So you have seen a ton of houses with your buyer agent and he or she has taught you what to look for. You realize that the 4th bedroom is not as important to you as being in that really great school district. And you find that you are drawn to one or two neighborhoods in that school district that seem to feel right to you. The families are friendly, the homes have the architecture that speaks to you and the commute is more than tolerable. Of course, other buyers have come to a similar conclusion and houses in those neighborhoods can go quickly.
One happy day your agent emails you that the perfect house has come on and she can get you in to see it that very day. You go, you love, you WANT this house! It is just renovated enough to be move-in but not too much to be out of your price range. Seems to be in good condition—the seller is a fastidious engineer. But your buyer’s agent knows that you don’t want to overpay. Homes recently listed are not likely to go for a huge discount. The sellers want to see what interest they get and will seldom accept an offer much below asking price in the first week or so. How to navigate all of that?
Your agent shows you the comparables to see how well it is priced. Your agent knows the listing agent’s propensity to price well or not (if he or she is a good buyer’s agent), and so advises you. But she also tells you something else: the sellers have not found a place to live yet. That might be something you can help them with in return for a lower price. Good job that your agent found out that piece of information!
Amazingly, your offer with the flexible closing date rights is accepted even though it is below the last sale of a similar home in that neighborhood. You are elated!
Now comes the inspection. Your agent correctly offers you choices of inspectors she has used and found good, explaining their styles and costs and type of report they issue. One in particular seems promising—he is extremely conscientious and detail oriented. You think he would be the right one for you and hire him.
The inspection day comes and you, your agent and the inspector start in the basement to examine all the aspects of the home. Heating systems, sewer lines, structural condition, water issues, plumbing leaks, water pressure, electric panel and wiring. Upstairs you look at the kitchen appliances, safety GFCI receptacles, washer and dryer, wall cracks, ceiling stains, garage door safety, window function, screens and storms, grout in the bathroom and floor squeaks. Outside you go—the inspector climbs on the roof, looks down the chimney and checks the driveway and sidewalks. All in all you are there about 3 hours and you learn more about this house than you ever thought possible. A good agent will advise you at this point of these things:
• An inspection is an important part of the home buying process but it is JUST one part.
• An inspector does not know how well you have done in your price negotiations or what the home is actually worth. All he knows is what items do not meet certain standards that HE has decided to follow. No common standards exist in his industry.
• There are no requirements that an “already constructed” home conform to each and every updated building code section. Such codes apply to new home construction and are good guidelines but not absolutes.
• Sellers seldom agree to (and the agreement of sale does not require them to) fix every item that an inspector mentions in his report. And neither will most sellers give you a price reduction equaling all of the costs your inspector has estimated, although this is instinctively what you will think you want as a buyer.
After reading the 12- page report, you decide that home ownership is mighty scary and perhaps you do not want to take all these things on. But your buyer’s agent points out that many of the items are suggestions for your routine maintenance, not problems now. And many of the things the inspector has noted are defects that any desirable home might have at the age this one is--even if it had been well maintained. The inspector’s suggestion, for example, that the seller be required to provide and install all the screens in all of the windows is just not a feasible idea for an older home where not all of the screens are around anymore or even replaceable. Most of the windows did have screens and the homeowner had kept them in good repair.
Some homebuyers will terminate after a typical home inspection report because they do not know how to integrate it into the entire transaction. A good agent will advise them but will always pursue this option if that is what the buyers want. But know that inspectors can make mistakes, over emphasize concerns in order to protect themselves from liability and even over-estimate repair costs because they think that is helpful to the buyer. Good inspectors can do these things.
After a lot of discussion, you decide to request a price reduction to pay for the termite treatment, the repair of the broken sliding glass door, the replacement of the kitchen faucet which leaks and a few other items that were not taken into consideration when you priced the home. It is highly unlikely that the price of the home was wrong before or that it is perfect now, because the percentage change is probably within the margin of error at that level, but buyers deserve a level of comfort at this stage and it is the agent’s job to help achieve that.
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