Archive for Buying a House Guide

Buying a House Guide – Why You Need a Home Inspection

3 August 2011

Buying a House Guide focuses on a very basic tenant of purchasing real estate – knowing what you are buying.

But before we discuss what a Home Inspection is, let’s talk about what it is not:

A home inspection is not an in-depth study of specific systems of a home.  It is a general visual examination of the structural. mechanical, and electrical systems of a home.

Buyers who are in need of a roof inspection, a close look at the various components of the heating and air-conditioning system, or a structural evaluation of the home should contract with trained professionals expert in those areas.

A home inspection may uncover areas in a home requiring closer examination to determine actual condition and continued serviceability, but the inspection itself is intended as an overview.

Buying a House Guide  - What You Can Expect From a Home Inspection

Before you contract with a home inspector, it is a good idea to ask them what kind of inspection they perform.  Some inspections are completed in about a half an hour.  Some take three to four!

Some inspectors conduct their inspections in a golf shirt, while others put on coveralls and really dig in!

Here is a list of things to ask:

1. Do you check all appliances and observe them for a complete duty cycle?  Dishwashers need to do more than just make noise when you push the button!  They need to keep watrer on the inside and clean the dishes with a good dose of hot soapy water to be truly useful!

2. Do you check the temperature of the oven?  A good oven needs to get more than hot.  It should be somewhere near 400 degrees when the dial says it is going to be 400 degrees!

3. Do you check the burners on the range?  A 220 volt range that is only served by 110 volts will show a stripey pattern on the burners – a sure sign of closer scrutiny!

4. Do you check to see if the toilets are loose on their flanges.

5. Do you check to determine that all electrical outlets are in good working order – with proper grounding and polarity?

6. Do you crawl under the house?  Many possibly plumbing leaks and gas pipe issues are well out of sight unless you go down there with a good flashlight.

7. Do you check the flame in the gas furnace?  A yellow flame could mean a cracked combustion chamber – and possible fire or carbon monoxide hazard for your family!

8. Do you open the electrical panels?  Another potential for problems that could have tragic consequences.

9. Do you locate the gas, water, and electrical shut-off switches and valves?  What about code violations around water heaters and furnace flue pipes?

10. How do you determine the structural health of the home?  Do you note cracks above doorways?  Do you see if all doors shut and if dual-pane windows are free from condensation?

Hopefully, your home inspector will do these things and a lot more.

Today, many inspectors furnish a detailed report on their visual examination with photos and an explanation of potential problems.

Purchasing a home is a very serious matter.  Finding that your new home is less than you expected after you move in can ruin an otherwise happy time.  Home inspections can cost hundreds of dollars – but are well worth it in the long run if only for the peace of mind.

Taking the time to find a good, experienced inspector – and reading their report carefully and thoughtfully – should be at the top of every Buying a House Guide!

 

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Buying A House Guide – Always Be Early!

1 July 2011

This Buying A House Guide is good advice for all aspects of your life – Always Be Early!

There is so much going on in any real estate transaction – much of it unforeseen at the time of the offer – why would anyone want to make it more stressful?

It takes a certain amount of time to complete the purchase of a home – time to obtain the financing, time to perform inspections, and time to gather the paperwork required to transfer title from one person to another.

And there is no time to waste!

Buying A House guide tip #5 – Try To Be Early!

Buying A Home Guide - Always Be Early with your timeframes!

Buying A Home Guide - Always Be Early with your timeframes!

Let’s say you make an offer on a home.

Then you get it accepted subject to meeting certain deadlines along the way. For example, you will usually have about three days to complete a loan application and one more day after that to show the source of your down payment.

You will probably have 14 or so days after acceptance to perform a home inspection – and any other inspections you feel are necessary – to determine that the home is in suitable condition.

You may have 17 days after acceptance to provide an appraisal and another four days to deliver loan documents to title.

I say – don’t count how many days you have to complete these tasks.  Start doing them now!

If you have been following along, you have already seen the wisdom in completing a loan application before you made the offer. In fact, with my method, you are already approved for the loan pending the appraisal!

Once your offer is accepted, the first thing you and your Realtor should do is order the home inspection. Even though you have 14 days to complete it, you will want enough time to read and understand the report – and order any other reports if necessary. These guys are often busy and are booked days in advance, so call them today!

Once the inspection is ordered, schedule the appraisal. These things take time to complete, too. Hopefully, you and your Realtor have already done your homework about the property value before you made the offer. If the home inspection turns up any glaring faults, you will not want to pay for an appraisal on a home you will not be buying. 

But order them both early in the transaction -  appraisals can be cancelled a lot quicker than they can be ordered!

Remember – these things are a lot easier to cancel than they are to order at the last minute!

Also, home inspectors, appraisers, Realtors – even you – are human and are subject to getting sick or having unexpected things get in the way of their workday.

You do not want to be running around at the last minute trying to get a home inspector or appraiser to come out to the property simply because of your procrastination!

Let the excitement come from dreaming about moving into your new home – not worrying about whether you have jeopardized your purchase by a failure to perform your duties on time.

This Buying A Home Guide tip should be a Living Your Life tip – if you try to be early and are running a little late, you may still end up right on time!

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Buying A House Guide – Trust, Then Verify!

1 July 2011

Buying a House Guide item #4 – Trust, Then Verify has as much to do with psychology as it does with the physical condition of the home.

In most cases, transferring California real property requires the Seller to complete, among other things, a Transfer Disclosure Statement.  Here, the Seller describes, to the best of their knowledge, any defects, issues, problems or material facts about the home that may affect its usefulness, utility, or future value.

The phrase “to the best of their knowledge” is what we will focus on here!

Buying A Home Guide – Trust, But Always Verify!

Buying A Home Guide - Trust, Then Verify!

Buying A Home Guide - Trust, then verify the condition before you buy!

It is generally assumed that the Seller knows as much about the property as anyone, especially if they have been residing on the premises.  But the Seller may not be aware of the condition of the roof, the furnace, the hot water heater, or any one of the many systems in the home until they fail.

Most Sellers have never ventured under the house.  Many have never gone into the attic. A great number have no idea of the condition of their electrical system or their plumbing.

They know that the dishwasher works – at least it makes noise when they turn it on! – and the furnace keeps the home relatively warm in the winter.  The anxious Seller may not – nor are they required to – look too far below the surface at their home’s condition.

Read the Transfer Disclosure Statement carefully and trust the Seller to tell the truth about what they believe to be the condition of the home.  Indeed, there are severe penalties and liability for them if they don’t!

But just to be sure – verify all that they tell you!

To really know the condition of the home, you should contract with an unbiased professional.  Have them inspect the property, make candid observations, and issue a written report.  Use the Seller’s disclosures as a guide, not the Gospel!

Sometimes, the property inspector will find things that even the Seller was not aware of!

And this extends beyond the property itself to include the surrounding neighborhood.  Ask about neighborhood noises, then see for yourself.  One person’s noise is another person’s music!  Traffic to one person may be just an average commute to another. 

Fortunately for Buyers AND Sellers in today’s real estate market, there are professional services that will issue reports on everything from property condition to property taxes, local ordinances, and commercial and industrial facilities in the area.

I have found most Sellers to be forthright in their disclosures, but they can only tell – and are only required to disclose – what they know. 

If the Seller is a bank or a corporation, their burden of disclosure is even less than an owner occupant. 

If you are buying in a development with a Homeowners Association, make sure you receive copies of the minutes of the association meetings for at least a year prior.  Also review the budget and make note of the reserves.

All of these things can have an impact on your enjoyment of the property once you take possession – especially if there has been an upcoming dues increase that has been discussed for several months, but will not take effect until after you are the owner!

The Buying A Home Guide says buying the correct way involves taking the Seller at his word, but checking the facts just the same!

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Buying A House Guide – Know the Neighborhood

29 June 2011

Buying a House Guide – Know the Neighborhood!

An often-quoted, well-worn rule in real estate is location, location, location. This means everything from what city you are in to how long your morning commute to what school district your children are in.

Buying a home means becoming part of a community.  But you will live in and around your neighborhood.

Make sure it is a good fit for you and your family!

Buying a House Guide Tip #3 – Know The Neighborhood!

Buying A House Guide - Know the Neighborhood

Buying A House Guide - Get to know the neighborhood at ALL times of the day - and the night!

Most people look for a home based on the number of bedrooms, bathrooms, and its size. Some add specific amenities such as pool or a three-car garage.

But the nicest home on the block could lose its luster is the neighborhood suffers from a crime problem, a noise problem, or some other issue that is not specific to the property but affects the whole area.

I advise my clients – especially the ones from out of the area – to visit their target area early in the morning and again late at night.

You may be surprised by what you can learn!

Sometimes, quiet streets are turned into busy thoroughfares during commute hours. Nightfall may bring loud music from inconsiderate neighbors or noises from barking dogs.

If your child looks forward to riding their bike after school, you will want to know how much traffic there is on your street as others come home from work.

If peace and quiet after a busy day is important to you, visit the neighborhood at different times and observe the goings-on.

I had one client tell me about hearing a rooster crowing at 6 a.m. when they visited one potential neighborhood! Another told me about falling in love with a home – then falling out of love as a noisy commuter train went by a short distance away!

Talk with the neighbors a few blocks away from the home you are considering. Ask them if there are neighborhood problems or any other issues.

Then, call the police department and see how many times they have responded to complaints or criminal activity in the past year.

In California, most Realtors provide a Megan’s Law Disclosure, a Natural Hazards Disclosure Statement, and other area disclosures. Read them carefully!

They tell you if there are any local residents who have been convicted of sexual crimes, and the proximity of the home to hazardous disposal sites, earthquake faults, flood zones, and even airports or military installations – all things that can affect your enjoyment while you live there … and affect its marketability when you eventually sell!

Learn as much as you can about the area surrounding your dream home before you buy.

Hopefully, the Buying a Home Guide and knowing your neighborhood will help keep your dream from becoming a nightmare.

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Buying A House Guide – Get Approved For A Loan

28 June 2011

Buying A House Guide Tip #2 – Get Approved For a Loan is a great way to get your offer accepted over the others!

A lot of Buyers don’t see the need to visit the bank and discuss the possible loan programs until they find their dream home.  They want to make certain there is something out there to spark their interest. 

Why would they sit around some stuffy bank baring their soul – and their financial details – until they know positively that they want to proceed with a home purchase?    

Buying A House Guide – Get Approved!

When a Seller puts their home on the market, they want to make sure that the people interested in buying their home can actually perform.  Usually, this means obtaining bank financing.

It will be difficult for the Sellers to get too excited about your offer if they hear that you still need to talk the bank into loaning you money!

Instead, do that first. 

Of all the things a new Buyer needs to consider, first and foremost is their ability to afford the home.  Who better to speak with than the company that will be loaning you the money to buy it?

In this day and age, banks are as concerned with the borrower’s ability to handle thew payments as the borrower should be – sometimes more so.  And you will have to speak with a lender eventually - why not get it out of the way now before things get too hectic?  

What to look for:

With all the loan programs from which to choose, get a professional who can explain the subtleties of each one.  Listen carefully, and ask questions!  They should be prepared to tell you how much you need for a downpayment ( it often changes with each loan program!), how much your monthly payment will be, and if there are any future adjustments to loan terms – like an adjustable rate or a balloon payment.  It may also be worthwhile to discuss options in the length of time you have to pay the loan off.

Lastly, explain your personal situation and expectations and let them offer suggestions to you about the best loan.  Then, complete an application and ask for a borrower approval or pre-approval - and a letter to prove it!

When you leave your banker’s office, it is like leaving with a suitcase full of money.

Once you find the home of your dreams, you can look the Seller square in the eye and tell him that you have all the money required to buy their home – sitting in a vault at the bank.

This puts you in the position to inspect their home rather than having the Seller judging you as a real Buyer.  Believe me, your stature and the value of your offer will increase dramatically when you provide the lender letter of approval!

Don’t find yourself running around, forced into the stressful situation of obtaining financing before a better-prepared Buyer decides they want to buy your favorite home.  Instead, make an offer with confidence, showing you can afford the purchase.  This will allow the Seller to be confident that you are a Buyer, not a looker. 

A Buyer who took the Buying a House Guide seriously and had their financing in place first!

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Buying A House Guide – Sell Your Home First!

27 June 2011

Buying A House Guide entry number one – Sell Your Home First - is actually for current home owners. Often I am asked, “Which do I do – sell my home first, then buy our next home or find our dream home, then sell our existing property?”

Time and experience has shown that it is better to sell your current residence, then purchase your next home rather than the buy first, sell second method.

But this makes a lot of move up home owners uneasy.  They fear they will be forced into a double move – or worse – will find themselves making payments on two homes at the same time!

Buying a House Guide – Why You Should Sell Your Home First!

Just remember – when you sell and/or buy a home, you want to be in the best negotiating position possible in both transactions.

By placing your current home on the market first, you have time to make necessary repairs and touch ups that allow your home to be seen at its best.  Preparing a home for sale is like getting ready for a a lavish dinner party.  You are getting your home ready for its grand entrance!

To market a home properly requires time for its marketing plan to work.  Ususally, this involves Open Houses, internet marketing and advertising, involving the Broker community, and placing information about the home everywhere new buyers are looking for new homes.  You want to lay the groundwork so that the largest number of people learn about your home in the shortest period of time, generating a buzz.  This takes thoughtful preparation. 

When the excited buyer finds your home, you are free to negotiate the best terms for you and your situation. These may include alowing time for you to find a replacement home before you must vacate your current home. 

Then, as you enter ito a contract on your next home, you present yourself as a buyer who has already sold but are awaiting the close of escrow on their current home.  You are a much less risky buyer to the owners of your dream home and can often get more favorable terms in negotiating the contract.

To do buy first, sell second, you would have to make an offer that is contingent upon the sale of your current home.  This means the seller of your dream homes has to worry whether you can sell your home of not, and many will not even consider taking on this additional risk.  They would rather have a buyer who can perform now!

If they do accept your contingent offer, prepare to pay top dollar.  Your negotiating power is greatly reduced and you have already used up a lot of it just getting this less than desirable contingent offer accepted in the first place.

In addition, the seller will want your home on the market NOW!  They are not nearly as concerned with how much you will get as how soon you will get it.  You must scurry around, getting your home ready for the market no mater what it looks like.  It causes you to be forced into a situation where you must generate a flurry of activity, and that usually means listing at a lower price.

In this case, you have traded your desire to buy your perfect next home for most of your negotiating power on both transactions!

This is why – in our Buying a House Guide – we have made selling your home first number one on our list!

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