As you should already know, a home inspection is a key part of the real estate process. Of course, your home inspection is only as good as your home inspector.
Finding a Qualified Home Inspector
If you are considering buying a property, you absolutely must get a home inspection. What most people don’t realize, however, is it can also be valuable to retain one before you sell a property to identify any problems before your accept an offer. Fixing such problems before hand makes a lot more sense than panicking in the middle of escrow.
Regardless of your particular position in the real estate process, the home inspection is only as good as the inspector. Frankly, some inspectors are less than credible when it comes to qualifications and their background. To bypass these individuals, the following organizations should be used as a resource.
The American Society of Home Inspectors, Inc. is located in Des Plaines, Illinois. Known as ASHI, it was founded in 1976 to create a resource and quality control atmosphere for home inspections. You can get referrals to ASHI inspectors in your area by contacting the Society at 800-743-ASHI. In doing so, you will avoid hacks calling themselves inspectors.
The National Association of Certified Home Inspectors is another credible organization. Located in Valley Forge, Pennsylvania, the Association maintains both a code of ethics and strict standards of practice for its members. With over 9,000 members in North America, you can find an inspector in your area by calling 1-877 FIND-INS.
Another organization that stands out in the home inspection industry is the National Association of Home Inspectors, Inc. Located in Minneapolis, Minnesota, the organization also requires members to abide by strict practice standards and a code of ethics, which should be comforting to you. You can contact it to find a home inspector in your area by calling 800-448-3942.
The old cliché is garbage in, garbage out. By using a credible home inspector, you can put this cliché out of your mind.
It’s easy to find a real estate agent. Just put a for sale sign in the yard and wait for the phone to ring. The question is, how do you find a GOOD real estate agent? You can start with newspaper.
Pick up the Saturday or Sunday paper – whichever day they have all the homes for sale in your area. You can also collect a few real estate guides to look through. Browse the listings to find properties similar to yours. If you are selling a cabin, you want to look for cabins for sale. If you are selling a lakefront mansion, look for those.
When you find similar properties, note the names and numbers of the agents that are selling them. The idea here is to find a real estate agent that has experience with your type of property. An agent that has all the million dollar homes may not be the best to sell your mobile home, for example. You want agents that have sold or are selling several properties like yours.
What To Ask A Real Estate Agent
1. When you call the agents – and it’s best to call several – you want to verify that they do have experience selling properties like yours. Ask for examples.
2. Ask what they do to market a property. Any agent can place an ad and put your home in the multiple listings. Do they have existing leads – people looking for properties like yours? Do they let other agents know about your property?
3. Do they show their listings very often? Many agents just list real estate for sale and let others sell it for them. It’s more profitable for them, but not for you. If they are a good salesperson, you want them to be going through the house with potential buyers.
4. Do they do their own closings? Again, it may be better for them to delegate this part of the process, but it isn’t better for you. You want the same person to be there through the whole process. You want one person to call. Things go wrong all the time in real estate, so don’t complicate it further by having more people involved.
Most real estate agents will probably argue these points. That’s okay, but be aware that there are other things they won’t tell you too. For example, did you know that open houses are primarily a prospecting tool for real estate agents? In fact, new agents (not the listing agent) are often given the job of hosting your open house, so they can find buyers to work with. It isn’t expected that they will sell your house in the process.
Also understand that when you see ads for homes for sale, and they don’t have prices, it is a prospecting technique. When that buyer looking for a $100,000 home calls on your $300,000 home, the agent isn’t going to make him able to afford your home. The whole point was to get him to call so he could sell him ANY home. Meanwhile, other potential buyers for your home skipped over the ad – there are enough homes WITH prices to look at (insist that ads for your property have the price listed).
Trust your intuition when choosing an agent. If you don’t feel comfortable with an agent, it’s possible potential buyers won’t either. And ask the right questions. You don’t just want to find a real estate agent you like. You want to find the right agent for your property.
If you have chosen to renovate your home then you know the price can easily exceed your predictions. Home renos tend to have what is known as “scope creep.” This is when the renovations start and as they progress new things or problems cause there to be more work than originally predicted. This can be difficult to deal with is funding is limited so its a good idea to build contingencies into your financing plans right at the start. That way when the surprises pop up, you will be ready for them.
When thinking about renovation financing there are two likely candidates for you to consider. The home equity loan and the home owner’s line of credit. The amount available for a home equity loan is based on the amount of equity that you have built up in your home. This loan is sometimes referred to as a second mortgage. It is calculated by taking the value of your home and subtracting the amount left outstanding on the original mortgage. If you own your home outright, then the amount would be the home’s value. As an example, if you have a home that is worth $250,000 and you have already paid off $110,000 then your accumulated equity would be $140,000. The value of the property is what guarantees the loan so the interest rate is low as well as they payments. It is also normal to be able to secure fixed interest rates for such loans.
The other popular financing option is the home owner’s line of credit. This loan does not have a finite amount save for the limit which is once again decided by your equity. This is a popular option as it allows for a lot of room when considering costs. The loan operates much like a credit card, with a variable interest rate. This is certainly the most flexible of the options and does not have a definite end date. The line of credit remains open for as long as you need it and do not close it out.
The best way to discern which type of loan is proper for your needs is to confer with a financial expert or banker. Prioritize your needs and try to find a loan that is tailor made for you. Remember that your home is going to be on the line as collateral so be sure to plan your payment schedule carefully and within what you can afford to pay. Make sure that you research all your options here and find what work s for you and for your budget.
The process of purchasing a home via FSBO can be somewhat different than most home buyers are used to. The actual act of buying a FSBO can be much more involved than most people think. That is not to say that the process cannot be successfully completed, quite the opposite in fact. It can also be extremely rewarding as a good deal of money can be saved if the deal is handled properly. If you are planning on buying a home that is being sold by the owner, spend some time and research the home buying process, not only is this simply a good idea in any home purchase, but it will also help you to be a more informed buyer in the future.
One thing that you should always do when purchasing a home for sale by the owner is to investigate your financing options well ahead of time. There are a number of financing plans specifically designed to service the FSBO industry and you should definitely try to locate a financier that can supply this service. In locating a lender that supplies this kind of financing, they will likely also supply or recommend a service to help you through the closing and contracts that are involved with the sale. Be sure that you have a good lawyer on your team as well. They are the best people to handle the legal matters during the closing of the home. This includes things like title issues, any outstanding liens or easements and the actual conveyance of ownership.
Remember to be careful when purchasing a home and if there are any questions about the sale or the process don’t hesitate to contact someone who is a professional in the matter. This is an important purchase and you want to be sure to get the best deal possible and to be happy once the process is complete. Maybe you can even use the money you save to do a renovation or two if the mood takes you!
Jun
28Final Walk-Through – The Value of Your Contract
Posted By: Ramon Rivas on June 28, 2010 at 11:14 pmA walk-through is an important step in a real estate transaction. To get the most out of it, make sure you understand the terms of the purchase contract.
Check Things the Contract Specifies
When you signed the contact to purchase your new home, certain elements and characteristics were specified. If the home does not match those elements on the walk-through, the contract will give you leveraging position. Consider the following:
If there’s a hole in the wallboard caused by the leg of a table going through it when the seller was moving out, the house is not in substantially the same condition as when you wrote the contract and the wallboard was intact.
If you fill up that lovely, large Jacuzzi tub and the jets won’t work, there is a problem with the working systems of the home. If you start the dishwasher, and it leaks before the cycle is finished, that appliance is not in normal working order. If all the surface burners on the stove won’t light (if gas) or heat to red hot (if electric), ditto. If the heat or air conditioning won’t come on, we have another problem with the working systems.
Allow yourself enough time to really pay attention and check on things. Usually an hour to an hour and a half is enough. Don’t have a chip on your shoulder. Do be a good business person and systematically check.
If your contract calls for something you can’t easily judge and it requires a third party to do it (such as the HVAC service mentioned above), you can request a copy of a paid bill at settlement. This is usually sufficient indication that the work has been done, and you know whom to call if there is a problem.
What If You Find a Problem?
Settlement may, or may not, be delayed if a problem is discovered. If it’s small and something you can easily fix, you may just want to ignore it. If it is something expensive and extensive, you probably don’t want to ignore it. Many approaches are possible, but my inclination would be to go to the settlement table anyway and request that enough money be set aside in an escrow account held by a third party (not the buyer or the seller) to fix the problem. I’d pad the amount a little to be sure there’s enough. Those funds could then be used to complete the needed work and then the balance released to the seller.
If the seller is not willing to accept the idea of funds in escrow, I’d request a delay of settlement until the work has been completed. The terms of such a delay need to be spelled out in an addendum to your contract.
Setting out to use walk-through to change the terms of a contract is not fair. However, if a walk-through shows that the terms of your contract have not been met, you need to figure out how to get things back on track and are behaving appropriately when you do so.
Most walk-throughs go smoothly. Let’s hope yours is one of the smooth ones.
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