You've heard it before. Someone you know bought a house without a home inspection and got a big surprise. Over 40 percent of the previously owned homes on the market have at least one serious defect.
Don't take over someone's problem. Most "used" homes need some type of attention. Be sure you are aware of any major problems in a house you are considering purchasing, and what it will take to correct or repair the situation. Here are some of the more serious defects to watch out for:
1.Insect infestation -- termites, ants, etc.
2.Chimney settling or separation
3.Foundation cracks
4.Major house settlement
5.Cracked heater exchange
6.Failing air-conditioning
7.Hazards including lead paint, radon, water contamination, asbestos, and underground storage tanks
8.Moisture in the basement
9. Defective roofing and/or flashings
10. Mixed plumbing (example: copper mixed with steel)
11. Electrical system with undersized capacity
12. Aluminum wiring
Although most of these problems can be repaired, depending on the specific problem, the cost can be substantial. The cost could become a factor in whether you ultimately buy the house. If you enter negotiations to buy a particular house, your agent should advise you to provide a provision in your contract for renegotiating or backing out of the contract if a home inspector finds major problems.
Be careful before you involve your mortgage lender when in negotiations. Often, they will insist on certain repairs being done prior to you closing, no matter what. Anything that is an imminent health or safety issue is almost always required to be done prior to closing. Generally, mortgage lenders will not allow a seller credit back to the buyer for repairs. Here are a few ways to negotiate repair problems. Sometimes a combination is the best way to go.
1.Have the seller complete the suggested repairs prior to close.
2.Lower the purchase price by the cost of the repairs needed.
3.Have the seller pay for your "non-recurring" closing costs at the close. These includes points, origination fees, title fees, appraisal and more. They cannot include things that recur, such as homeowner's insurance, mortgage interest and property taxes. Again, the credit is the cost of the repairs or non-recurring costs, whichever is less.
4.If the repairs cannot be completed before the close of the purchase, ask the mortgage lender to consider a seller "withhold". That is money held in escrow equal to 1.5 times the cost of the repairs. This money is released when the repairs are completed, with the balance going back to the seller.
A home inspection usually costs between $250 and $400. Hire a qualified inspector. Your Realtor or lender should be the first people you ask for a referral. You can try to get referrals from people you know who have had a satisfactory experience with a home inspector. Look for affiliations with organizations like the American Society of Home Inspectors or the American Association of Home Inspectors. When you make an appointment with a home inspector, you should accompany them during the inspection.
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Such good advice...always have answers BEFORE, not after!
We appreciate the note. Thank you for noticing. All the best!