Why Not To Waive Your Inspection In This Market

A home inspection is one of the most important ways to protect yourself when buying a home. Home inspection is an intensive assessment of the fundamental systems, physical structures, and appliances. It happens after a buyer and seller have found common ground on the purchase price and signed a purchase agreement to seal the deal.

 

Buyers request for home inspections. The aim is to help them get a professional opinion of the physical condition of the building by a neutral third party. According to Keyrenter New England, assessment gives the buyer the information they need to make an informed decision on whether the home is a good deal or not, based on the condition of its physical structures, crucial systems, and appliances.

 

There are three primary reasons for doing home inspections:

 

• Sellers are often under no obligation to disclose their property’s condition. Some sellers will even go as far as hiding facts about a building if they will negatively affect the sales price.
• Most buyers are not experts on buildings. They look at the house from the perspective of its appeal. They do not have the knowledge, skills, or tools to detect underlying problems with the home.
• Buyers need to know that they are getting their money’s worth. If they have information about issues that can cost them money in the future, they can factor those into the negotiations.

 

Why buyers waive the home inspection and reasons why it is a bad idea

 

Home inspections protect buyers and help them get the best deal when buying a home. Why would any buyer ever think of waiving the home inspection if this is the case? That happens quite often in a seller’s market. In a seller’s market, buyers are at a disadvantage because the inventory of for-sale homes is low, and you have many buyers chasing the few available homes.

Buyers may waive the home inspection:

 

• When they are in a bidding war with other buyers; waiving the home inspection can make their offer more attractive to the seller and help fend-off competing bids.

 

• To save costs; Buyers who look for ways to reduce the closing expense on the home may decide to waive the home inspection.

 

• To accelerate the purchase process; A buyer might think it proper to waive their right to have a home inspection to complete the purchase faster.

 

Why you should not waive a home inspection

 

Waiving the home inspection is never a good idea in any situation. Here is why

 

1.      You can’t tell the condition of a house just by looking at it

Buyers often waive the home inspection because they assume a home that looks good must be in good condition. But the truth is many of the more significant issues with a house are often invisible to the average buyer and can be stressful once you own the house. A property can be on the edge of collapse, and you would not know it unless you have the professional training to detect such things.

 

2.      You could saddle yourself with enormous costs for years to come

A home inspection can save you from buying a home with significant defects. Some of the problems with a home may only become apparent many months after purchasing the house. Furthermore, those issues can keep taking money out of your pockets for years to come. To make matters worse, you may not find another buyer to take the property off your hands.

 

3.      You really can’t avoid the home inspection

The only thing you can do is waive a pre-purchase home inspection. But after you have bought the building, you will eventually need a home inspection to determine what work the house needs. But by then, you will no longer have the ability to use the home inspection as a negotiating tool to get a better price for the property.

 

Instead of waiving the home inspection, do this

 

If you are toying with the idea of waiving the home inspection, you can:

 

• Include an escalation clause in your purchase offer: This automatically increases your bid by a certain amount above any competing offers. So even if another buyer comes in with an offer higher than yours, the seller knows they can still get, say, $1,000 above that offer from you.

 

• Be fully approved: If you can show the seller a mortgage preapproval letter, you gain the edge over buyers who cannot. It shows you are serious and have the means to close the purchase.

 

• Request an informational inspection: Informational inspections are different from an inspection contingency in that you waive your right to cancel the transaction based on the findings of the home inspection. With an informational inspection, you cannot ask the seller to pay for issues you discover. It isn’t the best, but it will let you know what you are getting into.

Do you suspect mold in your attic? Wonder why it’s there? Don’t just clean it! Stop it from happening again. Most likely its due to poor air sealing. Yes attics need ventilation to the outdoors typically, however thats not what causes the fungal growth. Humid Indoor air migration from your living space to the attic which condenses on the sheathing is the most common cause… but usually the last thing fixed. Did you know that your body puts about a 1.25 liters of water a day into the air in your home just from breathing and sweating? or that a family of 4 can put about 3.5 gallons of water into your indoor air on a normal day? Mold only needs 3 things to grow. Mold spores (they are everywhere) organic material (dust on your walls is enough) and moisture. All you can combat is the moisture. Get rid of the moisture feeding the mold, and you get rid of the mold. Simple as that. Next time you have mold remediation done in the attic ask if they solved the problem, or did they just prolongue the inevitable.

So you made an offer to buy a home and your Realtor just told you that you NEED to get a Home Inspection. Ok then. What next?

First things first. You need to find and hire a Home Inspector and you probably only have 7 to 10 days to schedule all of your inspections per your purchase agreement with the seller. Not to worry, most Home Inspectors are use to rushing around last minute. You may get a list of local Inspectors from your Real Estate Agent, or you may have to look for one yourself. If you use Google or any other means just be sure to check if they have 5 star reviews. The more the merrier! Like NH Home Inspector LLC at www.nhhomeinspector.biz.

Or just ask family and friends for suggestions.

Your Home Inspector will ask you an array of questions like how large is the home? Where is it located? Does it have a private well or septic? These questions are to help figure out the cost of the inspection and to see if you are interested in getting water sample tests done, Radon tests done, or a septic evaluation. I recommend all of these if applicable! The cost of your standard home inspection should be about $350 for a small home/condo and about $50 more for every 1000 square feet. This is just an estimate and every Home Inspector has different pricing.

Other services and pricing commonly added to a Home Inspection are as follows: (if done during and inspection)

Radon air testing- $80 to $120

Radon water testing- $50 to $100

Standard water testing- $100 to $150

Septic evaluation- $230 to $350

Other less common services:

Limited (spot) Mold testing- $150+ depending on how many samples taken

Full Mold Testing- $400+ depending types of samples, and how many taken.

Lead testing- $400 to $1000+

Well Flow Testing- $75 to $350

Next you will schedule a time and day for your home inspection. You will want to be at the inspection if possible. This way you can see in person the things your inspector calls out, and you can ask him/her as many questions as you can think of. Yes ask ask ask. This is the best opportunity to learn as much as you can about your soon to be new home. The inspection will last between 2 and 4 hours on average.

Things you will want your inspector to do, and the good ones will do no matter what:

On the exterior of the home your inspector will/should –

Walk on the roof if possible. If too steep it should be observed from a ladder, or a drone, or extended pole camera.

Check the outside of the chimney and the chimney top.

Check the siding, trim, doors, and windows.

Check the grade of the property near the home.

Check retaining walls and drainage.

Check foundation.

Check decks, porches and garages.

Check for visible and obvious structural issues.

On the interior of the home-

Check all walls, floors, ceilings and interior doors and a handful of windows.

Check the basement and or crawlspace.

Check the attic.

Check all visible plumbing and fixtures.

Check most electrical receptacles and lights.

Check the electric panel and grounding.

Check the heating equipment, water heater and fireplaces etc.

Check stairways and railings.

Check all ventilation and AC’s if the temperature is above 65 degrees F

Test all appliances.

Now that you have a better idea of what your Home Inspection will consist of, here are some tips on how to know you have a great Home Inspector. Your Inspector should be kind and patient with you. They should have a non biased attitude toward the home. They should be able to answer many technical questions as well as ideas on how to fix the items that are being called out as defects. Your Inspector should be taking his/her time and even explaining how systems work in the home. Inspectors that are in a rush tend to miss things. That being said it is common for small things to be missed. No Inspector is perfect. Your inspector should not miss the big ticket items however.

Do not confuse “Shiny Offers” with great inspectors. Glitz and Glam Inspectors often offer things like 90 day warranties (which are actually only 22 day warranties) This does not necessarily mean they are good at what they do. In fact some Inspectors hide behind the glitzy things to appear more professional and to reduce their own liability. A great Inspector will stand behind his/her Inspection and offer help in a dispute even without a shiny 90 day warranty. This does not mean all warranties are bad. Just be warned that not all Inspectors are the same. Not all cheap Inspectors are good, and not all good Inspectors are cheap.

Q- How much money can I finance for renovations through the FHA 203K?

A- There are two options available through the 203K program. Option one is the Limited 203K where there is no minimum and a maximum of $35,000 in renovations, repairs and FEES. I emphasize the term “fees” because this will ultimately take away from the total you can use for renovation costs. On average you will spend about $800 in fees for the Limited 203K  version. Option two is the Standard 203K where there is a minimum of $5000, and the maximum is set by your local County. Some counties limits are over $600,000 in finance totals. A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the nationwide area mortgage limit, or the maximum Loan-to-Value (LTV) ratio.

Q- Do I need to hire a 203K Consultant in NH and Maine?

A- HUD guidelines require that a Certified 203K Consultant must be used for all Standard 203K loans. A Consultant is not required if you are using a Limited 203K, however we recommend using a Consultant for every Renovation loan as well as taking advantage of a “Feasibility Analysis” first to see if the home in question is even going to fit in your budget. Don’t waste time and money getting all your ducks in a row on a property just to find out that you cant afford the renovations. Another reason you need or should want a 203K Consultant is that one of the Consultants duties is to submit a Specification of Repair, or some call it Scope of Renovations or (SOR), and Cost Estimate to your lender as part of the Work Write Up. These will be used ultimately for picking a contractor and figuring out the final cost of renovations.  Since a Consultant is not performing the renovations and will not make any profits from the project, he/she will have the clearest view of what those renovation costs should be. They are being paid to do so and 203K Consultants are required to use specific cost estimation numbers based on industry standards in your area. Its no secret that some Contractors can be excessively expensive, and some can undercut themselves too much to get the job which can put the entire project at risk when the Contractor runs out of money. The SOR and Cost Estimate submitted by the 203K Consultant will help keep both extremes from happening.

 

Q- Can I put an addition on a home in NH or Maine using the FHA 203K?

A- Yes! So long as the property in question meets  HUD’s MPR (Minimum Property Requirements), it fits within your budget, and all other health and safety issues are fixed first that may have been found during the Consultants initial inspection.

Q- Can I repair or add a swimming pool using a 203K loan?

A- Yes you can repair an existing in ground style pool. There is no limit to the renovation costs for this given that the costs are warranted. You can NOT repair an above ground style pool as it is not considered a permanent structure. You will NOT be able to install a new pool, above ground or in ground, as it is considered a luxury item and luxury items are not permitted in the 203K renovations.  However a Fannie Mae”Homestyle” renovation loan will allow for this if you are interested in that.

Q- Can I purchase and renovate a fire damaged house?

A- Yes, so long as there is no fire damage done to the foundation of the home and the property to be purchased meets all other HUD guidelines then you can build an entire new home on top of the old foundation. You can even add to that foundation to update the footprint of the home to fit your needs. Sooooo many options so long as you have the budget for it!