Monthly Archives: October 2015

New Home Construction – The American Dream or The American Nightmare?

Buying a new home is suppose to be the American Dream. Unfortunately, for many buyers of newly constructed homes it becomes the American Nightmare. Hiring a qualified third party home inspector can increase you chance of a hassle free home.

One only has to visit sites like Homeowners Against Deficient Dwellings (HADD)- http://www.hadd.com or Homeowners for Better Buildings (HOBB) – http://www.hobb.org to see how widespread shoddy construction is in the industry.

No area of the country is free from shoddy construction.

In my job as a Professional Home Inspector I talk to hundreds of people each year about new home construction. It still amazes me that many believe the city inspector will find every item wrong with a home. Nothing could be further from the truth!

A city inspector inspects for code violations. The building codes are the MINIMUM standards that a home should be built to. City code inspectors only inspect for safety and health issues as they relate to building. City inspectors do not inspect for the quality of workmanship! City building inspectors also have no liability. If your home falls down and hurts you the day after you move in, you can not go back and sue the building inspector because he missed code violations.

In Houston, the area I inspect in, the city building inspectors spend about 10 to 30 minutes in a home inspecting it. At the end of their “Inspection”, they will then place a green or orange 3×5 sticker at the front of the home. The Green sticker says you passed, the orange or red sticker says the home failed.

There is no way that a city building inspector can note all the discrepancies on a home on a 3×5 sticker!

The new trend is for builders to advertise that their homes have been inspected by a “Third Party Inspection Company.” This is like listening to a used car salesman say he had his mechanic check your used car out before you bought it.

If the company the builder hires becomes a nuisance by continuing to find problems, then a new company will be found who can inspect the homes the way the builder likes.

Wise and prudent home buyers will research their builder before deciding on one to go with.

They will also start doing their research on finding their own third party home inspector to inspect the home as it is being built.

What are some things you should look for in a home inspector?

To start with, not all home inspectors are created equal. Look for a home inspector that is a member of the American Society of Home Inspectors (ASHI) – http://www.ashi.org. ASHI is the nations oldest and largest home inspection organization. They have strict membership requirements in place and not any ole inspector will be accepted.

Next, make sure the inspector you choose is Code Certified. Many areas of the country have now adopted the International Residential Code (IRC) as the model building code. Check with your local municipality to determine which model code they enforce and adjust your search likewise. You can find a Code Certified IRC Inspector by going to http://www.iccsafe.org.

Ask the inspectors on your narrowed down list for sample inspection reports. You’re looking for a home inspector who writes narrative type reports and who will include code numbers or the code itself when he finds them. I’d avoid inspectors who say they use an onsite “checklist” type of report.

Call or meet the inspector. You’re looking for someone who is knowledgeable and who can communicate well. If you talk to an inspector and have trouble understanding what he’s saying, it’s likely his report will be hard to understand as well.

Ask for references. Have the inspector send you several references and follow through checking them out.

Ask questions. Ask your inspector if he/she will come back out and re-inspect after the builder says all the repairs have been made. Some will, some won’t. Expect to have to pay for a re-inspection. Ask the inspector if he will communicate with the builder after the inspection if the builder has questions. Good inspectors will take the time to go over the report via phone or in person with the builder to ensure that all needed repairs are made.

As a home buying consumer, it’s your responsibility to ensure your home is built correctly. Not the builder, not the State, County or City. Hiring a qualified and reputable home inspector will go a long ways in helping you obtain a problem free home.

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Why Do Realtors Advertise Your Home in Print,on the Radio, on Television, etc.?

Why Do Realtors Advertise Your Home in Print,on the Radio, on Television, etc.?

Realtors represent a huge part of the national advertising expenditure each year in newspapers, magazines, radio and television. Every seller would like to see their home in a large, impressive ad. The seller wants the Realtor to run the ads large and constantly until the home is sold. Realtors on the other hand know, if they keep good records, that few buyers purchase as a result of any print ad. The advertising is done to find a person, any person, who is seeking to purchase some sort of property at some price. A prospective purchaser may call on a large, expensive, waterfront home and end up buying a small cottage in the country.

Prospective purchasers sometimes come to our area and pick up some, or even all, of the local papers and sales periodicals of all sorts. At last count I found 29 different newspapers, magazines and real estate sales sheets that promote real estate in our local and surrounding areas. As a buyer is going through the several hundred real estate ads, that buyer then decides on perhaps a dozen to call about. That buyer is only calling to find out which property to eliminate from his list of possible purchases. Most of the time the prospective purchaser will eliminate all of the properties he calls on or all but one or two. For this reason the expensive ads bring in very few calls and far fewer appointments to show properties. Add to this the fact that sellers who want too much money, want the most advertising.

Here is a little inside trivia for you: the average cost per phone call from print advertising is well over $5,000 per call in our area. More than 80% of those calls will not give a phone number or contact data. And most of those calls are not qualified, ready, willing, or able to buy the property they call on. Shocking isn’t it? I kept the records for two years for a 55 person office recently and the cost of print advertising to get ONE purchaser as a direct result of the ad was over $100,000… perhaps well over that because we only had two in two years so that is not a big base to support an average upon.

The average percentages for this area are that for every four thousand dollars in advertising expense, of any kind, a Real Estate agent can expect 1 to 5 calls, if the ad is well presented and if the property is priced right, and advertised with full particulars and it’s in one of the most popular areas.

As a general rule for each 10 calls received the Real Estate agent will set 1 to 3 appointments – seldom is that appointment set for the property that was called on. And then the very best agents will be able to convert 20% of the appointments into sales. So let’s see how this works out in a budgetary sense. The most effective ads on the most popular properties which are priced the most attractively; can result in twenty thousand dollars in ads obtaining perhaps 20 calls, resulting hopefully in 5 appointments and five appointments to get one sale. What a dream this business would be it that were always and predictably true. Most ads, no matter how big, beautiful and attractive get no calls, therefore no appointments and no sales. And, if you remember your math, zeros don’t average well. 🙂

So why do Realtors spend so much money on advertising. The most important reason is that sellers demand to see their property in the paper – hopefully in a large ad and in every paper until it’s sold. In fact it is well known that the more overpriced the property is, the more the seller wants it advertised and the less calls are obtained. The Realtor wants to advertise only the most attractive properties that are the most attractively priced. However, we all know that the bigger the ads and the more advertising that a Realtor does – the more the sellers like it and the more they want to be affiliated with the most well advertised Realtor. Thus the Realtor gets more listings, not more sales!

Most properties are sold because of the MLS and a response from one of the other Realtors, or from a Web Site, OR in more rare cases, the real estate agent calls, writes or speaks to someone about the property that is for sale to someone that the real estate agent has been working with, often a customer the Realtor has been working with for weeks, months or even years.

Real estate agents spend most of their time and energy repeatedly getting back to prospective customers, contacting those who have already looked at properties and found nothing they like – to tell them of a new property and contacting other Realtors to alert them or remind them of a property for sale. We also send out thousands of postcards, letters, and e-mails. The more successful agents may have as many as a dozen people behind the scenes just sending out communications, of various sorts and constantly following up, with the intention of keeping the one senior partner, the visible selling partner busy with appointments.

Each ad, letter, postcard, call, e-mail or personal contact can be called a “Presentation Impression”. It takes several thousand “presentation impressions” as we call them for each appointment and tens of thousands of these presentation impressions per sale.

One of my close friends sold her own house. It took her about a year, holding an open house almost every day, advertising it frequently in the various papers and presenting her home one way or another to perhaps three thousand people in the process. She is quite a good salesperson, her home was very attractive, very well located and finally sold as the market came up PAST the price she was asking for the home.

She found out after she sold it that there had been such unusual appreciation for homes like hers in her neighborhood that she actually sold her home about 15% too cheap after all that time and work and expense. She LOST over $30,000 in sales price in order to save $4,000 in commissions. Although she loved meeting all those people and showing them through her home; she would have saved over a year’s mortgage payments and gotten about 15% more for her home if she had listed it with a local Realtor.

She probably won’t use a Realtor the next time either; she loves selling her own home – it’s like one long house party for her, in my opinion. More power to her! I suspect that with the signs, ads, and those she met at the open house every day – she may have set a new record for the most number of presentation impressions for one house sale. But, then she had no other home she could sell to those who came ready to buy a home and didn’t fit her home. From listening carefully to her talk about her advertising, she spent about 8% of the total she got for the home in newspaper ads, more than the commission would have been. We won’t count her time, she loved showing her home to all those thousands of people!!! She didn’t use a realtor, saved about $4,000 and it cost her at least $50,000 to save the $4,000.

Realtors advertise to find sellers more than buyers, when they use conventional means of print, radio, TV, etc.

There is a new game in town however. Web marketing. Advertising on the Internet with a PROPERLY DONE, Real Estate web site is the most effective way to find buyers we have ever had. Realtors, for that reason, are the second highest user of the Internet.

The most effective real estate web sites have lots of pictures, lots of information and are the most user-friendly to the Internet visitor. Although it is very expensive to have an effective web site – most of that expense is in hours rather than money. Only about 2% of the real estate web sites are effective – actually it looks to be like less than 1% of all the real estate sites that work for the Realtor… according to my observations and experience.

Few Realtors spend the time and money to give the buyers what they want. We hope we are giving our prospective sellers and purchasers what they want to see in every way. We get 2 to 10 emails and about 20 calls a day about our properties and many of them result in appointments to see the exact property they have reviewed on our site. Because we have all the data, maps so they can drive by and numerous pictures of the inside.

If YOU can figure any way that we can be more helpful and better for our prospective purchasers please take a look at the rest of our web site and check it out thoroughly. Write me and let me know if there is something you feel we can do better to help you make a property selection or feel more ready to purchase.

We wish you all the best, and thanks for taking the time to read this.

Buying A Foreclosed Home Or Property – A Wise Decision?

Foreclosure as the name suggests means a situation in which a homeowner or a mortgager is unable to make payments of principal and/or interest payments on his or her mortgage, so the lender, be it a bank or financier, can confiscate and sell the property as per the conditions in the terms of the mortgage contract. A home that was kept mortgaged becomes a foreclosed home when the owner of the home is unable to or unwilling to release his/her mortgaged home by paying his dues.

The first stage of a foreclosed home is pre-foreclosure that happens when the home owner has missed his/her one payment and is thus considered overdue on the loan. A formal cautionary letter or notice is then sent to the homeowner based on which he/she will have to react at the earliest and make the due payments. In such situations, most of the time foreclosure home owners are driven to sell their home or real estate property to home buyers for fast cash.

Quick and easy sale of home or real estate property for cash is always advantageous for home sellers. Foreclosures can in some cases benefit a seller who will either get paid in full at the foreclosure sale or get the house back to sell again for a second profit. Most of the house sellers are always in a look out for a better deal when they are trying to sell their house for fast cash. The main advantage that the home sellers get is that they can appeal to the large number of home buyers by accepting the greatest number of financing plans.

Also for home buyers, the main advantage behind buying a foreclosed home or real estate is financial savings. Buying a foreclosed home at a foreclosure auction will be much cheaper than under normal context. Buying the foreclosed or pre-foreclosed property by paying less will allow the home buyers to do some investments in its betterment and/or selling it at higher price than it costs. It is a general belief that on an average a home buyer saves up to 30% to 40% when buying a foreclosed property or home.

Along with advantages, there are also some disadvantages in buying a foreclosed home or property. For home buyers, the condition of the interior of the home usually remains undiscovered. Home buyers always tend to buy the foreclosed home or property at a very low market price so that they can afford to spend some amount in doing some restoration or repair work.

There are various ways to invest in foreclosed properties. The most popular way is by purchasing a real estate property or house and then giving it on rent to create a positive monthly cash flow. The second popular way to earn money is to search out foreclosures, buying them, investing in repairing and remodeling and then selling them at a high price. The third way is to purchase a nice foreclosure that is under priced and sell it immediately at a higher cost.

Over the years, it is empathized that buying foreclosed homes is very remunerative. Foreclosures are on the rise and people are unable to retain their home any more. They are anxious to sell their homes quickly before they are foreclosed on. With more and more homes popping up for sale, home buyers will have enough to choose from. Home buyers can pay fast cash for homes that are foreclosed or going to be foreclosed; thereby helping the mortgager to ease out his/her stress.

In today’s fast paced lifestyle, many people are lagging behind on payments. Plenty of people are facing financial problems. So, if you are encountering foreclosure or a pre-foreclosure, trying to relocate or transfer job, divorce, multiple mortgage, or just need to sell your house fast, there are many home buyers who will simply solve your real estate issues or your foreclosure problems and provide you with a fast cash offer on your house. Normally to ensure your fast closing.

Model Home Secrets to Getting Your Empty Home Sold in Six Weeks or Less

If you are trying to sell an empty home, you may have found this to be a blessing and a curse.

An empty home is easy to show. Buyers might like that fact that they can move right in. Potential buyers might even have an easier time seeing themselves in the home.

On the other hand, an empty home may feel cold and impersonal. Buyers are looking for a home that they can fall in love with. Even if your home is the nicest home that they buyers look at, if they don’t “feel the love”; they will probably buy someone else’s home.

How I got started staging homes

I started staging homes several years ago. I had gotten my real estate sales license during a dreadful buyers market. The market was so bad that most well priced homes were taking six to twelve months to sell.

I started staging my new empty home listings after selling a home that had been staged by the owners. It was the owners second home and the decorations were perfect. This home sold and closed in six weeks! Not only that, but I had other buyers in the wings ready to buy, if the first buyers failed to close. I realized I was on to something.

I bought and studied a book called “Dress Your House for Success” by Martha Web. Her book helped me to figure out how to repeat the “six week home sale”, over and over again. The fast sales made my clients happy! The fast commissions made me happy.

I bought staging items which cost me about $300. Then I staged and empty home that I had listed for sale. Shazam! The home sold in six weeks despite the buyers market.

Home staging doesn’t always work as expected, but if the home is priced right and has enough showings, six weeks is my average time to sell an empty, staged home.

How you can easily stage an empty home so that it sells quickly

First of all, I make sure the home is sparkling clean. You want everything to look as close to new as possible. All chrome must shine. All stains, from every surface, must be removed. Windows, the window screens and window sills should sparkle. Touch up paint or repaint as needed. The flooring, including tile and carpet, must look and smell clean. Dust and cobwebs must go! Clean like you’ve never cleaned before!

An empty house can be staged without moving any furniture into the home. To stage my listings, I only have to move in four plastic boxes of light-weight decorative items plus several silk or plastic plants.
What I am trying to do is to create a “model home” look, but without the furniture. If you’re not sure what I mean, visit a few model homes. Model homes are a wonderful and quick education in staging. Ignore the furniture in the model homes, and instead concentrate on the decorations. Take a camera with you, to take pictures, if you want.

The following is a room by room description of the items I use to stage a home. You can decide where each item should be placed, and how many to use. Don’t over do it, but “stark” is not a good look either. All staging items must be new or look new. No exceptions! Make sure the silk plants are cleaned regularly.

Staging the front door:

o Place a brand new, fun door mat in front of the door. I buy a new one for each home I stage.

o If the door has a hook to hang seasonal items on, do so when appropriate.

o The front door area has to look neat and clean. Sweep the steps and side walk and wipe down the door if needed. Make sure the front door light and doorknobs shine. First impressions count.

Kitchen staging items:

o Place exciting and interesting kitchen towels and oven mitts that match the towels on the kitchen counter.

o I place veggie / oil filled decorative glass jars, grouped together on the counter.

o Silk plants and silk plants in baskets: one for the top of the fridge, more for on top of the cabinets, and if appropriate, one for the counter top.

o Decorative (empty) soap and hand cream dispensers.

o I have put together a gift basket (for decoration only) which I put on the kitchen counter. It includes all sorts of fun kitchen items, towels and knick knacks. I do this to add emotional appeal to the kitchen and home.

o Other interesting items to suit your tastes.

o I also replace any burned out light bulbs.

Bathroom staging items:

o Big, soft, fluffy new towels, large and small, tied up with raffia or decorative cords.

o Decorative soaps

o Matching soap dishes, toothbrush holders, cups etc. Buy some that are fun for the guest baths, and buy some classy, romantic ones for the master bathroom!

o Lots of candles and candle holders. Don’t be cheap on these. Get the nicest you can buy.

o More silk plants

o If you feel it will help, buy and use a new rod and shower curtain. I have done this before. You will know when and where to use these.

o I replace all burned out light bulbs. If the bulbs wattages are too low, I will replace them with brighter lights.

Items for the living room, the family room and bedrooms:

o Large and small silk plants placed to enhance nice areas or placed take the eyes of the buyer away from areas that you don’t want the buyers to concentrate on.

o More silk plants for any plant shelves.

o When ever possible I use classy wall art: framed pictures and posters, etc.

o I have also used rocking chairs, wooden rocking horses (kid’s room), pottery, and vases filled with dried plants.

o I have rented live plants for larger homes. Ten large, beautiful plants cost me $150/month. The plant company took care of the plants. This was well worth the cost. I can highly recommend this for adding to the emotional appeal of a large, empty home.

o Make certain that the curtains or window coverings are open and the windows are clean. I want the home to be bright and inviting. This helps to create a positive feeling to the home. In addition, the “drive the neighborhood” homebuyers can see in and decide if they want to get into the home! Every potential buyer counts.

The items mentioned are just a starting point for staging. I am continually adding more items and getting rid of items which have “aged”. So far over the years I have spent about $1,000 on staging items and now have enough items to stage two homes. I have made my investment back many, many times over.

I can highly recommend staging to both homeowners and real estate agents. Your home or home listings will sell faster and for more money.

Home Inspection Misconceptions

What To Expect: Home buyers sometimes buy their home in on impulse. Home inspectors can help home buyers avoid buyers remorse by reporting on home defects and problems before the home buyer finds them after closing. Professional home inspectors assist home buying clients with the tools they need to make an educated choice regarding the quality and condition of their potential new home. Home buyers must take care to hire the most experienced home inspector they can afford and make sure the person they hire has their best interest solely in mind. Inspectors who rely on realtors for referrals sometimes have moral dilemmas.

Buyers Benefits: A professional home inspection is the best way for potential home buyers to effectively evaluate the risks of a property purchase. A major concern of home buyers is being suddenly confronted with major and costly problems after they take possession of a property. A professional pre-purchase home inspection can reduce anxiety by screening for problems and itemizing them in a comprehensive report. This report may include approximations of repair costs and recommendations of useful upgrades to the property systems. The general result of a professional home inspection is that property buyers make significantly more informed purchases.

Screening for Problems: All homes have strong and weak points, they are not always what they seem. Gain the perspective and sound information you need to make better decisions with a home inspection performed by an experienced professional home inspector. A good home inspector works through a very long checklist of potential concerns to identify the major and minor deficiencies in the home. A good report will clearly describe the problems and illustrate them along with the what-to and how-to of repairs.

Provide Owners Benefits: Home owners who are planning to make improvements to their homes in order to increase its market value would be well advised to have it inspected first. A home inspectors can help prioritize home improvements and offer advice on the best ways to approach repairs. More importantly, an inspectors can help the seller identify potential or undiscovered problems before those problems become material for contract contingencies. By taking a pro-active approach one can avoid the frustrations many owners encounter when they are asked to renegotiate their contracts because of unanticipated problem areas.

Credentials: Like any other professional, home inspectors (even those with licenses) have varied degrees of expertise. All home inspectors should be carefully screened. Inspectors learn from experience. It takes a few thousand inspections and a more than a few complaints for a home inspectors to LEARN what it takes to satisfy clients.

Recently passed legislation allows New Jersey home inspectors to be licensed with as little as three weeks of class room training and just one week in actual homes. Licensing is a minimum qualification. Make sure you ask for resume! Belive it or not the standards in many states are LOWER!

Many people without specific home inspection credentials offer home inspection services. Likewise, credentials are not always what they seem. Engineering and architectural credentials alone do not prepare anyone to competently inspect homes and communicate the findings. A helping attitude, good communication skills, and mature judgment must supplement technical competence. Make sure you work with a company employing a contract which specifies both what is inspected and what limitations apply.

Additional services like the ones listed below are usually NOT included in the standard home inspection are available for an additional fee.

Code compliance: to determine what changes and upgrades are necessary for the home to comply with modern (or when built) building, fire, plumbing, zoning, mechanical and electrical code and to determine if the required permits and inspection were obtained when changes were made to the home.

Engineering analysis: structural, heating, cooling, soils, electrical, geological, site, investigate for latent structural defects or problems, evaluate the condition of playground equipment, determine if private waste disposal systems are functional, determine if cantilevers are safe, evaluate traffic density and noise, evaluate insulation efficiency, perform flood plain review and issue flood hazard certification, evaluate easements and encroachments, determine the quantity and cost of wood replacement made necessary by rot, age, water infiltration and insect damage.

Hazardous materials: to determine the presence or absence of: asbestos, lead paint, lead in water, formaldehyde, radon gas, lead paint, fungus, mold, mildew, water and air quality, toxic or allergenic substances, flammable materials, underground oil or fuel tanks and other environmental hazards.

Pest evaluation: to determine the presence of animal, rodent, termite, pest or insect infestation and to provide an opinion as to the cost of repairing damage caused from these infestations.

Pool and spa: to evaluate the necessary changes and upgrades to pools, pool equipment, gates and fences.

Plumbing: to determine the condition and necessary upgrades and repairs to the waste piping, main sewer pipe, supply piping, venting, shower pans and tub walls, lawn and fire sprinklers, water wells (water quality and quantity) condition of underground and under slab piping.

Electrical: to determine the condition and necessary upgrades and repairs to the electrical system, telephone system wiring, intercom system, security systems, heat detectors, carbon monoxide detectors, smoke detectors, provide circuit mapping, determine the electrical system capacity, adequacy of ground bonding, perform voltage testing, to evaluate electro magnetic fields, check voltage drops and circuit impedance.

Chimney sweep: check condition of flue, safety of wood burning stoves and perform level II chimney flue inspections as recommended by National Fire Protection Association.

Appraisal: determine the value of building and suitability for intended use, check zoning ordinances and provide an opinion on the advisability of purchase.

Mechanical contractor: determine the adequacy of the heating and cooling system size and provide efficiency measurement, provide an underground storage tank evaluation, perform heat exchanger leakage test, check the condition of evaporator coils, determine air flow velocity and balance system.

Appliance service person: test and calibrate oven and range temperature, test for microwave leakage, check to determine if appliances secured to floor as required.

Roofing contractor: more detailed evaluation of the roofing, flashing, chimney, provide tall ladder roof inspection and a detailed evaluation of the life expectancy of the roofing, feasibility of repair vs. replacement.

Home buyers are advised to make sure they check all of the following items carefully. If any of these problems after the purchase of the home the problems come with the home and they are now the YOURS (without costly litigation).

GENERAL

Were all your questions answered by the home inspector?

Were all your questions for the home owner answered in writing?

Have the previously agreed to repairs been professionally completed?

Have warranties and guarantees been provided for agreed upon repairs?

Were the home inspectors recommendations to have all recommended additional inspections and invasive inspections performed? If not open ended risks may be more than most buyers budgets can bare?

EXTERIOR

Check the operation of the windows and screens?

Has water been stopped from accumulating near the building?

Check doors, decks, siding, windows & fences for damage / deterioration?

Are there any signs of water infiltration from the roof, siding or windows?

Are there any signs of gutter or downspout problems?
Are the downspouts discharging water away from the foundation?

Has the soil around the home been pitched away from the foundation?

INTERIOR

Have all the areas listed in the home inspection report as inaccessible or not traversed been accessed & professionally inspected to determine if defects exist?

Do the garage doors and their openers function?

Was the reversing devices for the garage door openers tested?

Did you find out why any stains or cracks on any of the walls or ceilings that have become larger or have appeared since the time of the home inspection?

Have all cracked windows or mirrors been repaired?

Have all the clouded double pane windows been replaced?

Are all the permanently installed fixtures or appliances been in place and in good condition?

Are there any signs of birds, rodents or animals?
Has any damage to damage to the walls, floor or ceilings been repaired?

PLUMBING

Do the plumbing fixture faucets leak or drip?

Are the plumbing fixtures chipped or damaged?

Was water for a time through all plumbing fixtures and check for leakage?

Was water for a time through all plumbing fixtures and check for stoppage?

ELECTRICAL

Are all the light fixtures are all in place?

Do the light fixtures, switches and receptacles all function?

Does the door bell work?

HEATING AND COOLING

Do the thermostat, heating and cooling systems function?

Is there adequate air flow through the heating and cooling registers?

Did all the radiators or convectors get warm in a reasonable amount of time?

KITCHEN

Do all the appliances function properly?

Are the counter tops or cabinets damaged?

Do the cabinets and drawers operate?

Complete this check list during the walk through and go over it with your attorney prior to closing on the property Most inspection companies accept no liability for changes and problems that occur after the home inspection takes place. Please take the time to carefully and completely perform your pre-settlement walk though. Contact the home inspection company if there are any questions.

Michael Del Greco is President of Accurate Inspections, Inc. A New Jersey home inspection firm, has performed thousands of home inspections in New Jersey since 1993, taught the New Jersey Home Inspector Licensing classes and New Jersey Home Inspector CEU classes as well as participated in developing questions for the National Home Inspector Exam. The home inspector’s resume may be viewed at http://www.accurateinspections.com/michael2.htm

Home Inspectors – Negotiating a Lower Price

To help you negotiate a fair sale price for a home, it’s best to get an appraisal and inspection report. Even if you agree directly with the home seller on a sale price, you may want these items to safeguard the value of your new investment.

To hire a professional inspector, contact the American Home Inspectors Directory (AHID). The American Home Inspector Directory includes inspectors from all national recognized home inspector organizations. Including the American Society of Home Inspectors (ASHI), National Association of Home Inspectors (NAHI), or National Association of Property Inspectors (NAPI). A certified inspector checks a home for:
Structural components. This includes the foundation, floors, walls, columns, ceilings and roof.

Home exterior. This includes doors, windows, chimneys, decks, balconies, steps, drainage and driveway.

Plumbing. This includes pipes, sinks, drains, and bathroom fixtures.

Electrical system. This includes wiring and grounding equipment, amperage and voltage ratings, circuit breaker and lighting fixtures.

Heating and cooling systems. This includes boilers, thermostats, heat pumps, insulation, air conditioning, central controls, fans, ducts and filters.

An inspection report may exclude condition of paint, wallpaper, carpeting, household appliances and draperies. These are generally replaced by the buyer, whose tastes are likely different. You may also want a special inspection for pests, or for soil and drainage. Inspections generally cost between $250 and $500.

An appraisal is almost always required when you buy a home. However, if you disagree with the appraisal value, you can always order your own appraisal. You can find an appraiser through such organizations as the National Association of Master Appraisers (NAMA). Appraisals generally cost between $250 and $500.

Negotiating a sale price usually starts with you making an initial offer on the home. The initial offer is usually less than the seller’s listing price.The seller can accept, reject or ignore your initial offer. He can also make a counter-offer. A counter-offer is a concession to lower the price to meet your offer at least part-way.

After the first counter-offer, the buyer and seller may go through a series of counter-offers to arrive at a sale price (if agreeing at all). This means the spread, or gap, between listing price and initial offer gets narrower. Armed with your own appraisal and inspection report, you can make an informed offer and more effectively negotiate a final sale price.

Article submitted by the American Home Inspector Directory

What is a Home Inspection?

A home inspection is defined as an objective visual examination of the physical structure and systems of a home, from the roof to the foundation.

In layman’s terms, having a home inspected is akin to giving it a physical check-up. If problems or symptoms are found, the inspector may recommend further evaluation.

As a home buyer/seller or real estate professional, you have a right to know exactly what a typical real estate inspection is. The following information should give you a better understanding of exactly what your inspector should (and should not) do for you during the course of a home inspection.

First and foremost, an inspection is a visual survey of those easily accessible areas that an inspector can clearly see. No destructive testing or dismantling is done during the course of an inspection, hence an inspector can only tell a client exactly what was clearly in evidence at the time and date of the inspection. The inspectors eyes are not any better than the buyers, except that the inspector is trained to look for specific tell-tale signs and clues that may lead to the discovery of actual or potential defects or deficiencies.

Inspectors base their inspections on the current industry standards provided to them by their professional societies. These Standards tell what the inspector will and can do, as well as what the inspector will not do. Many inspectors give a copy of the standards to their clients. If your inspector has not given you a copy, ask for one, or go to the American Home Inspector Directory and look for your home inspectors association.

The Industry Standards clearly spell out specific areas in which the inspector must identify various defects and deficiencies, as well as identifying the specific systems, components and items that are being inspected. There are many excluded areas noted in the standards that the inspector does not have to report on, for example; private water and sewer systems, solar systems, security systems, etc.

The inspector is not limited by the standards and if the inspector wishes to include additional inspection services (typically for an extra fee) then he/she may perform as many specific inspection procedures as the client may request. Some of these additional services may include wood-boring insect inspection, radon testing, or a variety of environmental testing, etc.

Most inspectors will not give definitive cost estimates for repairs and replacements since the costs can vary greatly from one contractor to another. Inspectors typically will tell clients to secure three reliable quotes from those contractors performing the type of repairs in question.

Life expectancies are another area that most inspectors try not to get involved in. Every system and component in a building will have a typical life expectancy. Some items and units may well exceed those expected life spans, while others may fail much sooner than anticipated. An inspector may indicate to a client, general life expectancies, but should never give exact time spans for the above noted reasons.

The average time for an inspection on a typical 3-bedroom home usually takes 2 to 4 hours, depending upon the number of bathrooms, kitchens, fireplaces, attics, etc., that have to be inspected. Inspections that take less than two hours typically are considered strictly cursory, “walk-through” inspections and provide the client with less information than a full inspection.

Many inspectors belong to national inspection organizations such as ISHI, ASHI, and NAHI. These national organizations provide guidelines for inspectors to perform their inspections.

All inspectors provide clients with reports. The least desirable type of report would be an oral report, as they do not protect the client, and leave the inspector open for misinterpretation and liability. Written reports are far more desirable, and come in a variety of styles and formats.

The following are some of the more common types of written reports:

1. Checklist with comments

2. Rating System with comments

3. Narrative report with either a checklist or rating system

4. Pure Narrative report

Four key areas of most home/building inspections cover the exterior, the basement or crawlspace areas, the attic or crawlspace areas and the living areas. Inspectors typically will spend sufficient time in all of these areas to visually look for a host of red flags, telltale clues and signs or defects and deficiencies. As the inspector completes a system, major component or area, he/she will then discuss the findings with the clients, noting both the positive and negative features.

The inspected areas of a home/building will consist of all of the major visible and accessible electro-mechanical systems as well as the major visible and accessible structural systems and components of a building as they appeared and functioned at the time and date of the inspection.

To locate a home inspector near you go to the American Home Inspector Directory a national database of home inspectors. Their directory list home inspection companies by state or zip code. Search for you home inspector is free. They have members from ASHI, NAHI. ISHA and independent inspection organizations.

Top Tips for First Time Home Buyers

Advice to Help When You’re Buying a Home

First time home buyers might feel better to know that they’re not the only ones who feel confused about the process of buying a home. Nearly all home buyers feel the same way, even if they’ve bought a house in the past, because it’s easy to forget the home buying steps you took to get there once the event is behind you.

Get Educated

Before you begin, get educated about the home buying customs where you live. Relatives or friends who live in another state might have some good general advice for you, but chances are the process is very different in their area, so avoid the mistake of relying solely on their advice to make important decisions.

So How Do You Get Educated?

Talk to a real estate agent about the typical home buying scenario. This is not a meeting that should lead to an agreement for the agent to represent you.

It’s simply a general discussion about the real estate customs in your area. An agent who won’t take fifteen minutes to help you understand what to expect when you’re buying a home isn’t much of an agent, so if the first few calls don’t produce someone who will help, keep looking.
If you don’t want to talk with a real estate agent, how about a bank loan officer or mortgage broker? They look at home buying from a different perspective, but can usually give you a basic overview of the process.

Questions to Ask

If you decide to work with an agent, will the agent help you compose your offer to purchase a home? If not, who does help?

If the agent uses fill-in-the-blank forms, ask for a blank sample copy to take home and study.

What types of disclosures are sellers in your area required to give to buyers? Can the agent give you a sample copy of typical disclosures?

What types of home inspections are standard in your area? Are there other inspections that the agent recommends?

How much do the inspections usually cost? Are they regarded as a buyer expense?

When are inspections done?

Is a survey required for most transactions? If so, who typically pays for it, the buyer or the seller?

Who does the title search to verify that the deed is problem free, attorneys or a title company? What’s the average cost for that service?

Who acts as settlement agent, the person who puts together final paperwork for you to sign? (attorney, title company personnel, real estate broker, other)?

Other than loan costs, what’s the average total cost for other closing fees?

Taxes, settlement agent fees, etc.

How long does it usually take to close on a home once an offer is accepted?

That’s a good start. After you have the answers to those questions, you’ll have a better feeling for the basic customs in your area.

Always Keep a Cool Head

Even simple problems can be a burden when you have so many details to take care of, so don’t over-react if you hit a few snags on the way to closing. Keep a cool head and work with the people helping you through the transaction to resolve any issues that pop up.

Now Dig In

At this point, your remaining steps are no different than the steps nearly every home buyer must take. It’s time to start digging into the details you need to get through the home buying process.

Intending to Buy a Home with Hopes to Upgrade Someday to a Bigger One – Think Again

Buying a home has been known as the American Dream. But once you’ve bought it, how long should you hold onto it becomes the big question. Well the truth is, most of the time its not your decision to make anyways. Or at least the decision is so painful you hesitate indefinetly to make the next move. Fluctuating interest rates and home values, job changes or layoffs, a growing comfortablity with the location, realization of new Real Estate fees and closing costs, etc. inevitably effect your decision to make that new home transition.

Most new home buyers say they will stay in the home for a few years then upgrade to a bigger one with all the equity they gain. Others say they will move to a bigger home once they have kids or when their salaries increase. All of these reasons sound reasonable, however much of the time they are not reality.

In regards to home equity, the unfortunately reality is that home values in the same location rise proportionaly to each other. As a result whatever equity you have gained in your starter home, by itself does not increase your purchasing power to buy a larger home. Yes, it may give you the opportunity to fiance a larger home, but in the end you also have a much bigger monthly mortgage payment. The next question is, can you afford the new mortage payments.

Before making the decision to upgrade to a new home, you next have to figure out what your net proceeds will be from the sale of you existing home and what your future mortgage will be and whether or not you can afford it. Too frequently we forget that a good portion of our home equity is lost to the real estate commissions and the closing and moving costs to transition to the new home. Only after the net proceeds are calculated from the sale of an existing home can we understand how much additional funds we can put towards a deposit on another home. The key point to remember; it costs to move and it usually costs big.

Unfortunately home prices have far outpaced salary increases. Quite frankly that chasm seems to continue to grow. As a result, waiting for growth in your salary to buy the next bigger home is sometimes a poor reason to hold off from buying the bigger home in the first place, particularly if interest rates are low.

Once the kids arrive the decision to upgrade to a new home can become even more complex. Particularly when the kids get older and even if you are planning to live in the same general community.

The bottom line: You will probably be in a home much longer than you originally plan. Consequently, it is sometimes wiser to buy more home on your first home purchase rather than less. This is particularly true if interest rates are un-naturally low. So before you buy that first home think longer term and buy what you could be happy living in for 20 years, because you just might!

6 Popular Myths About Home Inspections

1. I’m getting an appraisal so I don’t need a home inspection.

The appraisal is performed for the benefit of your mortgage lender to protect their interest. A pre-purchase home inspection is performed for YOUR benefit to protect your interest as a homebuyer. An appraiser may find some defects and will often recommend specific repairs or updates, but the primary purpose of the appraisal is to determine the value of the home.

A home inspector will inspect the home from roof to foundation and everywhere in between, and report on the conditions of structural and mechanical systems. How many years until the roof needs replacement? Is the foundation solid? Where are potential sites for water intrusion? These are questions your appraiser would not normally address.

The appraisal is normally a mandatory out-of-pocket cost for homebuyers, while the inspection is optional. You may wonder if it is worthwhile to spend money on a home inspection, when you know that you still have to pay for the appraisal. Your home is a significant investment. Skipping the home inspection may save a few bucks today, but could cost you thousands later on.

2. The seller has to fix everything the home inspector found.

The inspection report is NOT a fix-it list for the home seller. In fact, with a few exceptions for municipal code compliance, the seller is not required to make *any* repairs to the home. That said, if the inspection turns up significant defects, it is a good idea to talk to your Realtor to figure out what, if anything, the seller is willing to fix or contribute towards repairs.

If the seller is agreeable, it is normally in your best interest to get an estimate for a repair and ask the seller to pay towards that or lower the selling price, rather than having the seller fix it themselves. You want to be sure the repairs are done by a licensed professional, not the seller’s cousin “Handy Andy.” Lastly, remember that a home’s purchase price is just the beginning. You will need to budget for regular maintenance and occasional repairs in order to keep your home in good shape.

3. I can just get Uncle Bob to look at the house for me, he has remodeled houses for years.

I’m sure Uncle Bob, or your friend or cousin with decades of construction experience is a great guy who knows plenty about homes. I absolutely agree that you should bring him along to your second showing, where you decide if you might like to put in an offer on your chosen home. He could be able to give you a good idea of the condition of the home and maybe even spot a major defect.

However, a 20 minute look around is NOT a home inspection. The Realtors are not likely to allow Uncle Bob to poke around for 2 hours or more without a license or insurance. If you are able to renegotiate your purchase contract, can you imagine coming to the table with,”my Uncle Bob says the roof needs to be replaced… ?” You need a qualified, licensed and insured home inspector and a professionally written inspection report.

4. New homes don’t need an inspection.

It is true that building codes have become more stringent in recent years and that they are often designed with safety in mind. However, the municipal code inspector who issues a certificate of occupancy is rarely spending a couple of hours closely inspecting the home.

Many builders do not allow inspections during the building process due to liability issues. That does not mean that the home cannot be inspected after you move in. It is common for many new homes to be sold with a 1-year warranty. Make use of your warranty by having the home inspected during the first year. The most popular time to do a home warranty inspection is in the 11th month.

5. Homes sold “as-is” don’t need an inspection.

How do you know what “as-is” includes without a home inspection? The seller must disclose known defects, but what about defects that are undiscovered?

You may not be able to renegotiate the price of an “as-is” home based on the inspection report, but remember that is not the purpose of a home inspection. The inspection will give you a more complete picture of the conditions of your chosen home, beyond the sellers disclosure. A home is a significant purchase, and the home inspection is an important tool to help you determine if you are making a sound investment.

6. A home can pass or fail an inspection.

A home inspection is an unbiased assessment of the visible conditions of the home. Under no circumstances should an inspector offer their opinion on whether or not you should purchase the home. To do so is a severe breach of ethics.

Many homebuyers have not considered this, so a common question posed to the home inspector might be “Would you buy this home?” My honest advice is this: you can change everything about a home except it’s location. You need to figure out how much you are willing to spend on updates, what defects you are willing to live with, and whether the home you have chosen fits your criteria. Hopefully, the inspection will be a useful tool in making this decision.

In the end, only YOU, the homebuyer, can decide if the home has passed the home inspection.