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16 Questions To Ask a Home Inspector Before, During, and After a Home Inspection

October 6, 2020

If you’re buying a house, you know that your home inspector will check it out and make sure it’s in decent shape. But if you want to get to know your home beyond its pretty facade, you should pepper your inspector with questions—a whole lot of them, in fact!

But when you ask those home inspector questions is as important as what you ask. To ensure you get the most out of your home inspection, here’s a timeline of queries to hit before the inspection even starts, during the actual home inspection, and well after it’s over.

Questions to ask a home inspector before the inspection begins

So, how do you separate a great home contractor from a merely good one? It boils down to interviewing home inspectors to gauge how thorough a job they’ll do. To help, here are some of the best questions to ask.

Bonus: This’ll also help you know what to expect! Knowledge is power, my friends.

1. ‘What do you check?’

“A lot of people don’t know exactly what a home inspector is going to do,” says Frank Lesh, executive director of the American Society of Home Inspectors.

Wondering what does a home inspector look for? A whole lot—1,600 features on a home, to be exact.

“We inspect everything from the roof to the foundation and everything in between,” Lesh says.

Going into the inspection with a clear understanding of what the inspector can and can’t do will ensure that you walk away from the inspection happy.

2. ‘What don’t you check?’

There are limits. For instance, “we’re restricted to a visual inspection,” says Lesh. “We can’t cut a hole in somebody’s wall.”

As a result, an inspector will often flag potential problems in the report and you will have to get another expert—a roofer, HVAC person, builder, electrician, or plumber—to come back and do a more detailed examination.

“Understand that we’re looking at what exists in the house today,” says home inspector Randy Sipe, of Spring Hill, KS. “I can’t see into the future any more than anybody else.”

3. ‘What do you charge for a home inspection?’

A home inspection costs around $300 and $600, though it will depend on the market, the size of house, and the actual inspector. Generally you’ll pay the inspector the day of the inspection, so you’ll want to know in advance how much and what forms of payment are accepted.

Lesh cautions against going with an inspector who quotes you a very low price.

“That’s often a sign they’re having trouble getting customers,” he says.

Spending on a good inspector will more than pay for itself in the long run.

4. ‘How long have you been doing this?’

Or perhaps more important: How many inspections have you done? A newer inspector doesn’t necessarily mean lower quality, but experience can mean a lot—especially if you’re considering an older home or something with unusual features.

5. ‘Can I come along during the inspection?’

The answer to this should be a resounding yes! Any good inspector will want prospective owners to be present at the inspection. Seeing somebody explain your house’s systems and how they work will always be more valuable than reading a report, and it gives you the opportunity to ask questions and get clarifications in the moment. If an inspector requests that you not join him, definitely walk away. Run!

6. ‘How long will the inspection take?’

Inspections often take place during the workweek, when the seller is less likely to be around. Knowing how much time you’ll need to block out will keep you from having to rush through the inspection to get back to the office. You’ll get only a ballpark figure, because much will depend on the condition of the house. But if you are quoted something that seems way off—such as a half-day for a two-bedroom apartment, or just an hour for a large, historic house—that could be a red flag that the inspector doesn’t know what he’s doing, says Lesh.

7. ‘Can I see a sample report?’

If you’re buying your first home, it can be helpful to see someone else’s report before you see your own. Every house has problems, usually lots of them, though most generally aren’t that big of a deal. A sample report will keep you from panicking when you see your own report, and it will give you a sense of how your inspector communicates. It’s another opportunity to ensure that you and your inspector are on the same page.

Questions to ask a home inspector during a home inspection

Ideally, you should attend your home inspection—in person or by video—and ask your home inspector anything that comes up right then and there. The reason: Rather than trying to decipher your home inspector’s (very technical) report, it’s much easier for this pro to actually show you what’s going on with the house.

To help you get this essential show-and-tell session rolling, here are a few important questions to ask a home inspector that will help you size up a house yourself, and keep it in good condition for as long as you hang your hat there.

1. ‘What does that mean?’

During the inspection, your home inspector will go slowly through the entire house, checking everything to ensure there are no signs of a problem. He’ll point out things to you that aren’t as they should be, or may need repairs.

Don’t be afraid to ask any questions about what the home inspector is telling you, and make sure you understand the issue and why it matters. For example, if the inspector says something like, “Looks like you’ve got some rotten boards here,” it’s smart to ask him to explain what that means for the overall house—how difficult it is to repair, and how much it will cost.

Just keep in mind that your inspector can’t tell you whether or not to become the buyer of the house, or how much you should ask the seller to fix (though your real estate agent should be able to help with that).

2. ‘Is this a big deal or a minor issue?’

For most people, buying real estate is the biggest purchase they’ll ever make. It’s normal to start feeling panicky when your inspector is telling you the house has a foundation problem, a roof or water heater in need of repair, or electrical, heating systems or an HVAC system that isn’t up to code.

Don’t freak out—just ask the inspector whether he thinks the issue is a big deal. You’ll be surprised to hear that most houses have similar issues and that they’re not deal breakers, even if the fixes or repairs sound major. And if it is major? Well, that’s why you’re having the home inspection done. You can address it with the seller or just walk away.

3. ‘What’s that water spot on the ceiling, and does it need a repair?’

Don’t be shy about asking questions and pointing out things that look off to you during the home inspection and checking if they’re OK, real estate–wise. Odds are, if there’s something weird, your inspector has noted it and is going to check it out thoroughly. For example, if there’s a water spot on the ceiling, maybe he needs to check it from the floor above to know if it’s an issue.

Ideally, your inspector will ask you if there’s anything you’re specifically concerned about before he starts the inspection. Make sure to tell him if this is your first real estate purchase, or if you’re worried about the house’s age, or anything at all that strikes you, the buyer, as a possible negative.

4. ‘I’ve never owned a house with an HVAC/boiler/basement. How do I maintain this thing?’

Flaws aside, a home inspection is your golden opportunity to have an expert show you how to take care of your house.

“Inspectors are used to explaining basic things to people. If you have an inspection question, ask it,” Lesh says. “Don’t expect your inspector to teach you how to build a clock, but we are happy to answer and explain how things work.”

5. ‘What are your biggest concerns about the property?’

At the end of the inspection, the inspector should give you, in broad strokes, a summary of what he found. You’ll get a written report later, but this is a great moment to get clarity on what the inspector thinks are the house’s biggest issues, and whether or not they require further investigation.

Often, it’s a good idea to call in another home inspection expert—a plumber, electrician, roofer, or HVAC professional—to take a look at anything the inspector flagged.

You should walk away from inspection day with a mental punch list of things that need to be addressed by either the seller or another expert. In some states, there’s a limited amount of time for these negotiations to happen, so you and your agent may want to hit the ground running.

Your official home inspection report will have more detail, but you should know what’s on it by the time you leave the home that day.

Questions to ask a home inspector after the inspection is done

What are some questions to ask a home inspector after he’s finished the inspection? Because, let’s face it, just staring at that hefty report highlighting every flaw in your future dream home can send many buyers into a full-blown panic!

Know the right questions to ask a home inspector afterward, though, and this can help put that report into perspective. Here are the big ones to hit.

1. ‘I don’t understand [such and such], can you clarify?’

Just so you know what to expect, here’s how it will go down: A day or two after the inspection, you should receive the inspector’s report. It will be a detailed list of every flaw in the house, often along with pictures of some of the problem areas and more elaboration.

Hopefully you also attended the actual inspection and could ask questions then; if so, the report should contain no surprises. It should contain what you talked about at the inspection, with pictures and perhaps a bit more detail. If there’s anything major you don’t remember from the inspection in the report, don’t be afraid to ask about it.

2. ‘Is there any problem in this house that concerns you, and about how much would it cost to fix?’

Keep in mind, most problems in the house will likely be minor and not outright deal breakers. Still, you’ll want your home inspector to help you separate the wheat from the chaff and point out any doozies. So ask him if there are any problems serious enough to keep you from moving forward with the house.

Keep in mind that ultimately it’s up to you and your real estate agent to determine how to address any issues.

“The inspector can’t tell you, ‘Make sure the seller pays for this,’ so be sure you understand what needs to be done,” says Lesh.

3. ‘Should I call in another expert for a follow-up inspection?’

Expect to have to call in other experts at this point to look over major issues and assign a dollar figure to fixing them. If your inspector flags your electrical box as looking iffy, for example, you may need to have an electrician come take a look and tell you what exactly is wrong and what the cost would be to fix it. The same goes for any apparent problems with the heating or air conditioning, roof, or foundation. An HVAC repair person, roofer, or engineer will need to examine your house and provide a bid to repair the problem.

Why is this so important? This bid is what your real estate agent will take to the seller if you decide to ask for a concession instead of having the seller do the fix for you. Your inspector can’t give you these figures, but he can probably give you a sense of whether it’s necessary to call somebody in.

4. ‘Is there anything I’ll need to do once I move in?’

Wait, you’re still not done! It’s easy to forget the inspector’s report in the whirlwind of closing and moving, but there are almost always suggestions for things that need doing in the first two to three months of occupancy.

Lesh says he sometimes gets panicked calls from homeowners whose houses he inspected three months after they’ve moved in. Although he’d noted certain issues in his report, the buyers neglected the report entirely—and paid for it later.

“I had a couple call and tell me they had seepage in the basement,” Lesh says. “I pulled up their report and asked if they’d reconnected the downspout extension like I recommended. Nope. Well, there’s your problem!”

Everything you didn’t ask the seller to fix? That’s your to-do list. Isn’t owning a home fun?

The post 16 Questions To Ask a Home Inspector Before, During, and After a Home Inspection appeared first on Real Estate News & Insights | realtor.com®.

Should I Waive a Home Inspection? Why Buyers Are Willing To Right Now

September 19, 2020

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By the time my husband and I put in an offer on a home (for the third time) in August, we were exhausted by the home-buying process—and we hadn’t even bought a home yet.

Even in the midsize town in northern Alabama where we wanted to buy, the real estate market was nuts. Homes were going under contract the same day they were listed, making it nearly impossible to see the house and feel confident enough to submit an offer before we were beaten to the punch by another buyer.

When we finally did go under contract on this third home, we learned of another issue: Home inspectors in the area were booked for two weeks and up, but our contract stated that we had only seven days to get an inspection done.

Up against a tight deadline, we considered an option that seemed like real estate suicide: Should we waive our home inspection?

While house hunting during this crazy time, we’d heard that many buyers were indeed waiving their right to a home inspection. Thankfully, our real estate agent was able to find a local inspector who had a last-minute opening. We got lucky, but it left me wondering: Is it ever OK to waive a home inspection?

Here’s what the experts have to say.

Should you ever waive a home inspection?

The problem we experienced with overbooked inspectors is a trend being seen on a larger scale across the country. From March through May, due to concerns over the spread of the coronavirus, many states weren’t allowing home inspections to happen, says Mike Wagner, president of the American Society of Home Inspectors and owner of RAL Inspection Services, based in Indiana.

Since then, in areas with low COVID-19 infection rates, home inspections have resumed—and the pent-up demand for their work has resulted in a backlog that’s slowing down real estate deals. This was especially problematic given home purchase contracts typically require an inspection be done within a week of the contract being signed by both parties.

If you’re in a hot real estate market where homes are getting multiple offers, there might be a temptation to skip an inspection when you really want the house. But waiving a home inspection comes with sizable risks.

The risks of waiving a home inspection

A home inspection is something that protects your financial interest in what will likely be the largest purchase you make in your life—one in which you need as much information as possible. For example, learning that a home needs repairs costing $20,000 or more could change your mind about wanting to buy it, or the amount you’re willing to spend.

Considering the health and safety of your family is also important. Home inspections can uncover potentially hazardous items in a home—such as bad wiring, unsafe heating or cooling equipment, or even structural issues—that the average person won’t likely notice with a quick look around.

A home inspection “is a few hundred dollars for your peace of mind,” says Jean Rosalia, a residential and commercial real estate agent based in Virginia Beach, VA. “As opposed to maybe tens of thousands of dollars down the road for something that you could not detect on your own.”

Why people are waiving home inspections during the COVID-19 era

Offers that waive a home inspection contingency can be more attractive to home sellers since there’s less likelihood that the buyers will find some expensive problem that they’ll demand is fixed before they move forward. Generally, waiving a home inspection is done to speed up the closing process.

While Rosalia personally doesn’t recommend waiving a home inspection, one option you have is to include a home inspection “for informational purposes” in your contract. This means that you won’t hold home sellers responsible for making repairs, or fronting the money for them. This could make sellers more likely to accept your offer.

This way, “the buyer will still be afforded the inspection, and the seller will know that there will be no negotiations or requests for repairs,” Rosalia says.

In this case, if there are major issues that arise from the home inspection, you can still back out of buying the home. You might have to forfeit the earnest money deposit you’ve put down with your offer, but not necessarily if you’ve worded your contract right. And even if you do lose your deposit, it might pale in comparison to paying for whatever required repairs the home inspection brings to light.

Just know that the more safeguards you place for yourself that might put the sale in question, the less likely sellers might be to play ball with you if they have alternative offers with fewer strings attached. Still, the main point is that an information-only inspection means you can go into the deal with your eyes open to the potential costs, and back out if you find flaws that feel like too much for you to handle.

Should you waive inspections in a condo or new-build home?

What about condos? Since they’re often part of a larger building, a home inspection might not seem as important. Same with new construction, since it hasn’t had time for wear and tear to accumulate.

“Even in a condo, there are things that can go wrong,” says Rosalia.

For instance, many items such as water heaters and HVAC units are still the responsibility of individual owners, warranting a home inspection to make sure these items are up to par.

You should always get a home inspection in a new-build home, too, because you never know what problems might come up.

Rosalia says she had a buyer who’d bought a new-construction home and, upon inspection, they discovered the stove had been wired into a ground-fault circuit, meaning that every time it reached a certain temperature, it flipped the circuit breaker.

The builder “fixed it before they moved in,” she says. “But we wouldn’t have known about it” without an inspection.

Is it ever OK to waive a home inspection?

Kelli Griggs, a real estate agent with Navigate Realty in San Francisco, says that if the home you’re buying is new construction and under builder warranty, or if the seller had existing reports within the past year, she might “potentially” be OK with waiving the right to an inspection if it was the only way to get your offer accepted.

But again, it comes down to the risk you’re willing to take.

“I look at it like a car: I’d never buy a used car simply on the word of the seller that it runs well,” she explains. “I’d have my mechanic look at it.”

Jennie Caterinacci, a real estate agent with HomeSmart in Scottsdale, AZ, says it might also be acceptable to skip a home inspection if you’re an experienced real estate investor or home flipper with $20,000 to $50,000 set aside in an emergency fund in case there are things wrong with major components of the home. But regardless of what you’re planning to do to a home, she says, “no one wants to buy a money pit.”

Bottom line: Spending a few hundred dollars on a home inspection is almost always money well-spent.

“If nothing else, it’s a mini lesson in home maintenance and a convenient honey-do list for the buyers if they decide to purchase the home,” says Caterinacci.

To find a licensed home inspector, you can search by state or name on ASHI’s website.

The post Should I Waive a Home Inspection? Why Buyers Are Willing To Right Now appeared first on Real Estate News & Insights | realtor.com®.

The Home Closing Process Amid Coronavirus: The Seller’s Guide to How Long Will It Take

April 17, 2020

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Selling your home during the coronavirus outbreak is no easy task. So if you’ve managed to find a buyer and accept an offer despite these challenging times, congratulations! You’re almost there. All that’s left is to close the deal.

Yet not surprisingly, COVID-19 has thrown a few wrenches into the home closing, too. That’s why, in the final installment of our series “Home Selling in the Age of Coronavirus,” we’re offering guidance on what home sellers should expect as they close on their home, and how to navigate these hurdles to stay safe and keep the deal on track.

How long will it take to close on a house now?

Not surprisingly, home closings are taking longer now. At the end of March, closing times averaged 60 days from the time an offer is accepted, up from 43 days in February and 26 in January, says Tendayi Kapfidze, chief economist at LendingTree. They’re likely to take longer still in April.

Why the holdup? In part, lenders have been swamped with processing refinancing applications due to the historically low mortgage interest rates.

“Generally speaking, most lenders are very busy with refis and enjoying record months in closings,” Kapfidze says. “Record closing months will typically lead to delays in days to close. Underwriting turn times are longer today.”

In addition to a backlog in refi underwriting, social distancing and shelter-in-place orders are delaying and complicating every step of the home closing—including home inspections, appraisals, and walk-throughs.

In some cases, home buyers are adding addendums to contingency timelines to account for these holdups, says Tomer Fridman, luxury and celebrity real estate expert at Compass.

If you’re a home seller who’s eager to close the deal or nervous it could fall through, here’s more on what could hold up the various stages of home closing, and why.

Home inspections

Typically, once a deal is reached, home buyers will send a home inspector to the seller’s home to vet it for any flaws. Typically, home sellers are present during inspections, but if this prospect makes you nervous, you can ask for a “remote home inspection” instead.

“We are offering clients the option of doing a ‘remote inspection,’ where we inspect the house alone and review the findings with buyers and sellers via a videoconference,” says Welmoed Sisson, a home inspector and author of “101 Things You Don’t Want In Your Home.”

Furthermore, “while we’re at the house, we use gloves, wash our hands, and wipe down things we touch with antiseptic cloths,” Sisson adds.

“We’re anticipating the need to do this for six months at a minimum, and probably longer,” he says.

Home appraisals

Traditionally, home appraisals—where an appraiser visits the house to assess its value—are required by lenders for any buyer who needs a mortgage. But to keep home sellers safe, the Federal Housing Finance Authority has instructed Fannie Mae and Freddie Mac to temporarily allow exterior-only appraisals or desktop appraisals during the COVID-19 crisis.

These appraisals use public records, multiple listing service information, and other data sources to identify details about the property—and don’t require going inside the home. That’s good news for sellers, although the process could end up taking longer as a result.

Walk-throughs

Social distancing is also affecting buyers’ final walk-throughs, with some being done virtually on FaceTime and others not happening at all.

“The majority of buildings in New York City are not allowing anyone other than owners to enter or exit,” says Peggy Zabakolas, real estate broker at Nest Seekers International in Bridgehampton, NY.

Home closings

Last but not least, social distancing may also delay closings, because some title company offices are closed and in-person gatherings of more than 10 people are prohibited, says Matthew Myre, CEO and lead agent at Berri Properties in Asheville, NC.

The way around this is, rather than having everyone gather in one room, various parties might sit in separate rooms and shuffle papers between them. Some closings are even taking place outside on sidewalks.

Are remote home closings possible?

States such as Georgia announced that, as of March 31, video closings are temporarily permissible—and more states may follow suit. However, remote or virtual closings are possible only in some places and cases, such as for cash transactions and when lenders allow it, Zabakolas says.

For instance, remote online notarization is allowed in just 23 states, but the National Association of Realtors® recently sent a letter to Congress asking lawmakers to expand it nationally to speed up real estate transactions during the pandemic while limiting in-person contact.

Just keep in mind that most of the delays in selling a home during the COVID-19 outbreak are beyond anyone’s control—and are a good thing in that they’re meant to protect home sellers (and buyers) from unnecessary exposure risks that might come from in-person meetings.

The post The Home Closing Process Amid Coronavirus: The Seller’s Guide to How Long Will It Take appeared first on Real Estate News & Insights | realtor.com®.

Ouch! 3 Times You Can Kiss Your Earnest Money Refund Goodbye

January 8, 2020

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The earnest money deposit—the cash you as a buyer offer to essentially call dibs on real estate—is one of the most important and misunderstood parts of the home-buying process.

Depending on location, home buyers can expect to put down anywhere from 1% to even 10% of the real estate purchase price as earnest money. (In some highly competitive markets, buyers are making even larger earnest money deposits in an effort to stand out.)

An earnest money deposit tells a seller that the buyer is serious about closing. Without earnest money, buyers could theoretically make offers on multiple homes, essentially taking them off the market until the buyers decide which one they like best.

Don’t worry—the seller isn’t going to run off to Aruba with your cash. Earnest money remains in an escrow account or with the title company until the real estate sale closes. And, if everything goes off without a hitch, that earnest money is transferred from escrow and put toward the buyer’s down payment and closing costs. So you can’t lose earnest money put up in good faith, right?

Not usually. However, earnest money is occasionally forfeited. Watch out for these three scenarios where the buyer’s earnest money could end up financing the seller’s trip to Aruba.

1. You waived your contingencies

In highly competitive markets, it’s becoming more common for buyers to waive contract contingencies regarding real estate financing or an inspection. You might be tempted to do the same—a hefty earnest money deposit without contingencies will make you more attractive home buyers. But putting down earnest money also comes with serious risks. You guessed it: You might lose your earnest money deposit.

The financing contingency guarantees that you’ll get a refund for your earnest money if for some reason your mortgage doesn’t go through and you’re unable to purchase the house. The inspection contingency allows you to renegotiate the price or demand repairs if serious defects are found during the inspection, or even back out of the real estate and get a refund of your earnest money.

If your contract doesn’t have such buyer protections and you run into trouble with the inspection, you won’t be able to get your money back from escrow if you abandon the deal. Most experts recommend that you not waive the inspection contingency, unless you’re planning on tearing the property down.

As for the mortgage financing contingency, waiving your right to cancel may be the only way to compete with all-cash buyers. But you have to be absolutely sure that you’ll be able to get approval from your bank. It’s not unusual for loan applications to fall through, even when the buyer had a pre-approval letter.

“I strongly encourage my clients to obtain a conditional approval before signing a noncontingent contract,” says Ivona Perecman, a New York City real estate broker and lawyer. “Otherwise, it may turn out that the bank that pre-approved you will not give you financing or offer a lot less worse terms and, consequently, you may lose the earnest money deposit.”

2. You ignored the timeline outlined in the contract

Your real estate contract usually sets a specific time frame in which you’ll need to secure financing, get the home inspection, have the house appraised, and be available for the closing. Generally speaking, as long as you’ve made a good-faith effort to adhere to the timeline, sellers will grant a reasonable extension if a lender drags its feet or there are other extenuating circumstances that delay things.

However, in some cases sellers may include a “time is of the essence” clause in the contract. Watch out for this phrase in your paperwork—it means the closing date for the sale is binding. If you can’t make it to close the real estate transaction on time for any reason, you as the buyer have breached the contract and could forfeit your earnest money.

3. You got cold feet

If you have a change of heart about the home you’re buying—but there’s no problem with the property or the financing—you likely will not get your money back.

“If a buyer changes her mind and was able to request the down payment be returned without consequence, then the whole idea of a contract would no longer be worth much,” says Marc Kaufman, a real estate attorney with Wexler Lehrer & Kaufman in New York City. “One party cannot simply walk away and default on a whim.”

The earnest money deposit serves a protection for the sellers when they think they have a buyer and take their home off the market. If late in the game the buyers decide they no longer want to make the purchase, the sellers get to keep the earnest deposit as compensation for the time and money they have to spend on listing their home again and looking for another buyer.

When it comes to real estate, a case of buyer’s remorse could be even more painful than a lost deposit. To avoid both, really make sure the home you’re bidding on is “the one.”

The post Ouch! 3 Times You Can Kiss Your Earnest Money Refund Goodbye appeared first on Real Estate News & Insights | realtor.com®.

What Does ‘Active Contingent’ Mean? A Home Sale With Conditions

November 27, 2019

What Does Active Contingent Mean? A Home Sale With Conditions

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Let’s say you’ve found your dream home online on the multiple listing service, but the status of the property is marked “active contingent.” What does “contingent” mean, and is the real estate still up for grabs? Does “active” paired with “contingent” mean that the property can still be yours, if you make the right offer to a seller?

Read on for some explanation about this real estate listing status and for some insight into making an offer that will make the seller and buyer happy when a property is labeled contingent.

What does ‘active contingent’ mean?

If a home’s status is “active contingent,” it means that the buyer has submitted an offer to the seller with contingencies, or issues that must be resolved before the sale of the property can be finalized.

The most common reasons a home is labeled contingent are: the home passing an inspection, the buyer getting approved for a mortgage, and the buyer being able to sell his old home.

Once the contingency is resolved, whether it’s the buyers getting approved for a mortgage, selling their property, or the seller’s home passing inspection, the real estate sale can move forward. The status of the real estate will change from “contingent” to “pending.”

What’s the difference between active contingent and sale pending?

The biggest difference between contingent and pending listing statuses in the MLS has to do with the presence of a contingency in the sale. Some contingencies, such as a home inspection or a buyer’s approval for a mortgage, must be met. But if a house is described as “pending,” it means that no contingency exists or that all contingencies have been met, and a sale is pending. Some homes may also be listed as “short sale contingent,” in which case the buyers may be working to get approval for a mortgage, and sellers are seeking more offers.

This, of course, leads us to the big question: Should a buyer put in an offer on a property whose status is active contingent or pending? Often, your real estate agent can review the MLS and help you decide on the best move.

Putting in an offer on an active contingent listing

It’s important to not get your hopes up too high—because a contingent listing is, in fact, likely to sell. It doesn’t mean, however, that you can’t test the waters when making an offer on the property.

Brendan O’Donnell, a real estate agent with Center Coast Realty in Chicago, advises buyers to submit an offer to the seller, unless the seller’s real estate agents explicitly say they aren’t showing the property anymore.

“If a seller knows they have an attractive backup offer, they might be more willing to let that first deal fall by the wayside if something comes up during the contingency period—and go with the second buyer,” says O’Donnell.

When a property is labeled contingent, the key, he says, is to make the backup offer to the seller as attractive as possible.

“Submitting a fair price, waiving contingencies, agreeing to buy as is, and showcasing a solid, local lender go a long way in showing you are committed and are a worthy buyer,” he says.

The post What Does ‘Active Contingent’ Mean? A Home Sale With Conditions appeared first on Real Estate News & Insights | realtor.com®.

Selling a House As Is: What It Means for Buyers

November 15, 2019

selling a house as is

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Selling a home as is sounds like a pretty sweet deal for sellers. Sellers don’t have to scurry around fixing the place up.

But what does an as-is sale mean for buyers? When looking through property listings and the term “as is” appears, some people see it as a warning.

Others, such as real estate investors, may see a house selling as is as an opportunity. That might get prospective buyers wondering what exactly does “as is” mean?

Selling a home as is

Technically, when a real estate agent lists a house to sell as is, it means the homeowner is selling the home in its current condition, and will make no repairs or improvements before the sale (or negotiate with the buyer for any credits to fund these fix-its). The term “as is” is rarely tacked on a property sales listing that’s perfect and move-in ready.

On the contrary, people often sell as-is homes that are in disrepair, because the homeowners or other sellers can’t afford to fix these flaws before selling (which would help them sell the home for a higher price).

Alternatively, a home may have been through foreclosure and is now owned by a bank, or the seller may have died and left the house to inheritors or an estate agent who have little idea what could be wrong with it but need to sell.

Whatever the reason, the current sellers aren’t willing to pretty up a home before selling it. They just want to sell the real estate and move on. All of this means that the buyer of this house inherits any problems a home may have, too.

When a real estate agent lists as home to sell “as is,” that doesn’t change the legal rights of the buyer. The listing agent must still have the seller disclose known problems, and the buyer can still negotiate an offer with the final sale, contingent upon a real estate inspection.

Pros and cons of as-is home sales

So how can “as is” be the aforementioned opportunity, if the buyer is taking on all those problems?

It all comes down to cash value. Those two short words in a listing usually indicate that the home may be considered to be a fixer-upper. The house will have a relatively low list price to start with, and the sellers might even entertain still lower offers.

A real estate agent may even list a house with serious problems as “cash offers only,” if the house’s problems could prevent it from qualifying for a mortgage.

If the prospective buyers happen to be contractors or handy with a hammer, are looking for a property to flip, or maybe just want an extreme bargain, the promise of an as-is sale could be music to their ears.

Cash buyers and corporate investors look for home sellers who want a fast sale, but they expect those sellers to offer a low list price in exchange.

Yet the downsides of an as-is property are obvious and should not be underestimated. Any number of things could be wrong with the house that are not immediately apparent to the eye. Buyers might think they’re getting a killer deal, but they could also be throwing their life savings into a black hole.

Should you buy a house that’s selling as is?

Now that you know the pros and cons of an as-is home sale, you might be wondering whether to move ahead with the sale—and how. Since these sales can be bargains, they are worth considering, although there’s one precaution buyers will definitely want to take prior to the sale: a home inspection.

A home inspector examines the house from basement to rafters and will point out any problems plaguing the place that may make the buyer want to reconsider the sale. The problems can be current or potentially in the buyer’s future, such as an old roof that may need replacing five years later.

A real estate inspection costs around $300 to $500, and typically occurs after the buyer has made a sales offer on real estate that’s been accepted and put down a deposit.

The buyer, not the seller, pays for the inspections—which makes sense, because that way the inspector is not working for the seller.

On houses that aren’t selling as is, buyers may use problems found during the inspection to demand that repairs be made (or that credits be given so they can make those repairs themselves).

While as-is home sellers have already made it clear they won’t lift a finger on that front, an inspection still serves an important purpose for buyers before the sale.

Provided the buyers place an inspection contingency in the contract, this means that if the inspector unearths problems, the buyers don’t want to address, they can walk away from the deal with deposit in hand.

“You should always elect to do a home inspection, especially on a bank-owned property where no one knew how the home was cared for and no one knows what happened right before the past owners left the property,” says Winston Westbrook, a broker and owner of Westbrook National Real Estate Co. specializing in short sales and distressed real estate.

“Yes, you lose out on the cost of the home inspection, but the cost of the home inspection is well worth it, considering the headache you would have had in the future trying to make the house livable.”

On the other hand, if the inspection reveals additional problems, you might consider offering a lower price based on estimated costs of home improvement.

Remember that, despite what the seller says in the real estate listing, a real estate deal is still open to negotiation. If the sellers have a property on the market and it doesn’t sell, they may be open to selling at a lower price.

The sellers may even make certain fixes requested by home buyers, if that’s the only way they can sell the house.

Unless it’s a hot real estate selling market and other potential buyers are competing with you, the listing agent knows that the property won’t sell until you get a deal that works for you.

The post Selling a House As Is: What It Means for Buyers appeared first on Real Estate News & Insights | realtor.com®.

Home Inspectors Tell All: Strange but True Tales From the Trenches

November 5, 2019

BrandyTaylor/iStock

Home inspectors go where none of us particularly wants to go—into all the nooks and crannies around our homes, both inside and out. So you can bet that they’ve seen it all. You know—all that stuff that you don’t want to think about happening in those dark and creepy spaces.

Wait, actually we do want to know. (Is it masochism?) So we asked home inspectors who’ve been in the biz for a long time—and boy, did they deliver, with stories ranging from Stephen King–level horror to just downright weird. Check out some of the crazy things these home inspectors have witnessed. It’s all in a day’s work!

It’s a zoo in there

“Some of the nastiest stuff we find is animals—dead ones in attics or crawl spaces, which are always disgusting, and live ones, which are always scary,” says Reuben Saltzman, president of Structure Tech Home Inspections in Minneapolis. “In Minnesota, we usually find raccoons and squirrels, and inspectors in the Southern part of the country find a lot worse.”

There have been drowned frogs under water heaters, cooked mice in furnaces, frozen porcupines in crawl spaces, and dead fish on a roof. Was it a bird that somehow dumped it there, or something weirder, Saltzman wonders?

“We’ve also found wasp’s nests the size of basketballs inside of attics, and in the basement at the ceiling rim joist, and homeowners who didn’t know they had wasps,” Saltzman adds.

Bruce Barker, founder and president of Dream Home Consultants, in Cary, NC, has collected close to 6,000 photos documenting things like fried lizards and mice inside electrical panels, snakes in basements and crawl spaces, and even a black widow spider.

“We’ve found termite tubes hanging down from the ceiling. Termites need soil to travel and live, so they build tubes out of mud,” he explains. “It looked like there were stalactites hanging down.”

Then, of course, there’s the mass quantities of bird poop, which is nasty, toxic stuff.

Puzzling decisions

Home inspector horror stories
One beam holding up an entire deck.

Reuben Saltzman

“One of the craziest things that I’ve ever seen was a boat trailer being used as the foundation for a home,” Saltzman recalls.

“In the crawl space, I saw a tire half-embedded in concrete. I had to stare at it for a little while to figure out what I was looking at,” he says. “And I realized the whole addition was built on top of a trailer.”

Sometimes projects are half-finished, or half-baked, like a deck being held up by a single, wobbly post.

“This puts the ‘can’t’ in ‘cantilever,’” Saltzman quips about one memorable photo featuring a doomed deck.

Perilous plumbing solutions

Saltzman frequently discovers homeowners have tried to fix leaky plumbing with whatever materials they have on hand. Contrary to popular belief, duct tape does not, in fact, fix leaky pipes, shower wall tiles, or drains, he says.

“People will use caulk, radiator hoses, hose clamps, vice grips—just the craziest stuff—to keep water from coming out of a place where it shouldn’t,” he says.

This sparked some concern

Home inspector horror stories
Definitely an electrocution hazard

Bruce Barker

Perhaps the most alarming things home inspectors come across involve electrical systems and outlets in a home, Barker says.

“I’ve seen people not putting the wire connections in boxes, and just leaving them hanging out. If I had a dollar for every one of those, I wouldn’t have to crawl through crawl spaces anymore,” he says, noting that this is a major fire hazard.

Also in the “What were they thinking?!” department: Another home featured rows of Christmas lights strung directly over a pool (see image above). When the water fountain feature is activated, the swimmers beneath could get seriously injured from electrocution.

Ridiculous roofs

One homeowner strategically placed a basketball net with its glass backboard leaning against the roof, making it the ideal magnifying glass fire-starter on a blazing sunny day. Saltzman has also seen a roof so covered in moss and plant debris, it should have been mowed.

Barker has been amazed to see turbine vents in older houses that have lost their covers, unbeknown to the homeowners, or worse, have been covered with strange things—like an upside-down Halloween candy bucket.

Makeshift chimney repairs are often laughably ineffective, adds Barker, who has seen flammable asphalt material used to fix crumbling chimneys.

Weird and wacky windows

In older homes, it’s not uncommon to find wooden window frames that have seen better days, Saltzman notes. What’s odd are the homeowners who think up outlandish ways to fix them.

“One of my favorite photos of all time was taken 15 years ago: Somebody had taken spray foam to fill in all the rotted wood, and then cut the spray foam to match the profile of the wood, which they painted to match,” he recalls.

Deal-breaking disasters

Other head-scratching discoveries Saltzman’s team has made include a mysterious pile of leaves in the attic, scissors embedded in an electrical panel, a downspout aimed squarely at an electrical outlet, a roof fascia repaired with a hockey puck, and a bunch of unopened bags of insulation in an attic. (Pro tip: A home will always be warmer when insulation is actually laid out and not trapped in plastic.)

It’s not just horrifying for the home inspectors—all this weird stuff could kill a deal. Once potential buyers see things like mushrooms growing out of a floor drain, a crawl space filled with animal excrement and spider webs, or frost in the attic, they’ll wonder what else hasn’t been maintained, Saltzman says. And often, they’ll be spooked enough to walk away.

“We’ve got about 20 inspectors on my team,” he says, “and between all of us, every day someone decides they’re not buying a house based on what we found.”

The post Home Inspectors Tell All: Strange but True Tales From the Trenches appeared first on Real Estate News & Insights | realtor.com®.

Do You Get Your Earnest Money Back If You Can’t Get a Mortgage?

October 29, 2019

IvelinRadkov/iStock

After you make an offer on a house and it’s accepted by the seller, you’ll be asked to put down an earnest money deposit to show your commitment to this purchase. But while you might be gung-ho to move ahead, the deal could still fall through if you can’t get a mortgage.

Which begs the question: If financing fails to happen, do you get that earnest money back?

In most cases, yes—that is, if you take a few precautions. Here’s more on how to protect your earnest money during the home loan process.

Mortgage pre-approval

It’s best to find out if you can get a loan—and how much—before you start house hunting. That alone could help you protect your earnest money.

Here’s how it works: You approach a lender and explain that you’re ready to go house hunting. The lender asks you for details about your finances—usually copies of your pay stubs, tax returns, and the like.

The lender then comes up with an amount it’s  willing to lend you to buy a house. This process is known as a mortgage pre-approval.

Getting pre-approved for a loan will help you when it comes to choosing a home that’s within your price range. That way, you won’t put down earnest money on a house only to find out the bank isn’t willing to lend you enough to buy the place.

Financing contingency

Another way to protect your earnest money is to include a financing contingency in your real estate contract. Basically this means that the purchase of this property depends on your getting a loan first. If a loan can’t be secured, then you won’t buy the house—and can take back your earnest money.

A real estate attorney can help draw up a contract with contingencies that protect you and your earnest money, says Scott Browder, broker in charge at Wilkinson ERA Real Estate in Charlotte, NC.

If there’s no contingency, you are out of luck—and the seller will get to keep that earnest money.

The lender appraisal process

The lender appraisal process is another place where things can get tricky. Your bank may have said you’re qualified to take out a loan large enough to cover the cost of the home you want to buy, but to ensure its money isn’t at risk, the bank will send an expert known as an appraiser to the home to evaluate just how much it’s worth.

If the bank’s appraiser doesn’t feel the house is worth as much as or more than the agreed-on asking price, the bank may not approve a loan that large, even though you were pre-approved.

If that happens, there are a few options: The seller can lobby for another appraisal, which will hopefully increase the amount the bank is willing to loan. A buyer can put up a heftier down payment. If either option is manageable, you’ve saved your earnest money!

If neither option is possible and you must walk away from the deal, you may still be able to hang onto that earnest money if your financing contingency states you need a loan of a certain amount to buy the house. That way, if your loan amount falls short, you can cut your losses and keep your earnest money.

How to protect your earnest money deposit

If your loan is large enough to cover the costs, you should be all set, right? Well, usually, says Browder. But even with a pre-approved loan, a buyer can still be denied financing as the closing date nears, especially if the buyer has major financial changes such as a job loss or a credit score decline.

Browder is quick to warn his clients not to make any big purchases or any drastic moves that could affect their credit score between mortgage pre-approval time and the closing of the real estate deal.

“There is one final credit check right before closing,” Browder says, “so no buying furniture or anything for that matter!”

That final credit check could cause financing to fall through late in the game. Once again, if you have a contingency in place that covers a loan falling through, you should get your earnest money back. But if the contingency isn’t there, you’ll lose that money.

The post Do You Get Your Earnest Money Back If You Can’t Get a Mortgage? appeared first on Real Estate News & Insights | realtor.com®.

8 Best Home Improvements to Make Right After Moving In: Have You Done Them All?

August 27, 2019

hh5800/iStock

Getting ready to move into your new home? Before you settle in, there are some important home improvement projects you’ll want to tackle.

We totally get that home improvement is probably the last thing on your mind while you’re unpacking boxes, but trust us. You’ll regret not tackling these tasks while your home is a blank slate. Some of these projects are just easier to do before your furnishings are all set up, whereas other things are essential for your safety.

Curious about what you could be missing? Take a look at these eight essential home improvements to do after moving in—or even just before—to start your new life right.

1. Change the locks

Here’s a basic safety check: Those old locks at your new house need to be replaced or rekeyed, says Sarah Fishburne, director of trend and design at The Home Depot.

It’s not that you shouldn’t trust the sellers—it’s that you shouldn’t trust all of the people who’ve had contact with those keys over the years, any of whom could have copied the keys for some unsavory purpose.

Unfortunately, more than half (52%) of baby boomers and about a third of Gen Xers (33%) and millennials (31%) who moved in the past year have not changed their locks, a recent Home Depot survey found. Don’t join them.

2. Change alarm batteries

Making sure your fire and carbon monoxide detectors have fresh batteries may not seem like a pressing issue when you’re in the middle of a stressful move, but it’s the kind of thing that gets ignored and then forgotten. It’s better to deal with it now, when the home is empty and you can replace the old batteries without having to move furniture to make way for a ladder.

3. Caulk cracks and gaps

Using caulk to seal cracks around bathtubs, windows, doors, and other crevices around the house will help you stop leaks, drafts, and other nuisances that could inflate your utility bills.

“Caulk serves multiple purposes: It lowers heating and air-conditioning bills by reducing airflow into and out of the home; it prevents moisture that can cause wood rot, mold, mildew, and water damage; and it keeps insects and other pests out,” says J.B. Sassano, president of Mr. Handyman.

Pro tip: Mark Clement of MyFixItUpLife recommends using a latex-based elastomeric caulk, specifically DAP Dynaflex 230.

“It’s versatile: You could use it for molding, repair for paint jobs, both interior and exterior,” Clement says. “It’s the best jack-of-all-trades caulk.”

4. Spackle holes

Cracks, scratches, and holes in walls can form over time from regular wear and tear, or simply from nails that were used to hang artwork. A bit of spackling and spot painting will make rooms look fresh again, says Fishburne.

Nearly 3 in 5 (59%) new homeowners patch and paint their walls themselves, a Home Depot survey found. If you have only a few holes and scratches, you can fill them with spackling compound, which is sold in small qualities. For a greater number of gashes and holes, use joint compound, which is sold in quarts or 5-gallon buckets.

When you’re done spackling, you’ll want to repaint those areas. If you don’t have any of the original paint lying around (ask the seller if there’s left any), peel a dollar-size piece from the wall and bring that to your local paint store, which can match the color.

5. Build extra storage

If your new home is short on storage space, installing some storage units around the house can make your new home a lot less cluttered after you move in.

Specifically, entryway storage is crucial, especially in the winter, when puffer jackets, snow boots, and scarves demand extra space. So, consider mounting a shelving unit near your front door or in your mudroom (or both).

The only tool you’ll need is a power drill. If you don’t have one, you can rent one from a hardware store—or, better yet, borrow a drill from one of your new neighbors.

6. Childproof your new home

If you have young kids, take a day to childproof your new house. After all, accidental injuries are the leading cause of death in children aged 14 and younger, and more than a third of these incidents happen at home.

Installing safety gates at the top and bottom of all stairs is a must for small children. Choose a gate model that needs to be mounted with nails or screws to the wall or banister, rather than one that stays in place with tension, which kids can potentially push out of place, says Sharalyn Crossfield, a child safety expert and owner of Gate Maven Childproofing Services.

Blind cords are another problem—every day, at least two kids head to the ER for blinds-related injuries, often involving little ones getting entangled in (or strangled by) these strings.

To keep window blind cords and strings out of a child’s reach, place them on high, wall-mounted hooks.

7. Deep-clean carpets

If your new home has older carpets that are crying out for a deep clean, do it before you move in so there’s no furniture in your way.

Going up against deeply embedded dirt? You’ll want to rent a powerful, industrial-style carpet-cleaning machine such as a Rug Doctor, which sprays hot water with a detergent over the carpet and extracts it with a high-powered vacuum. These have more washing and sucking power than most consumer carpet cleaners, but they’re expensive to buy—about $400 to $700—so it’s more economical to rent one from a hardware store for about $25 to $30 per day.

Transporting the equipment and operating the machine can be cumbersome, but it does a better job cleaning your carpet than a regular vacuum cleaner and is less expensive than hiring a professional carpet cleaning service, which costs on average between $121 and $233, according to HomeAdvisor.

8. Clean hardwood floors—without ruining the finish

This is another task you’ll want to tackle before moving in so that you don’t have to move heavy furniture around to get the job done. Using the right cleaning solution is crucial. Most wood floor installers or manufacturers recommend cleaners that contain isopropyl alcohol, which dries quickly, and are available at home supply stores.

To make your own solution, add a capful of white vinegar to a gallon of water, which will help dissolve grease and grime on the floor without stripping the finish.

To remove shoe scuff marks, rub marks with a tennis ball. Whatever you do, do not clean wood floors with a steam mop, says Brett Miller, vice president of education and certification for the National Wood Flooring Association, in St. Louis.

“Steam is horrible for wood floors,” he says. “It opens the pores in woods and damages the finish, causing irreversible damage to any wood floor.”

Jamie Wiebe contributed to this report.

The post 8 Best Home Improvements to Make Right After Moving In: Have You Done Them All? appeared first on Real Estate News & Insights | realtor.com®.

Doing This One Thing Before Putting Your Home on the Market Can Help Sell It Faster

July 17, 2019

AndreyPopov/iStock; realtor.com

You’ve lived in your home for years and haven’t exactly been on top of regular maintenance tasks. Now, your windows are covered in plastic wrap to cut down on the cold drafts, your ceiling seems to be leaking, and those shrubs you planted to conceal a few small cracks in the foundation just aren’t cutting it anymore.

Hey, we’re not judging! But if you’re ready to put your home up for sale, know this: Buyers and their agents are going to zero in on all those things that need doing—as well as some things you hadn’t even noticed yourself.

So why not get ahead of the curve by hiring a licensed home inspector who can pinpoint what needs fixing?

Of course, most sellers don’t get their homes inspected before listing them, because the buyer usually orders an inspection during escrow, says Marc Lyman, a Realtor® with Pacific Sotheby’s International Realty in San Diego, CA. And who wants to pay for something twice?

But if you’re willing to invest the time and money, a thorough inspection before listing your property can make it easier to price your home, manage repairs, and even help sell it faster—and for more money.

So what are the some of the reasons why a pre-listing inspection makes sense? Let’s take a look.

It can save you if you’ve neglected home maintenance

If you have a busy life—or maybe even if you don’t—chances are that obsessing over regular home maintenance might not be your No. 1 priority during downtime. Trouble is, letting painting, roof repairs, and other routine chores slide can lead to bigger issues down the road, says Chicago-based Frank Lesh, ambassador for the American Society of Home Inspectors.

“In a lot of cases, people think, ‘I’ve been here for 30 years; the house is fine. There’s nothing wrong with it,’” he says. “But they’re looking at it with rose-colored glasses.”

Instead of worrying what a buyer’s inspector will uncover—and which could potentially kill the sale—be proactive with a pre-listing inspection, Lesh says. This way, rather than being blindsided, you can then decide whether to make the necessary repairs or to account for that deferred maintenance by reducing the list price. Which leads us to…

You can make more a bigger profit on your sale

Sure, a home inspection that you don’t have to do is going to cost money. (An inspection for a 1,200- to 1,500-square-foot house in an average market, for instance, will cost between $350 and $600, Lesh says.) But as the saying goes: Sometimes you have to spend money to make money.

After all, if you invest a little more to repair and spruce up anything the pre-inspection reveals, you can justify listing your home at a higher price, Lyman says. Plus, he adds, in most states, home improvement repairs you carry out before selling your house are deductible from the profit you make from the sale.

Sometimes, just knowing that a pro has given the house a proper once-over can persuade a buyer to make a bid (assuming that you actually follow the inspector’s recommendations).

“It minimizes surprises for a buyer, and can give a buyer more confidence in the property,” Lyman says.

You won’t have to scramble to fix things at the last minute

Once a buyer’s inspector submits a report, sellers are usually faced with two choices: If problems are found with the house, they can then either slash money from the sale price, or opt to carry out repairs before the closing date. That often leaves sellers in the lurch, having to get work done pronto—and sometimes paying a premium for the rush work.

After a pre-listing inspection, sellers can research contractors and make the necessary repairs within a time frame of their choosing, so that everything is ready before potential buyers even visit the property.

It’ll minimize back-and-forth negotiation

Buyers often use their home inspection as leverage, asking the seller (that’s you!) for steep discounts based on what their inspector’s report reveals. Not surprisingly, the buyer’s inspection is often where the deal falls apart.

If you’ve already uncovered the issues and addressed them, you can raise the price of your home accordingly, Lyman says. “That gives the buyer less leverage in the request for repair process,” he explains.

Also, in red-hot markets where multiple bids come fast and furious, there’s always a chance that buyers might accept your pre-listing inspection without insisting on doing their own. This can make for a quicker sale, Lesh says.

But make sure a pre-inspection doesn’t work against you

As advantageous as a pre-inspection can be, don’t forget that the inspector’s report could be a double-edged sword: Once you know about a problem, you can’t ignore it, Lyman says.

Sellers are legally obligated to disclose any problems that a home inspection unearths.

“For sellers unwilling to do repairs, their own inspection could be used as leverage to negotiate on price and in the request-for-repair process,” he says.

Before committing to a pre-inspection, find out what other sellers in your area are doing. Your agent can help guide you on whether it’s necessary to sell for more, or if there’s a better—and more affordable—strategy for getting your home sold.

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