Eight Costly Misconceptions About Home Inspections, Part 1

Eight! Count them! Eight costly misconceptions about home inspections.  My longtime friend, Doug Corbridge, is the owner of Premier Home Inspection in Billings, MT. And he’s one of the great home inspectors around.  Recently, he wrote an eight-point article about his profession and the mistakes homebuyers make when it comes time for the home inspection.  With his permission, I am blogging his remarks out to you in a series.  Herewith, Part 1.

 

“Inspections are a subject of much confusion. In fact, there are so many misconceptions about home inspections, I decided to offer the following consumer education information to help you, the consumer, make an informed, intelligent decision when choosing a home inspector. There is a good chance your realtor will provide you with 2 or 3 brochures, business cards or names of home inspection companies. This is a good starting point, however, before you choose you should have more information.

 

I’m going to share with you eight misconceptions about home inspections, which can be costly if not understood. I will also offer some recommendations and give you questions you should ask any inspection company before you let them inspect what may be the largest investment you ever make.

 

Misconception #1: You should wait as long as possible before getting your home inspection. 

 

No. Waiting until the last minute to get your home inspection leaves you in a position of not having adequate information you need to make an informed decision. Your contract most likely has specific dates in it which, if you don’t respond in a timely manner, can cost you the opportunity to cancel your contract on this house and still be able to recoup your earnest money. You need to have the inspection scheduled and completed as quickly as possible so if something significant turns up, there is adequate time to have a specialist help you understand the depth of the issue.  (My comment:  I agree.  And yes, it has happened.) 

 

 Misconception #2: You don’t need a home inspection if you are getting a home warranty. 

 

 No. As you probably know, very few homes are perfect. A home inspector is going to be looking for major concerns that you need to be aware of in the structural and mechanical areas of the home. Some inspections turn up items which are simply too expensive to repair or that may not be repairable. You will find most home warranties will not cover these items if they are pre-existing conditions. 

*One of the best reasons for having an inspection is to prove a problem was not pre-existing.

 

Misconception #3: One inspection is as good as another. One inspector is as good as another. One inspection company is as good as another. 

Being a contractor is very different from being a Professional Home Inspector. Home inspectors are responsible for evaluating all of the systems and components of the home — not just one aspect, like the brick or the framing. To be able to provide a competent evaluation of all of these elements takes formal education and training. Did the inspector attend one of the top home inspection schools, or did he complete a correspondence course, or have his brother-in-law show him how to inspect? 

Comprehensive continuing education and training is a must!  In Montana, home inspectors are not required to be licensed by the State.  Anyone can set up shop and call himself or herself a home inspector.”   

 

 

 …Are you shopping for a home inspector?  The misconceptions I’ve passed on here are absolutely on the money.  All inspectors are not alike; some are meticulous, careful, reasonable and well-trained, and some are not.  Your REALTOR cannot recommend a home inspector to you.  They CAN provide you with options and answer any questions you may have about each of the inspectors whose names they have given you.

 

Tomorrow I will share 3 more misconceptions, authored by Doug Corbridge, owner of Premier Home Inspection in Billings, MT. 

 

In the meantime, if you have questions about this topic or ANY of your real estate needs, call me at 406.869.7677.  Or Facebook me at the group BILLINGS.

 

  

  

 

 

 

 

 

 

  

  

  

 

 

 

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Do you know what it takes to buy a home?

Do you? Know what it takes to buy a home? And be a home owner?  There are all kinds of enticements out there:  interest rates continue to remain at historic lows; the housing market remains a buyer’s market; and there’s the Federal Government’s homebuyer tax credit.  With all of that, lots of people are thinking about jumping into home-ownership.  Are you?  And are you ready, really ready?  Kiplinger Magazine, a personal financial magazine, has all kinds of quizzed online to test your financial genius.  Take their quiz about homeownership.  Answer the questions honestly . You don’t get a prize for “right” answers, just an honest assessment of your readiness to be a homeowner. If you’ve taken the quiz , you’ve determined that,” yessiree, I’m ready!”, and you want to know more, Facebook me at http://www.facebook.com/marianboothgreen.  I’d love to hear from you!

Here’s the link:  http://www.kiplinger.com/quiz/should_you_buy_home/index.html?qid=52

Good luck!

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Tax Credit Deadline: What you must know

The homebuyer tax credit deadline is looming.  If you listen to the news at all or if you are looking for a new home, you are no doubt aware of the tax credits that are being offered for first-time homebuyers and repeat buyers, or “long-time residents”, as repeaters are called in the legislation.  Here are the key items that you need to keep uppermost in your mind in the next few weeks:

What’s the Deadline? In order to qualify, homebuyers, both first-time and repeaters, must have a binding written contract by midnight, April 30th, 2010.  The property must close – all papers signed, money transferred – by midnight, July1st.

What is the benefit? For first-time homebuyers, the maximum allowed credit is $8,000.  The maximum credit for repeat buyers is $6,500.

Who qualifies? To qualify as a first-time homebuyer, either the buyer or his/her spouse may not have owned a residence during the three years prior to the purchase.  To qualify as a repeat buyer, current home owners must have lived in their current home as their principal residence for five consecutive years of the last eight.

Are there income limits? The new law raises the income limits for people who purchase homes after November 6, 2009.  The full credit applies to taxpayers with modified adjusted gross incomes (MAGI) up to $125,000 or $225,000 for joint filers.  Those with MAGI between $125,000 and $145,000 -or $225,000 and $245,000 for joint filers – are eligible for a reduced credit.  Those with higher incomes do not qualify.

What properties are eligible? The Extended Home Buyer Tax Credit may be applied to primary residences, including single-family houses, condos, townhomes, and co-ops.

How do buyers get the benefit? Buyers can apply the credit to a 2009 tax return, filed on or before April 15, 2020; file an amended 2009 return; or apply the credit on their 2010 return, fled on or before April 15, 2011.

As always, where tax issues are in play, be sure and consult your accountant or tax attorney.  There are all kinds of questions that are beyond the overview of this article; your accountant should be able to answer them, because she or he knows your tax situation.

If you’re out there looking for a home, be proactive. Spring is the prime time for buying a new house and competition for houses heats up.  Coupled with the tax credit deadline, many houses are selling quickly.  One of them may be the one you want.  So, get to looking and be aware of the tax credit deadline it’s coming up.

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How to Avoid Homebuying Confusion

Buying a new home can be confusing, especially for first-time homebuyers.  I recently met with a client who is excited to move into his first home and start his life as a newlywed.  The trouble is, he doesn’t know what he wants. He finally realized this the other day, which led me to share some ideas with him.  If you’re going to be successful with your home search with a minimum of stress and wasted time, you have to have a game plan, a strategy.   Here are some tips for avoiding confusion, so that you can find the house you want to call home.

1) Determine specifically how much house you can afford. This means not only what the lender says you can afford, but what kind of payment you are comfortable making, economically and emotionally.  “Maybe $200,000 or maybe $240,000” are two different categories. A $200,000 house is much different than a $240,000 house.  So is the payment. So is the down payment.  So is the ability to qualify. Your REALTOR needs to have this information from you:     1.Your pre-approval letter, 2. Your down payment gift letter (if it applies).  A pre-approval letter is a letter from your mortgage lender that confirms that you have completed the preliminary process of loan qualification and tells you, your agent and the seller how much money the lender is potentially able to lend you.  Regardless of what type of loan you qualify for, a down payment – in cash – will be required.  If a relative is providing you with the down payment by gift, a gift letter will be needed confirming the availability of the down payment.  Have those two items with you when you meet with your REALTOR, or get them ASAP.  It will focus your time and your energy toward the houses you can afford.

2) Make a list of WANTS and DON’T WANTS: What does your ideal house look like?  What’s in it? Can you just not live without a fireplace? Do you want hardwood floors? Two bathrooms? Shower only?   Where do you want to live? What are the things that you simply cannot live with?  And where are you not willing to live? Write those down too.  Be honest with yourself. After you’ve made your perfect list, go back and prioritize. Star what features you’re willing to compromise on.  Share with your REALTOR.

3) Overlook cosmetic blemishes. Paint is cheap.  The hot pink walls are easy to fix.  So is the rubber ducky toilet seat.

4) Remember: If you don’t like it, don’t buy it. Conversely, if a house simply “feels right”, listen.  You may have found your house, your home.

Follow these simple guidelines, and you will avoid homebuying confusion and be on your way to your perfect place.

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