to pay monthly dues and do not want to pay monthly dues, a townhome may be the best option.
Drawbacks of multi-family homes can include noise from shared walls or floors, homeowner’s associations, monthly fees and CC&Rs (covenants, conditions and restrictions).
Renting can be a good way to avoid home ownership costs and maintenance. It may also be a more affordable way to live in a desirable area. Cons of renting can include noise through shared walls, the potential for your rent to increase over time, difficult or unreliable landlords, inattention to maintenance issues, and the possibility that you may need to move if the property is sold. It’s a good idea to talk to one or more current tenants of the rental to find out what their experience has been with the property and the landlord.
Alternative senior living options: independent and assisted
Another solution to consider for yourself or your family member is independent living communities (also called senior apartments, retirement communities, retirement communities, retirement homes and senior housing). Independent living communities provide privacy, independence, and the opportunity to connect with others without the demands of home ownership. They are usually full-service, offering meals, housekeeping, transportation and social activities.
For those who struggle with day-to-day living responsibilities, it may be time to consider assisted living arrangements. Some options include Adult Day Care, Elder Cottage Housing Opportunities (ECHO), Group Home, Special Care Unit (SCU) or Nursing Homes. Your state human resources department can usually provide more information about these options in your community and offer help with referrals, or you can opt for private referral services.
The costs for alternative housing can add up quickly—especially as the need for assistance increases. Medicare, unfortunately, does not pay for housing; but under strict financial restrictions, Medicaid may. To get a better feel for just how much these living arrangements can cost, visit GenWorth.com and search the cost of long term care where you live.
If the choice is made not to move, you could consider a reverse mortgage. This allows homeowners over the age of 65 to tap into their home equity in lieu of a monthly payment, with no repayment necessary as long as the property is their principal residence and they meet all the terms of the agreement. Keep in mind, however, that if the owner sells the home, dies, or does not meet the terms of the agreement, they or their family will be required to pay the remaining balance of the loan.
Some states offer assistance with property tax, or special assessments for seniors based on age, disability and household income. Check with your State Department of Revenue to see what options exist in your state and whether you qualify. Long-term care insurance is another option. An LTC policy will help pay for the costs not covered by traditional health insurance or Medicare (which can include assistance with daily-living activities, as well as the care provided in a variety of living/care facilities).
For more help and information
Your Windermere Real Estate agent can help you make the transition when the time is right by assessing the local property market, helping you properly price homes for sale, and finding a new home that best meets the unique needs of you or your loved ones.
According to two recent surveys that took industry watchers by surprise, many family homeowners are putting frugality aside and upsizing to new houses that average as large as 2,480 square feet (an increase of as much as 13 percent from the year before), and sometimes exceed 3,500 square feet in size.
Meanwhile, millions of baby boomer homeowners are rushing to downsize—with some 40 percent of Americans between the ages of 50 and 64 saying they’re planning to make a move within the next five years.
It’s a tale of two very different segments of the population making dramatic shifts in their living accommodations to find the housing solutions that best suit their needs: one upsizing while the other downsizes.
With so many baby boomers now nearing retirement age (8,000 Americans turn 65 every day), it should come as no surprise that the number of prospective “downsizers” exceed the number of “upsizers” by three to one. With their children gone, these aging homeowners are interested in reducing the amount of house they need to care for, and are eager to bulk up their retirement savings with any home-sale profits.
As for why many families are choosing to upsize so substantially after years of downsizing or staying put, experts point to the extremely low interest rates and discounted home prices available today, and theorize that many families now feel confident enough about the economy to move out of homes they outgrew years ago.
If you’re considering upsizing or downsizing, here are some facts to consider:
How such a move can impact your life
The most common benefits of downsizing:
- Lower mortgage payments
- Lower tax bills
- Lower utility bills
- Less maintenance (and lower maintenance expenses)
- More time/money for travel, hobbies, etc.
- More money to put toward retirement, debts, etc. (the profits from selling your current home)
The most common benefits of upsizing
- More living space
- More storage space
- More yard/garden space
- More room for entertaining/hosting friends and family
- Upsizing will likely increase your living expenses, so it’s important to factor into any financial forecasts
- Downsizing will require that you make some hard choices about what belongings will need to be stored or sold
Other impacts to consider:
- The loss of good neighbors
- Lifestyle changes (walking, neighborhood shopping, etc.)
- The effect on your work commute
- Public transit options
Buy first, or sell first?
Homeowners considering this transition almost always have the same initial question: “Should I buy the new home now, or wait and sell my current place first?” The answer is dependent on your personal circumstances. However, experts generally recommend selling first.
Selling your current home before buying a new one could mean you have to move to temporary quarters for some period of time—or rush to buy a new home. That could prove stressful and upsetting. However, if you instead buy first, you could be stuck with two mortgages, plus double property tax and insurance payments, which could quickly add up to lasting financial troubles.
If you need to sell in order to qualify for a loan, there’s no choice: You’ll have to sell first.
You could make the purchase of the new house contingent on selling your current home. However, this approach can put you in a weak bargaining position with the seller (if you can even find a seller willing to seriously consider a contingency offer). Plus, you may be forced to accept a low-ball offer for your current house in order to sell it in time to meet the contingency agreement timing.
The truth is, most home sales tend to take longer than the owners imagine, so it’s almost always best to finalize the sale, and do whatever is necessary to reap the biggest profit, before embarking on the purchase of your new home.
When to make the transition
Ideally, when you’re selling your home, you want to wait until the demand from potential buyers is high (to maximize your selling price). But in this case, because you’re also buying, you’ll also want to take advantage of any discounted interest rates and reduced home prices (both of which will fade away as the demand for homes grows).
How will you know when the timing is right to both sell and buy? Ask an industry expert: your real estate agent. As someone who has their finger on the pulse of the housing market every day, they can help you evaluate the current market and try to predict what changes could be coming in the near future.
Even if you’ve been through it before, the act of upsizing or downsizing can be complex. For tips, as well as answers to any questions, contact a Windermere agent any time.
Appraisals are designed to protect buyers, sellers, and lending institutions. They provide a reliable, independent valuation of a tract of land and the structure on it, whether it’s a house or a skyscraper. Below, you will find information about the appraisal process, what goes into them, their benefits and some tips on how to help make an appraisal go smoothly and efficiently.
Appraised value vs. market value
The appraised value of a property is what the bank thinks it’s worth, and that amount is determined by a professional, third-party appraiser. The appraiser’s valuation is based on a combination of comparative market sales and inspection of the property.
Market value, on the other hand, is what a buyer is willing to pay for a home or what homes of comparable value are selling for. A home’s appraised value and its market value are typically not the same. In fact, sometimes the appraised value is very different. An appraisal provides you with an invaluable reality check.
If you are in the process of setting the price of your home, you can gain some peace-of-mind by consulting an independent appraiser. Show him comparative values for your neighborhood, relevant documents, and give him a tour of your home, just as you would show it to a prospective buyer.
What information goes into an appraisal?
Professional appraisers consult a range of information sources, including multiple listing services, county tax assessor records, county courthouse records, and appraisal data records, in addition to talking to local real estate professionals.
They also conduct an inspection. Typically an appraiser’s inspection focuses on:
- The condition of the property and home, inside and out
- The home’s layout and features
- Home updates
- Overall quality of construction
- Estimate of the home’s square footage (the gross living area “GLA”; garages and unfinished basements are estimated separately)
- Permanent fixtures (for example, in-ground pools, as opposed to above-ground pools)
After considering all such information, the appraiser arrives at three different dollar amounts – one for the value of the land, one for the value of the structure, and one for their combined value. In many cases, the land will be worth more than the structure.
One thing to bear in mind is that an appraisal is not a substitute for a home inspection. An appraiser does a cursory assessment of a house and property. For a more detailed inspection, consult with a home inspector and/or a specialist in the area of concern.
Who pays and how long does it take?
The buyer usually pays for the appraisal unless they have negotiated otherwise. Depending on the lender, the appraisal may be paid in advance or incorporated into the application fee; some are due on delivery and some are billed at closing. Typical costs range from $275-$600, but this can vary from region to region.
An inspection usually takes anywhere from 15 minutes to several hours, depending on the size and complexity of your property. In addition, the appraiser spends time pulling up county records for the values of the houses around you. A full report comes to your loan officer, a real estate agent or lender within about a week.
If you are the seller, you won’t get a copy of an appraisal ordered by a buyer. Under the Equal Credit Opportunity Act, however, the buyer has the right to get a copy of the appraisal, but they must request it. Typically the requested appraisal is provided at closing.
What if the appraisal is too low?
If your appraisal comes in too low it can be a problem. Usually, the seller’s and the buyer’s real estate agents respond by looking for recent and pending sales of comparable homes. Sometimes this can influence the appraisal. If the final appraisal is well below what you have agreed to pay, you can renegotiate the contract or cancel it.
Where do you find a qualified appraiser?
Your bank or lending institution will find and hire an appraiser; Federal regulatory guidelines do not allow borrowers to order and provide an appraisal to a bank for lending purposes. If you want an appraisal for your own personal reasons and not to secure a mortgage or buy a homeowner’s insurance policy, you can do the hiring yourself. You can contact your lending institution and they can recommend qualified appraisers and you can choose one yourself or you can call your local Windermere Real Estate agent and they can make a recommendation for you. Once you have the name of some appraisers you can verify their status on the Federal Appraisal Subcommittee website.
Tips for hassle-free appraisals:
- What can you do to make the appraisal process as smooth and efficient as possible? Make sure you provide your appraiser with the information he or she needs to get the job done. Get out your important documents and start checking off a list that includes the following:
- A brief explanation of why you’re getting an appraisal
- The date you’d like your appraisal to be completed
- A copy of your deed, survey, purchase agreement, or other papers that pertain to the property
- If you have a mortgage, your lender, the year you got your mortgage, the amount, the type of mortgage (FHA, VA, etc.), your interest rate, and any additional financing you have
- A copy of your current real estate tax bill, statement of special assessments, balance owing and on what (for example, sewer, water)
- Tell your appraiser if your property is listed for sale and if so, your asking price and listing agency
- Any personal property that is included
- If you’re selling an income-producing property, a breakdown of income and expenses for the last year or two and a copy of leases
- A copy of the original house plans and specifications
- A list of recent improvements and their costs
- Any other information you feel may be relevant
By doing your homework, compiling the information your appraiser needs, and providing it at the beginning of the process, you can minimize unnecessary phone calls and delays and get the information you need quickly and satisfactorily!
While you hear a lot about ghosts in October, they’re actually a year-round phenomenon (and they’re not all as friendly as Casper). Specters come in all shapes and sizes in real estate, and they can be spookiest to prospective buyers. So, if you’re in the market for a home right now, you might want to consider your threshold for the paranormal. Here are some ways to identify – and avoid – ending up with a haunted house.
Something doesn’t feel right. When it comes to finding a home, we talk a lot about how a home feels. People generally feel it in their gut when they have found “the one”. Same goes for ghosts. If you feel like something is off, but you just can’t put your finger on it, you probably want to investigate a little further. This is the perfect time to break out the Ouija board and grab a bottle of something strong for your nerves (caution: seeing ghosts may or may not be due to alcohol consumption).
Follow the history of the home. Hit the interwebs and do a little online investigation to find out if the home has any skeletons in its closets (literally). Did anyone die in the house? Was it built on an ancient burial gravesite? Both of these could be DEAD giveaways for paranormal activity. Public records can be helpful for basic information, or you can check out this handy website: www.diedinhouse.com. If you don’t mind the house’s sordid past, use it as leverage to knock some zeros off the asking price. What’s a house filled with dead people if you can get it for a steal?
Meet the neighbors. It’s always a good idea to get to know the neighborhood before moving in. Learn about the schools, check out the local shops and amenities, and take a good look at who your neighbors will be. If you walk next door and the equivalent of the Adams family is staring you in the face, it might be a good time to look at other options. And if you have no other options, it’s never too early to invest in a respectable tombstone. Hey, if you can’t beat ’em, join ’em.
Follow the paperwork. When selling a home, homeowners are required to fill out a “Self Disclosure Form” to reveal any known issues. In some states, this includes revealing if the home has any paranormal activity. In fact, if a home is known to be haunted, it can be deemed a “stigmatized home” which can impact the sale. But keep in mind, self-disclosure of paranormal activity is hard to qualify and prove, so buyers beware.
Look for more overt signs. Did you feel a tap on your shoulder, but nobody was there? Is there blood oozing through the walls or furniture moving by itself? Or maybe a spirit physically manifested itself in front of you. Well, this might be a ghost trying to get your attention. If you have an experience like this, it’s probably a good idea to find the nearest exit as quickly as possible and move onto the next home.
Let logic be your guide. So you’ve fallen in love with a home, but you suspect that it’s haunted. There could be a totally plausible explanation. Start by trying to explain the phenomena you are feeling. Could the creaks and bangs come from pests or plumbing issues? Perhaps the chills you feel are caused by a draft? Are you watching too many horror movies? Do you need to make an appointment with your shrink? What you think are signs of a haunting could all be in your head.
For many people, a home inspection is a hurdle that has to be overcome during the process of buying or selling a home. But, in fact, it can be a useful tool for buyers, sellers or anyone who plans to get the greatest possible value from their home.
Find out if the house you are selling has “issues”
When you’re selling a house, a pre-sale inspection can be particularly useful. By uncovering any potential problems your house may have, an inspection can give you an opportunity to address them before your first prospective buyer arrives.
In any market, a pre-sale inspection can give your home a competitive edge. Potential buyers are likely to find the kind of detailed information an inspection provides reassuring—and are encouraged to give your home a closer look.
Get to know a house before you buy it
A home is a major investment and, for many people, the greatest financial asset they have. With so much at stake, it makes sense to do what you can to protect your financial interest. Getting an inspection is a smart, simple way to do just that.
When you make a written offer on a home, insist that the offer provide that your contract is contingent on a home inspection conducted by a qualified inspector. You’ll have to pay for the inspection yourself, but an investment of a few hundred dollars could save you thousands of dollars and years of headaches. If you’re satisfied with the results of the inspection and are assured that the home you’re purchasing is in good shape, you can proceed with your transaction, confident that you are making a smart purchase.
When does a home inspection make sense?
In addition to routine maintenance and pre-sale inspections, there are a number of circumstances in which a home inspection could greatly benefit a homeowner. If you are not sure, here are a few simple questions to ask yourself:
· Was your home inspected when you bought it? If not, an inspection would be beneficial even if your home was a new construction at sale.
· Are you an older homeowner who plans to stay in your home? If so, it makes sense to hire a professional who can inspect difficult-to-reach areas and point out maintenance of safety issues.
· Do you have a baby on the way or small children? An inspection can alert you to any potential safety issues that could possibly affect a growing family, such as mold, lead or structural problems. If mold or lead is present, be sure to rely on technicians or labs with specialized training in dealing with these conditions.
· Are you buying a home that’s under construction? You may want to hire an inspector early on and schedule phased inspections to protect your interest and ensure that the quality of construction meets your expectations.
What doesn’t your home inspection cover?
For a variety of reasons, some homes will require special inspections that are not covered by a typical home inspection. A specialty inspection might include such items as your home’s sewer scope, septic system, geotechnical conditions (for homes perched on steep slopes or where there are concerns regarding soil stability) or underground oil storage tank. If you have any questions about whether or not your home needs a specialty inspection, talk to your real estate agent.
Hire a professional
If you decide to hire a home inspector, be sure they’re licensed in your state. They should be able to provide you with their license number, which you can use to verify their status with the appropriate government agency. It’s also helpful to ask for recommendations from friends and family members. Even among licensed and qualified home inspectors, there can be a difference in knowledge, performance and communication skills, so learn what you can before you hire a home inspector to ensure that you get the detailed inspection that you want.
What to ask your home inspector
Ask the right questions to make sure you are hiring the right professional for the job.
What does your inspection cover?
Insist that you get this information in writing. Then make sure that it’s in compliance with state requirements and includes the items you want to be inspected.
How long have you been in the business?
Ask for referrals, especially with newer inspectors.
Are you experienced in residential inspections?
Residential inspection in a unique discipline with specific challenges, so it’s important to make sure the inspector is experienced in this area.
Do you make repairs or make improvements based on inspection?
Some states and/or professional associations allow the inspector to perform repair work on problems uncovered in an inspection. If you’re considering engaging your inspector to do repairs, be sure to get referrals.
How long will the inspection take?
A typical single-family dwelling takes two to three hours.
How much will it cost?
Costs can vary depending upon a variety of things, such as the square footage, age, and foundation of the house.
What type of report will you provide and when will I get it?
Ask to see samples to make sure you understand his or her reporting style. Also, make sure the timeline works for you.
Can I be there for the inspection?
This could be a valuable learning opportunity. If your inspector refuses, this should raise a red flag.
Are you a member of a professional home inspector association? What other credentials do you hold?
Ask to see their membership ID; it provides some assurance.
Do you keep your skills up to date through continuing education?
An inspector’s interest in continuing education shows a genuine commitment to performing at the highest level. It’s especially important in older homes or homes with unique elements.
Purchasing a home can be a complex endeavor for even the most well-prepared home buyer. You’ve diligently saved for your down payment, followed the market, researched agents and now you are ready to make an offer on your dream home. Don’t let these 5 “Deal Breakers” come between you and your new home.
Big Purchases on Credit. It is tempting to buy the furniture for your new home or a new car for the garage before the sale closes. Take care if you are making these purchases on credit. Large purchases on credit can have a major impact on your credit profile which effects your mortgage application. It’s a better plan to wait until after closing or pay cash for these transactions or you may be putting that furniture in a different living room than you originally picked them out for.
Overpaying. Before your bank will approve your mortgage they will appraise the home you are purchasing. If they feel you are overpaying they are likely to decline your mortgage application. If you find yourself in this situation consult with your agent on renegotiating your offer to be more in line with the bank’s appraised value.
Purchasing too close to Foreclosure. If you are making an offer on a house which is facing foreclosure be sure to have a closing date set before the foreclosure date. Have your agent work with the lender to structure closing before the house goes back to the bank and into foreclosure.
IRS liens. You’ve heard the old saying “Death and Taxes”. Back taxes and liens can derail your attempts to get financing for a mortgage so be sure to have your books in order before filing your loan application.
Comprehensive Loss Underwriting Exchange (CLUE). CLUE is a database of insurance claims for both people and property. Your home insurance rates are determined by the information about you and the property you plan to purchase which is contained in this report. Past claims for water damage, falling trees and even dog bites from present and past owners can multiply your insurance rates. Consult your agent about the CLUE report for your future home as soon as possible once your home purchase offer is accepted.
When purchasing a home there will be challenges which you can plan for and the unexpected hurdles. By educating yourself as a consumer and choosing a well trained real estate agent you can avoid many of the pitfalls of 21st century home ownership.
What about you? Tell us if you have had any “deal breaker” experiences.
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