Tag: buying a home

Happy Clients Realty Group - Ali Palacios > buying a home

Avoid These Mistakes Before Your Closing Day

Posted on by Ali Palacios - Broker

Don’t let a small mistake ruin your chances to close on your home. Lenders are checking employment and credit up through the day of closing. You spend days going through the finance procedure and you finally received approval for a mortgage loan. It’s time to celebrate, right?

Not yet! Your lender will recheck your credit right before closing. Don’t give them a reason to deny your loan. Nothing is official until everything is signed and funded. Avoid these most common mistakes:

1. Changing jobs

Changing employers could mean delays due to employment and salary verifications or possibly cause your lender to deny your loan. If you can wait, wait. It’s not worth the risk.

2. Making a big purchase

You need new furniture, a new car, a boat etc. Your debt-to-income ratio is an important factor when being considered for a loan. If you add to your debt by making a large purchase, you risk exceeding the ratio that your lender finds acceptable.

3. Opening credit accounts

You might apply for a credit card so you’re ready to buy furniture for your new house. But similar to taking on new debt, applying for a new credit account can harm your mortgage approval. The credit inquiry necessary for the new account will ding your credit score a few points.

 

When in doubt it’s best to consult your lender before making any changes to your finance.

What is an option fee?

Posted on by Ali Palacios - Broker

In Texas an option fee is money paid by a buyer to a seller for the option to terminate a real estate contract. Option fee funds are not earnest funds. The option fee and the time allotted to terminate is discussed in section 23 of the resale contract. sample 1-4 resale contract

The termination option period gives the buyer are given time to fully evaluate the condition of the property and perhaps renegotiate the initial offer based on inspections, needed repairs, or other considerations. During the option period, buyers may either terminate the contract or proceed to purchase the home.

This fee is due within 3 days of the effective date of the contract. The payment is made out to the seller and should be delivered to the seller within the allotted time or the buyer WILL NOT have a termination option period. If the buyer does not have a termination option period and they choose to cancel, the buyer might lose their earnest funds.

 

The option fee and numbers of days allotted for termination are negotiable. Typically you will see an option fee of $100-$300 for 7-10 days.

To avoid problems:

  1. Make your option fee payment by personal check or cashier’s check. Do not pay cash
  2. Make the check out to the seller on record. Do not make it out to anyone else, including the real estate agents involved.
  3. Deliver the payment within the 3 days allowed
  4. Request a receipt reflecting delivered.

The option fee will or will not be credited towards the buyer’s purchase if they proceed with the purchase. If the buyer should cancel the contract, they will lose this fee.

Can the option period be extended?

Possibly. Both the seller and buyer have to agree. The extension should be completed in writing and will involve an additional fee to be paid upon execution of the extension. Usually this occurs if additional inspections need to be completed or if inspections were not completed within the set amount of time due to a delay in utilities being installed. If you feel that you need an extension, speak to your Realtor® and discuss your options.

During the option period, the seller can continue to negotiate and accept back-up offers from other potential buyers.

What expenses will I incur out of pocket before closing?

Posted on by Ali Palacios - Broker

The first step in purchasing a home is to get pre-approved for a loan. The lender should disclose and review all the typically closing cost, down payment and other common fees. Most of these are disclosures in your Loan Estimate (see sample copy below). Some of these fees are paid after a contract is executed (agree upon and signed) but prior to closing.

Sample Loan Estimate

The following is a list of the typical fees a buyer will incur prior to closing:

 

Earnest Money Deposits: This is a cash deposit attached to you purchase offer. The amounts of this deposit varies but expect to pay at least 1% if you are financing the balance and maybe as high as 10% if you are paying cash. Although earnest funds are not required they are expected. If your offer is accepted and you proceed with the purchase, this deposit is applied towards the purchase of your property.

Home Inspections: Every buyer should have their home inspected. This is usually done within 7-10 days of the executed contract. The cost will vary based on the inspection completed and the size of the home. The most common inspections are a general inspection that may run approximately $450 and pest inspections will typically cost $75-$150.

In some cases you might have to inspect the foundation, a water well, a septic tank, etc. and these all have a separate cost.

Option Fee: This is a fee that is paid to the seller for the ability to have your inspection period. This fee will allow you to inspect the home within a given amount of time and back out of the agreement if you do not like the results. The fee varies but typically runs $100-300 for a 7-10-day period. Money well spent if it allows you to back out of the contract as a result of a bad inspection.

These funds can be credited to the purchase of your home if you proceed with the contract; if you decide to back out, you forfeit the funds.

Appraisal: If you are financing your home purchase, the bank will want to appraise your home. The purpose of an appraisal is to make sure the home you are purchasing is worth the amount you agreed to pay. The bank will not want to finance 100K for a home that is valued at 80K.

Appraisals typically cost approximately $450-$550. Your agent should coordinate with the lender so that this is ordered after the inspection period has passed.

 

What are earnest funds?

Posted on by Ali Palacios - Broker

Earnest funds are one of a few funds you will need before you close on your home. It can be found in section 5 of the sales contact.

Earnest money is a deposit made to a seller showing the buyer’s good faith in a transaction. Typically it’s equal to 1% of the sales price. These have to be deposited with the title company within 3 days or less of an executed contract. These funds are held by a title company in an escrow account.

Once a buyer and a seller enter into a contract. The buyer may or may not be able to reclaim his or her earnest money, depending on how the contract is phrased. Contracts will typically have contingencies written in to protects the buyer and allows them an out if the home’s inspection is unacceptable or if the home does not appraise for the agreed upon sales price.

The contract does not protect the sellers from these unknowns but they take the home off the market while the home gets inspected and appraised. To prove that the buyer is serious, they will offer earnest funds, in good faith for the time the home is off the market. If the seller terminates the deal, the earnest money will be returned to the buyer.

These funds are not in addition to your sales price; The buyer receives a credit for these funds at closing. 

  • Never give an earnest money deposit directly to the seller. The check should never be made out to the seller. It should be made out to the title company.
  • Get a receipt.
  • Don’t pay the earnest funds in cash. These need to be paid by personal check or cashier’s check

There are ways that you can lose your earnest money deposit.

  1. Default of contract. Are you trying to cancel the contract outside your options? This might be default and could cost you the earnest funds
  2. You waived your contingencies –  If the buyer waives their contingencies, they will lose their earnest funds if they should cancel or not be able to obtain financing.
  3. The buyer does not meet the deadlines specified within the contract and the seller and buyer can’t reach an agreement for the contract expires. Extension must be made in writing and signed off by both the seller and the buyer
  4. The buyer gets cold feet and he/she cancels the contract outside of their option period.
  5. The buyer wasn’t able to get financing due to reasons that could have been avoided:
    1. An increase in buyer’s debt (purchase a new car, purchased furniture, made any large purchase before closing)
    2. Quits his/her job
    3. Make a mystery deposit into their account and won’t explain why
    4. Co-signs a loan
    5. Opens new credit cards
    6. Spend the funds earmarked for your down payment and closing costs

When in doubt speak to you lender!

Upon cancellation, the sellers and buyers are asked to sign mutual earnest funds release form. If an agreement cannot be reached, the party holding the earnest money deposit will continue to hold it until an agreement is reached.

Remember before you sign a contract, chat with your agent and make sure that you cover all your options.

sample 1-4 resale contract

7 Secrets About Short Sales You Need To Know Before Making An Offer

Posted on by Ali Palacios - Broker

Are you interested in buying a short sale?

Even if your aren’t, and you’re in the market to buy a house, you should know about “short sales”. There’s always a chance that a house you fall in love with will be subject to a short sale.

So, do you avoid a short sale like the plague? Or do you roll up your sleeves and make an offer?

You Probably Know This, But Just In Case

A short sale is when a homeowner sells their property for less than the amount they owe.

Not that the homeowner can just agree to a price and sell you the house for any old amount. They will need approval from their lender.

Not too many years ago, short sales weren’t really something you’d see on the market. Then the market tanked, and it became a solution for many people who owed more than they could sell their house for. It was a better alternative than foreclosure, for homeowners and for lenders.

At this point, short sales have been around for a quite while. And they keep on showing up. Maybe not as much as they have in recent years, but there doesn’t seem to be an end in sight. Unless the market goes back to the heydays of the early 2000s.

Which means you need to at least be aware of them, and know whether or not you want to deal with trying to buy one.

So, let’s get into some seven things you should know in case the house you want to buy is a short sale.

1. Not Every Short Sale Is A “Deal”

A lot of buyers say that they want to go after short sales, because they want to get a good deal.

Just because a house is being sold “short” (for less than the owner owes), does not mean it’s a good deal.

If there are equal options for you to choose from on the market that are not short sales, it may not make any sense at all to go after a short sale.

You really should only go after a short sale if you are getting a good deal. Or, if there are no other options, that are as good or even better, for about the same price. It isn’t worth the hassle.

2. Even If It Is A Deal, You’re Going To Pay For It

You’re going to pay for it in patience. Lots and lots of patience. Which boils down to time. And time is money.

The time you’re waiting for a short sale to be approved could cost you in many ways. Just to name a few:

  • You might miss other opportunities you would have liked to go after.
  • You might incur costs because you need to line up temporary housing while you’re waiting for the deal to close.
  • You could spend money on due diligence (inspections, mortgage process, etc.) all for nothing, if the sale never goes through.
  • Your mortgage rate could go up during the process of waiting.

Lenders have gotten a bit better and quicker about the process at this point. When this trend first started, they were swamped, and it was all kind of new for everybody. So it took time. Now that the kinks have been worked out, it can happen more quickly. But not necessarily. There is no way to know how long it will take. Err on the side of caution, and plan on it taking anywhere from six months to a year. But it’ll probably be more like between three to six months.

Regardless, it will almost always take longer than a straight up sale between you and a homeowner who does not need to sell their house short.

So, again, the deal better be worth your time and patience.

3. Expect To Buy It “As-Is”

Almost every seller in the world wants to sell their home “as-is”. Meaning they want to negotiate that the buyer won’t further negotiate any issues that are found in a home inspection during the process.

But the reality is, it’s pretty rare for a homeowner to sell their home truly “as-is”. There’s almost always some sort of concession or repair made, once a buyer does their home inspection. No matter how firm the seller wants to be, or how good of a price they gave the buyer, it happens. And sellers will typically agree to some, or even all of the requests made by a buyer. It’s just easier than losing the deal.

But it isn’t always just home inspection issues. It could be something related to permits, or certificates the town requires, for instance.

In a short sale, the lender isn’t going to step and fix anything, or consider a credit for repairs usually. And they aren’t going to get any permit or certificate issues resolved. It’s hard enough getting them to agree to the lower-than-owed price they accept. So don’t expect it. Don’t even hope for it.

And the owner probably isn’t in any financial position to do any repairs, given their situation. And frankly, they probably are pretty much checked out at that point anyway. They want nothing to do with what you want. They get nothing out of it. Unless they are that desperate to just get this chapter of their life over with, and somehow figure out a way to make some repairs.

Point is, expect to take on whatever problems the house comes with…

Which means, again, it better be a pretty good deal.

4. Don’t Be Surprised If The Lender Counteroffers

Unfortunately, not all real estate agents or homeowners even get the lender on board with the fact that they’re trying to sell the house short.

So, you could negotiate what seems to be a great deal with the owner, only to have their lender come back and counter your offer for way more than the house was even listed for.

So, let’s say the house is listed for $250,000. You negotiate it down to $225,000. But then the offer is submitted to the lender for approval, and they counter at $325,000…probably because they are owed that much.

This strikes a lot of buyers as crazy. How can a lender do that!? The house was listed for less! Well, they weren’t in on the process when the owner and agent made those decisions. Now they are.

It might take some time for them to come around.

Many buyers get so frustrated that they back out of the deal because of the lender not coming to agreement on the price. Only to see the lender eventually lower their expectations and accept an offer for the price the buyer had offered… or even less!

So, it might make sense to just hang in there and wait the bank out. Stand your ground. Be patient. Wait.

Or, let another buyer or two loosen the jar lid, and throw offers at the property. Let them get frustrated and get the lender to see the light. Then step in with your offer after one or two other buyers failed to get from offer to a closed deal.

But that does take patience. And some amount of strategy.

And there is no guarantee…

5. The Deal May Never Be Approved

Whether or not a short sale is approved is out of your control.

There are a lot of factors.

One of the most frustrating things is that a lot of owners who are trying to sell short do not put in the effort they need to. There’s a lot they need to supply in terms of information. And their motivation is minimal. Beyond that, they are stressed out and probably depressed. So there are times that the homeowner delays the process, if not kills the process altogether.

It can get to a point where they progress too far, and fall into foreclosure. And that process can drag on for quite some time. Sometimes, owners feel it would be even better to just get foreclosed. It buys them more time. And a short sale, while better for them than a foreclosure, is no bed of roses. It is still going to negatively affect them.

And a lender could simply not agree to a short sale. Maybe the owner is in better financial shape than they feel is necessary to approve a short sale. Or perhaps they just decide it makes more sense to foreclose.

It can be frustrating. Your hands are tied. There’s a lot of hurry up and wait. And very little you can do to get anyone to move faster. Even constant follow-up, complaining, or threatening to kill the deal will not make the process move faster.

So, just be prepared that you could waste your time, all for nothing. And you will spend money on your end of the process that will never be returned.

6. Be Prepared To Move Fast

When and if a short sale is approved, the chances are that the lender will give you a short time to actually close the deal.

So, while they could take months and months just to say yes…they might give you two weeks to close the approved deal. And if you don’t, it could throw the process back into review.

The biggest hassle here is with your mortgage (if you are borrowing money to purchase). Your lender needs some time to get your loan approved and “clear to close”.

You could be super diligent and get as much of your mortgage process done months ahead of the short sale being approved, but there is still a lot that needs to be done in the final stages. So make sure you’re working closely with your lender, and be good about getting them everything they need ahead of time.

7. Hire A Real Estate Agent Who Is Okay Working With Short Sales

It’s so important to work with a real estate agent who is willing to be in it for the long and hard haul…

Not every agent wants to deal with short sales. This is understandable. Agents don’t get paid more for dealing with this type of sale. In fact, they often get paid less. And they are more work. And they are less of a guarantee. And agents work with very little guarantee that their efforts will result in compensation as it is.

So, do be aware of this, and thoughtful about it.

So, when you hire a buyer’s agent to work with you on a short sale, you need to also be in it with them for the long and hard haul! It is the right thing to do.

And it will pay off…

Because so many buyers give up on getting a great deal on a short sale because an agent will persuade them to avoid going after one altogether, or encourage a buyer to move on if the process is taking too long. Again, not judging…they have valid reasons for being that way. But it is important for you to know.

One thing your buyer’s agent should do before you make an offer on a short sale is to assess whether the listing agent on the property knows what they are doing. Many do not. And in those cases, you might as well not even waste your time.

As scary as this all may sound, short sales aren’t something you need to avoid. Just know what you’re getting into beforehand.

And be patient. You will pay for the deal in patience, but knowing what you know now, it should be worth every penny of patience you pay.

 

Source: http://www.bestrealestateblog.com/7-secrets-short-sales-need-know-making-offer?m=JnojPGPgYwNqRUqKIeuc

Do You Need A Real Estate Agent When Buying New Construction?

Posted on by Ali Palacios - Broker

If you consider buying a new construction home, there’s a good chance you’ll question whether or not you even need to use a real estate agent.

You might even wonder if there’s an advantage to not using a real estate agent…perhaps thinking you can get a lower price, or more upgrades thrown in, if the builder isn’t paying a real estate agent their commission.

Or, you just might not give it any thought whatsoever, and stumble into buying your new construction home, without having your own real estate agent to represent you.

So, do you need to use a real estate agent when buying new construction?

Technically? No.

Should you? Yes.

Beyond Just Signing A Little Paperwork

One reason people question whether an agent is necessary, is because many tend to see it as an agent just signing some paperwork so they can get a commission.

There are certainly agents out there who don’t bring a heck of a lot to the table in terms of expertise and skills. There are ones who literally just want to make sure they are in the room when you do the paperwork, so they can secure their commission.

Unfortunately, they give great agents a bad rap.

Those are not the type of agents you should hire if you are buying new construction. Or any house for that matter.

The purchase of a new construction home really isn’t any different in many ways than purchasing a resale home. The knowledge and skills of a good real estate agent go beyond the “finding” of your home, or doing some paperwork.

The Builder Is Not Your Ally

Not that the builder is evil, and out there trying to take advantage of you. But a builder is certainly going to be looking out for their (the builders) best interests…not yours.

If a builder or their representative pushes you to not use your own real estate agent, that’s a huge red flag. Some may even give you an “incentive” not to use your own real estate agent, and say that they will throw in some free upgrades, or lower the price of the home.

A truly reputable builder will not push you to not use your own real estate agent. And they certainly won’t try and lure you with the temptation of free upgrades. Because that’s shady.

Look at it like this…

Let’s say you were suing someone in court. The person you are suing is a lawyer. The lawyer says to you, “Hey, don’t bother getting your own lawyer. No need really. I know what I’m doing. If you need some thoughts along the way, just ask me what I think you should do. Save yourself the cost of a lawyer, and I promise to take it easy on you in court.”

You’d never do that. It makes no sense. The lawyer isn’t going to look out for you more than his own interests. It would be your mistake for trusting that he would. Nobody would think you were all that bright for doing that.

Most reputable builders go out of their way to deal with local real estate agents. They expect to deal with a real estate agent.

They’ve factored a real estate agent’s commission into the cost of the home.

It’s About Representation

There may very well be a licensed agent at the new construction site, sitting in the model home. But that’s not your agent…despite any disclosures or documents that they may go over with you.

You want your own agent. Someone third party, not affiliated with the builder. Someone affiliated with you and your interests.

Because this is about representation. Representation of you and your interests. Not just someone along for the ride and to sign a few papers and then swing back around and collect a commission check.

And if you hire your own real estate agent, the agent has a fiduciary responsibility to you. They need to treat the relationship with care and trust. Look out for you and your interests.

But beyond that, they’ll help you understand the contract, and look for anything unusual. They might suggest some things to add to the offer and contract, like certain contingencies the builder may be trying to get away from including. They will negotiate on your behalf.

Your real estate agent will be able to help you decide between all of the options you have out there in the market. They will help assess the big picture. Maybe new construction isn’t the best choice for you. Maybe it is. Maybe this development is the best for you. Maybe it isn’t…

Do This First

Before you just stroll into check out a model home, find a real estate agent to represent you. (If you already have on, skip to the next section…)

Do not pass Go. Do not collect $200. Interview and choose an agent who will represent you.

If you find one that specializes in new construction, that’s a bonus, but don’t expect it or limit yourself to one that does. There’s more resale business than there is new construction in many areas. So a lot of agents aren’t going to be specialists in new construction. And that’s fine. You want someone sharp about the universal stuff, like negotiating, analyzing the deal, understanding the market, and you and your needs.

Then Do This

Now you can go check out model homes…

But don’t just wander into a development or model home on your own and have a look see.

For the first visit, go with your real estate agent. “Register” at the site, and reserve the right to representation by your real estate agent. (If you do not go with your agent on the first visit, it can be a mess trying to involve one afterwards.)

While you don’t technically need your own real estate agent, there’s certainly a lot of benefit to having one…and a lot of potential downside to not having one.

 

Source: http://www.bestrealestateblog.com/need-real-estate-agent-buying-new-construction?m=JnojPGPgYwNqRUqKIeuc

Home Inspection 40+ year old homes

Posted on by Ali Palacios - Broker

SAMPLE Inspection report

What to expect from an inspection report?

Generally speaking, reports should describe the major home systems, their crucial components, and their operability, especially the ones in which failure can result in dangerous or expensive-to-correct conditions. Defects should be adequately described, and the report should include recommendations.

 Reports should also disclaim portions of the home not inspected. Since home inspections are visual inspections, the parts of the home hidden behind floor, wall and ceiling coverings should be disclaimed. 
 
Home inspectors are not experts in every system of the home, but are trained to recognize conditions that require a specialist inspection.
 
Home inspections are not technically exhaustive, so the inspector will not disassemble a furnace to examine the heat exchanger closely, for example.
 
Standards of Practice are designed to identify both the requirements of a home inspection and the limitations of an inspection.

The only mandatory repairs are what the mortgage lender, appraisal, or insurance company requires. The rest is negotiated between the parties (buyer and seller). 

What is checked?

STRUCTURAL

  • Inspector tries to physically get on the roof
  • Checks the entire roofing system
  • Checks all penetrations through the roof
  • Crawls through the attic checking for evidence of water penetration and for proper framing (if there is a crawl space)
  • Load bearing walls, inside & outside, down to and including the foundation system

MECHANICAL

  • Check all built in appliances
  • Dishwasher, disposal, oven, range top, kitchen vent, garage door operators, ceiling fans, etc.
  • Central heating and cooling

ELECTRICAL

  • Starting from where power connects to house
  • Breaker panel, where the breakers are
  • To all accessible outlets, switches
  • All accessible wiring

PLUMBING

  • Check for proper operation of all the sinks, faucets, commodes, bath tubs, shower, water heaters, etc.

No home is perfect, try to focus your attention on big ticket items 

Roof

  • Roof over wood shingles – Most insurance companies do not allow this
  • Older than 15 years (typical lifespan) – Red flag for insurance company

HVAC  page6image8013312 page6image8013536 page6image8013760 page6image8013984 page6image8014208 page6image8014432 page6image8014656 page6image8014880 page6image8015104 page6image8015328 page6image8015552 page6image8015776 page6image8016000 page6image8016224 page6image8016448 page6image8016672 page6image8016896 page6image8017120 page6image8017344 page6image8017568 page6image8017792 page6image8018016 page6image8018240 page6image8018464 page6image8018688 page6image8018912

  • 12-15 years – Average serviceable life 

Foundation

  • There are 2 types of foundations in greater Houston area – Those that have moved and those that will move. We have expansive clay soils; the home sits on ground, ground moves, house moves

Appliances 

  • Typical serviceable life of kitchen appliances, 10-15 years

Electrical 

  • Deficient might mean not to today’s electrical code, things like AFCI, GFCI and grounding

Plumbing  

  • Water heater 8-12 years $400-$1,200
  • Shower pan $1-3,000
  • Old cast iron drain line can be very expensive to repair
  • Active water leaks

ADDITIONAL INSPECTIONS (things that are not covered in a general inspection)

  • Hydrostatic test of Cast iron drain lines below house (performed by a Plumber)
  • Termites or pest inspections
  • Stucco
  • Chinese Drywall “2006”
  • Pool (performed by Pool Specialist)
  • Infrared / Thermal Imaging (some inspectors now include this)
  • Environmental (performed by Specialist) – Mold, Lead, Asbestos, Radon

A Simplified Guide to Your Home Inspection – Part II

Posted on by Ali Palacios - Broker

SAMPLE Inspection report

If you have recently gone under contract to buy a home, you may be planning for your physical inspection. A lot of information will be thrown at you in a very short period of time, and a large amount of it is confusing. Hopefully, this will simplify your process. Part I of this article covered roofs, foundation, plumbing and electrical systems. Here, we will cover windows, landscaping, and termites.

Your inspector may recommend new windows. If you are happy with your old windows, they function well, and the casings are in good shape, that is great. But installing new windows is a great way to make your home more energy efficient. New windows are not inexpensive, though. Your window installer may need to repair the window casing (see the termite section, below). If you would like to maintain a vintage look, know that custom windows are really expensive. Also, you will likely have to paint inside or outside once installed. There is one more issue with windows – if the exterior is not sealed properly, they can leak during rains. This is more common than you think, even with condominiums. However, new windows can save you energy dollars and really freshen the look of your home.

Depending on what part of the country you live in, you may have visions of all new landscape including hardscape (created mounds, decorative or retaining walls, etc.). Nothing makes a house look more like eye-candy than refreshed landscape. Or, you may want a simple grassy yard, which might require sprinklers. Be warned – all of this is can be really pricey. Hopefully, you and your gang will want to plant, weed and replant yourselves, which is very time-consuming but can be a lot of fun. And once it stops being fun, you can always hire a gardener.

The other landscape item that your inspector may point out are your home’s trees and their roots. You will need to trim branches regularly to keep them off your roof. The big thing, however, are tree roots as they can lift or crack a foundation and invade sewer lines. If this occurs with a big tree that you wish to keep, you may want to hire a tree surgeon to cut the right roots and leave the other roots alone.

Finally, your inspector will check your outside drains and sump pumps, if you have them. These need to function perfectly so you do not have standing water close to (or in!) your house after heavy rains.

Depending on where you live, you may have a separate termite and wood-destroying organism inspection. Just about every house has termites. Termites are often even present in brand new lumber for brand new houses! In addition to eradicating the little pests, you may need some wood replaced. This is common with window sills and casings, wood overhangs and wood posts. The termites will come back, as well. It is a good idea to have your home inspected every two years or so, top to bottom, and eradication done then.

Hopefully, this has taken some of the mystery out of your inspection. Remember that everything can be repaired or replaced – at a price, of course.

 

source: http://www.bestrealestateblog.com/simplified-guide-home-inspection-part-ii?m=JnojPGPgYwNqRUqKIeuc

A Simplified Guide to Your Home Inspection – Part 1

Posted on by Ali Palacios - Broker


SAMPLE Inspection report

If you are under contract to purchase a home, congratulations! Of course, you are excited and a little nervous, too. Your physical inspection can be especially nerve-wracking. In a short amount of time, you will receive more information than you can process, and it will all seem very serious. And confusing. And potentially expensive. In order to calm your nerves, here is a breakdown of the inspection’s most important home components and priorities. (Homes and condos are constructed differently across the U.S.; this will deal with structures that are mostly wood and not brick, and homes that are not new.)

Your home’s most important elements are its roof, foundation, plumbing, and electrical system.

First, here’s the story on your roof. Your inspector may say that the roof “is at the end of its useful life.” It is not unusual for a roof to need some repairs and maintenance, but it is unusual to need a whole new roof. With continuing maintenance and proper repairs, your dying roof can last several more years. Repairs are pretty easy and most roofers are cost-competitive. Condo purchasers will want to check with the condo board to see what repairs have been done or are anticipated.

Your foundation will either be raised above the ground on piers and posts, or it will be a slab. If you have a basement, it is raised; if you have a newer home, it is likely on a slab. If your raised foundation has some cracks, those can be easily repaired with special epoxy products. If it is completely cracked, and off its posts, run away.

Electrical problems that your inspector finds can be difficult to understand. Amps, breakers, sub panels, drops – what does that all mean? Older homes may not have enough power to run today’s modern appliances, toys, and systems. Wiring may be older, too. The good news here is that electrical work, even replacing wires and panels, is very routine for an electrician. It does not take very long to complete and is usually cheaper than you think it would be.

Your plumbing has many components and some are more serious/expensive to fix than others. Leaky faucet? No big deal to repair. Septic tank pumping? Routine. Roots in your sewer? Common. Unfortunately, many other problems can be progressively more serious and expensive to fix, especially if walls need to be opened. You will want to get estimates from at least two plumbers – hopefully only a portion of your plumbing needs repair. It is usually not necessary to re-pipe a whole house.

Hopefully, your inspection will make a little more sense to you now. The next post on this topic will go over other home components like heating and air-conditioning, fireplaces, windows, and outside spaces.

source: http://www.bestrealestateblog.com/a-simplified-guide-to-your-home-inspection-part-1?m=JnojPGPgYwNqRUqKIeuc

Will A Home Warranty Ease Your Worries?

Posted on by Ali Palacios - Broker

You know that old phone prank…

Someone calls and says, “Is your refrigerator running?”

The person on the other end then says, “Yes. Why?”

And then the caller says something like, “You better catch it before it gets too far away!!”

The joke worked because, for the most part, everyone has a fridge, and it is probably working.

And that is when you should have a home warranty in place… when your fridge is working, not once it is broken.

Do you have a list of worries?

There’s a lot of things you probably notice, but ignore around your house. Until it is too late, and becomes a much bigger problem.

It’s not broken…but maybe you notice that your fridge is making a different sound lately.

Your garage door isn’t working quite right. It goes half way down and gets stuck.

The bathroom faucet is dripping.

You notice a little leak in your bedroom ceiling.

Little worries like these are super common for homeowners.

Maybe you have an even longer list of little worries than those…

What’s the real worry?

But worries like those aren’t the real worry.

The real worry is the cost of getting them fixed.

For a lot of people, it is hard enough just paying the mortgage and other household bills.  It’s not like there’s tons of money sitting around to fix the little worries.

So you probably ignore it for as long as possible. Then the little problem becomes bigger and bigger. And the little problems become more numerous.

You figure you will deal with it when and if it becomes too big of an issue…which is usually once something is broken, or not working at all. You deal with it once you have to spend the money.

Get a home warranty before it is too late…

If all of that sounds too familiar to you, a home warranty can solve a lot of your worries.

But you need to get one before your appliance, your furnace, your air conditioning, or whatever else, is actually broken. They won’t cover your problem if it was a pre-existing condition…

Part of the problem might be that you don’t want to spend the money to buy a home warranty. They can cost hundreds of dollars. Maybe even upwards of a thousand or so, depending on the plan and coverages.

But in comparison to how much it could cost you if your furnace or water heater stopped working, the cost is really not so bad.

And, it isn’t like you can go and just buy a $500 home warranty once the furnace goes kapoot, call them up, and presto, have them send someone over to install a new one.

You can try… but they are gonna deny.

Expect some aggravation

As with anything… not all home warranty companies or plans are reputable or great.

Just do a little research online, and you will see tons of complaints about home warranty companies. Enough to scare you away from even buying one.

With that said, sometimes it is a matter of having the right understanding, expectations, or following the right protocol.

For instance, a home warranty company won’t necessarily get you a new furnace…if the existing one can be fixed. A lot of people complain that they wanted something replaced, but the warranty company merely fixed the problem. They have that right. If it can be fixed, they fix it. If not, they replace it. Sometimes, people misunderstand what to expect, or simply want more than they should expect.

Or, some people will feel that they should be able to call their own contractor to have a problem fixed or replaced, and expect that the warranty company will pay the bill. Most don’t allow that. The warranty company needs to be called first, and they will usually give you a choice of a few contractors that they have relationships with. Not necessarily contractors you know, or want to hire.

A lot of times, people complain just because they presumed that something would be covered, when it really isn’t. You need to know what your policy will cover. (A pool, for instance.) There are usually a few options within each home warranty company. Obviously, the more and better the coverage… the more the cost.

And it isn’t uncommon to have to fight a little bit (or a lot a bit) to get something covered. They certainly have their loopholes and language in the policies that allow for them to deny coverage if they want to. Or even just do things as cheaply as possible.

So, do expect that just buying a home warranty is not a direct ticket to getting everything you want, at least without question or a little fight.

It’s aggravating, but the old adage about the squeaky wheel gets the oil is probably a good way to approach dealing with your home warranty company. Expect to squeak.

A good, simple trick…

Hey, you may find a great home warranty company who addresses you and your problems thoroughly, quickly, and with little hassle. Without needing to squeak, even. If so, that’s great.

But probably not… judging by so much of what you read online. It is hard to find one that has an absolutely favorable reputation.

So a good trick you might want to consider is this…

…call your real estate agent.

Ask your real estate agent for their advice.

Advice on:

  1. Does a home warranty make sense for you, your needs, and your specific concerns?
  2. If so, what home warranty companies do they recommend?

Here is the real “trick” to this trick…

Real estate agents often have affiliations with home warranty companies. They are in the business day after day. Home warranty companies do not want to be on their bad side.

So, if you are having an issue with a home warranty company, your real estate agent may just be helpful in getting the warranty company to get things done. Especially if it is one that they have an affiliation with, or recommend.

All it might take is a phone call, or an e-mail from your real estate agent, and whatever issue you were having might just get resolved more quickly than by you spending hours on the phone, sending e-mails, or writing a scathing complaint online.

Too often, some of the in-between-the-lines benefits of a real estate agent get overlooked.

This is one of those benefits. Don’t overlook it.

If you have any little worry around your house…or a long list of them…call your real estate agent. Ask their advice. Most agents will give it freely, and for free. And gladly.