Don't Ask, Don't Tell Homebuying
Are you on the hunt for the house of your dreams? Read on to find out what questions you should ask before you sign on the dotted line. Make sure you don't move in to find yourself unpacking problems.
Don't Ask, Don't Tell
Are you nervous that the house of your dreams has a leaking roof or a plumbing problem? Cathy Whatley of the National Association of Realtors says worry no more. Problems like these affect the value of the house, so a seller is required to tell you about them. "If there's a latent defect... you could look at that as something that you would potentially have to be paying to have repaired and so that is something that you could negotiate in terms with the seller." In fact, more than two thirds of all states require home sellers to write these defects on a disclosure form.
Be careful. There are some things that a seller isn't required by law to tell you unless you ask, so it is your job to find out. Do your detective work. Whatley says, "The condition of the home, the location of the home, the price appreciation in the area ...while it may be interesting to you, is not necessarily something that will be a negotiating point." So be sure to ask why the seller put the house on the market, what the neighbors are like, and if the property has ever been rented. Find out things like the age of the roof, and the age of the furnace. Whatley adds, it's a good idea to drive through the neighborhood at different times of day.
If you have kids, you may want to ask if the area is family friendly and whether the schools are good. You can even ask the neighbors these questions. Whatley also recommends using the Internet. "You can find out a lot of information about neighborhoods if you go online through a city site. You can find out about school information. Many school boards have their information online you can find out about the schools that are in the area where that particular home is located."
And don't forget to schedule a home inspection to tie up any loose ends. "You can have a radon inspection done, there are lead paint disclosures, there are energy disclosures, and there are flood disclosures. I think it is important though to make sure that you do have whatever inspections are there to make you most comfortable," says Whatley.
Bright Idea!
Once you find your dream house, apply for homeowner's insurance early. Why? " It's taking the insurance companies time to go through a procedure form," says Whatley. "I think we used to believe that when we actually filled out an application for insurance, that that was in effect a policy. And that's not the case."
The earlier you fill out the application, the better your chances of having a policy in place when it is time to close the deal.
RENT TO OWN
Rent to own is also known as ‘the lease option', and it gives would-be homeowners an affordable alternative to a conventional sale.
Rent to own may make sense for people in a variety of situations. It may be a good choice if you:
>>Have bad credit
>>Don't have enough for a down payment
>>Have trouble saving
Homeowners: You might consider this option if you're having trouble selling your home.
Other candidates
It can also be ideal for people going through tough personal times, including:
>>Divorce
>>Health problems
>>Rocky work history
DRAWBACKS
There are downsides, though.
For Buyers:
You have to wait to claim the tax write off for the home until you actually buy it.
If you decide not to buy after all, you lose any credits, or money, put toward the house.
Homeowners:
You'll have to wait until the home closes to see the profits
How can I get this option?
You can look online for a realtor who specializes in rent to own properties, or ask a potential seller yourself. Your best bet will be with a house that's been on the market for more than six months.
You may want to hire some outside help to locate problems within the home. You should consider hiring a home inspector. These professionals go through the house from top to bottom, looking at things like the heating and electrical systems, plumbing, roof, walls and foundation. If problems are found, the inspector will notify you and often suggest a specialist to make any necessary repairs. Armed with this information, you may be able to deduct the price of the repairs from the cost of the house. Or, you could ask that the current owner make any repairs, but be sure to put any agreement in writing.
A home inspection will give you a realistic picture of your prospective new home, so down the road, there won't be any surprises.
Even if you've owned your home for some time, you may also want to consider hiring a home inspector. A thorough inspection can help you identify problems in the making, so you can take preventative measures that may save you money in the long run.
Finding an Inspector
There are many ways to find a home inspector. Here are a few suggestions:
Realtor.
If you're buying a home through a real estate agent, ask him or her for a recommendation. Realtors usually keep a list of inspectors and should be able to give you names of several you can contact. According to the American Society of Home Inspectors (ASHI), 69% of homebuyers chose their inspector based on a recommendation from a realtor.
Word of mouth.
Ask a friend or co-worker for a recommendation.
Online
You can also find a home inspector online. Check out the various Web sites for national home inspection organizations. The American Society of Home Inspectors, the National Association of Home Inspectors, and the Society of Professional Real Estate Inspectors are three of the major associations.
Check Qualifications
No matter your source, make sure you check out the inspector's qualifications and experience.
Insurance.
Ask if the inspector carries insurance. Most professional inspectors carry malpractice and general liability insurance as well as workman's compensation. Don't forget, you'll be the inspector's employer. If he or she gets hurt on the job, you don't want to be responsible.
Association affiliation.
Find out if the inspector is a member of a national home inspectors' organization. Many of the associations review the inspector's work annually to make sure it's in compliance with the organization's standards and ethics.
Terms of agreement.
Talk to the inspector about a pre-inspection agreement. This is an important written contract of what the inspection includes and how it will be done.
Report timeline.
How fast will you be getting the report? If you're buying a home, you'll want the report well before the scheduled closing. That way, if repairs need to be made, you and the seller will have time to negotiate about corrections.
Extra services.
Does your inspector provide other services like radon and water quality testing? If this information interests you, you may want to find an inspector that can handle these services, too. Extra services should also be included in the pre-inspection agreement.
The Cost Factor
Most inspectors charge from $250 to $500 and up. That number can jump to more than $1,000 with extra services. You may want to watch out for inspectors who are offering to do the job for much less. It generally costs at least $100 in expenses just to complete the inspection.
Home Inspection Guarantee
A home inspection is not a guarantee that problems won't pop up after you move in. However, if you believe the problem existed at the time of the inspection and should have been mentioned in your report, you should contact your inspector. Misunderstandings and differences of opinion are often resolved this way.
If that doesn't work, your next step is to contact your local Better Business Bureau or mediation service to help you settle your disagreement. Litigation should be your last option. It can be very expensive and does not guarantee results in your favor.
Did You Know?
Nearly 99% of realtors recommend that buyers get a home inspection.
American Society of Home Inspectors
