Buying a Home 101 series – Week 9
This step-by-step series will take you through the entire home-buying process — from finding a buyer’s agent to settlement day, and all the details in between. Every first-time buyer will find this information-packed series easy to follow and understand. Make sure to tune in for the next few weeks!
You don’t want any nasty surprises after you move into your new home, right?! Getting a professional home inspection is one very important step you need to take once you’re under contract.
Your home inspection should be ordered as soon as you are under contract, so that there is plenty of time to receive the results and negotiate repairs or credits if necessary. Once you have the results, you may ask for repairs, renegotiate the price, or even cancel the contract if needed. This all needs to be done during the due diligence period. Remember, due diligence is non-refundable, earnest money is refundable until the due diligence date (aka the end of the due diligence period).
No home is perfect but at least a professional inspection gives you some guidance on what you are facing. Only you can decide what you are willing to accept or undertake if you decide to buy this home.
If any red flags arise, then you’ll need to decide what is a deal breaker for you and what is okay. Your agent should help you navigate the report. The inspector’s job is to point out everything that they see that is not perfect. The report can be quite long, especially on older homes. Some of the items may be cause for concern, such as faulty electrical wiring, and others may be an easy fix you may choose to ignore, such as a loose door handle.
Most of the time, I advise my client buyers to focus on the big items in the inspection report that we could not have known about when looking at the home or by what is included in the listing. It’s ultimately up to you what you ask for. I have found in my experience that most sellers do not want to make a lot of repairs and can be reasonable, but they do not generally react well to a laundry list of small repair requests.
Also, in NC you can ask the seller to repair items, or you can ask for a credit for certain repairs in the inspection report. Again, which is best for you depends on the situation. Oftentimes, I prefer the credit, because then I know that the repairs will be done to my buyer’s specifications. However, that is not always possible. Sometimes repairs need to be made before closing, in which case the buyer should ask the seller to make the necessary repairs.
Here’s a rundown of what to expect:
Make sure you hire a reputable and experienced inspector. You want to find someone who is highly recommended, works full-time in the field, and is affiliated with a professional organization. Also look for someone who is familiar with local building codes and also with the type of construction and age of this home. If you’re working with me, I’ll order the inspection for you, either using your inspector of choice or one who I have worked with in the past.
Items to Check Off
A home inspector will visually inspect the physical condition of the home and its major systems. A standard checklist usually includes: heating system; cooling system; electrical system; appliances — kitchen/bath/laundry; plumbing; chimney; framing/structure; foundation/basement; drainage; roofing; and garage.
What to Expect
Keep in mind that inspectors look for deficiencies that are in view and won’t pull up carpet or look for any other hidden defects.
You can ask the sellers for permission to remove carpeting or paneling if something seems suspect. Also, if the inspector has serious concerns about a specific element, then you may need to hire an expert – such as a structural engineer, HVAC contractor, or plumber — to give you a more thorough evaluation.
If a home is vacant, make sure the seller has all of the utilities turned on during the inspection so the inspector can see how they operate. You don’t want to incur the cost of a second trip out to your home!
Time and Cost
On average, a standard inspection can take 2 to 4 hours depending on the size of the home and costs about $450-$650. Ask to be one of the first or second appointments of the day, so you have a “fresh” inspector who will take time at your home. Most turn the report around within 24-72 hours.
For an additional fee, some inspectors may include items such as wood destroying insects, rodents, mold, fences, pools, spas, sprinkler systems, septic tanks and also environmental services, including testing for radon, lead, asbestos, carbon monoxide, and formaldehyde.
Usually, a specific license is required to inspect these items so check to see if your inspector can handle them. If not, you will need to bring in an expert if you have any concerns.
Show and Tell
Having an inspection is a great opportunity to gain some first-hand knowledge about the home you are about to purchase. If you can, accompany the inspector during the inspection to take advantage of his/her expertise and find out how the home functions. I recommend going for the last hour or so, so that the inspector can get the bulk of the work done. If you can’t attend, the inspector should be able to go through the report with you in detail over the phone, and answer any of your questions.
During an inspection, you will see what type of systems exist in your home and their condition. You also can learn how to maintain them, which can be a big help as a new homeowner and for keeping up the value of your home.
It’s a good time to ask questions so you understand your home AND the inspection report you’re about to receive.
After the inspection, you will receive a signed report that summarizes what was discovered. This report is your property and no other party is entitled to see it. Ask if you will receive the report on-site or if it will be emailed to you.
Remember, it’s important to understand that an inspection is not a warranty since it is limited to what is visually accessible at the time of inspection. Many inspectors carry errors-and-omissions insurance but their contracts often limit their liability to a refund of the fee.
Take the time to carefully review this report and reconcile it with the seller’s disclosure statement. If nothing is amiss, you can go forward with your purchase.
However, if the inspector discovers some defect, you now need to make a plan of action to resolve the issue or just cancel the contract.
Red Flag Alerts
Some red flag issues are hidden and hard to see at first so make sure your inspector keeps a keen eye on the following:
•Lack of general maintenance. A home that hasn’t been properly taken care of for many years could have major issues – such as water damage — lurking. That’s when due diligence is especially needed during an inspection.
•Too many issues in a home that isn’t old. Some issues are typical for a home’s age and location and not the sign of poor construction. For example, you may not mind a fixer-upper that has “good bones” located in a certain neighborhood. However, you do want to steer clear of a home that isn’t really that old for the amount of work it might entail.
•Do-it-yourself additions or any DIY work that isn’t up to code. If the addition looks awkward and cheap, it probably is and could be detrimental to the home when you want to resell. Or, you’ll need to factor in the cost and time to tear down and rebuild properly.
•Termite infestation. This can wreak havoc on a home so you’ll need to determine how bad it is AND how much it will cost to fix and prevent in the future.
•Moisture in the crawlspace. This can mean a few things: the home’s grading has some issues, flooding occurs during rain or storms, and/or you have the potential for mold and rotting floor joists. There are ways to mitigate for moisture in the crawlspace, and this is a common issue in our area. It may require a separate inspection and estimate for remediation. You just want to make sure you are very clear on what the potential repairs and remediation may be. It could be a small issue or a large one.
•Water marks on the ceiling or walls could signal a leaking roof, gutters rusting, or faulty plumbing. These can all lead to wood rot and other possible destruction. All can be fixed but you’ll need to determine the extent of the damage. Or this could be a sign of past issues that have already been resolved – you’ll need to find out.
•Cracks in the wall and sloping floors. These indicate possible structural and foundation issues, which can be costly depending on the age of the home.
•Toxic materials in homes built before 1976 such as lead paint or asbestos (found in some building materials). Factor in containment and professional replacement costs before you buy!
•Faulty and outdated wiring. This can be a serious fire hazard so inspectors should check for overloaded circuits and proper grounding.
•Polybutylene used in plumbing. This was a common material used in the 1990’s in our area, and has since been banned from use. Common household chemicals can deteriorate polybutylene and cause major plumbing leaks. It is a material fact to be disclosed in our state, but sometimes sellers are not aware, as they may not have had any issues. Sometimes it’s fine, sometimes it’s not – you just want to make sure you are aware so you can decide how best to handle and factor in any associated costs.
If something was red-flagged in the report, you may need to hire an expert and get some estimates for needed repairs before you can move forward with the sale.
Knowing what you’re willing to fix or not fix is important. Talk to your agent, family, or friends and also call a contractor to discuss which defects are minor or not.
For some items, it could be a simple solution. A trip to the hardware store may be all that’s needed. Get a list of those items you want to fix yourself and price it out.
If you want to go ahead with the sale, you’ll need to decide if you want the sellers to fix it themselves or offer as credit. If you have a choice, sometimes it’s smarter to hire your own contractors and supervise repairs.
Before issuing a formal request to repair, consider the seller’s incentive to hire the cheapest contractor or to replace appliances with the least expensive brands.
As always, I’ll be right by your side if we decide to embark on this homebuyers journey together, so don’t worry too much about home inspections right now—you need to find your home first and go under contract. I’m just letting you know what to expect along the way so you feel more confident with each step. Stay tuned for next week’s Review Those Condo Docs! Purchasing a condo unit is like you’re buying into a business. You need to determine how stable and financially sound this “business venture” is before taking it on.
Hi, I'm Kim Crouch, and I help people who want to live in Wilmington near Wrightsville Beach, and aren't quite ready to move yet, figure out how to buy their NC coastal home now.
1001 Millitary Cutoff Rd Suite 101
Wilmington, NC 28403
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