Home Inspectors: Friend or Foe?

Home Inspectors

Friend or foe…?

This is going to be more of a rant than an informative piece. Be warned.

Why do Realtors sometimes hate Home Inspectors? Why are sellers and buyers afraid of home inspection day? It’s easy. A home inspection can be like a wrecking ball aimed at the dreams of home buyers and a cutpurse to the seller and realtor’s wallets, especially if the home inspector conducting it lacks the tact and people skills required to do it the “right” way.

What do I mean “right” way? It’s easy. An Inspector that spits acid as he/she goes through a house isn’t helping anyone. An Inspector that has a “know it all” personality and is never wrong can be very difficult to communicate with, and communication is the number one most important part of a home inspection. A Home Inspector can know every tiny detail about a house, how it should be constructed and be great at finding every tiny issue in a home, but if the Inspector can’t pass on that information smoothly to everyone then the inspection was pointless. What is the point of a home inspection you ask? To LEARN about the home.

Is a Home Inspectors purpose to just flag a bunch of items that are WRONG with a home? The answer is most definitely no, however many of us in the home inspection business have lost our way and have simply become DEFECT police. Calling out a defect here, and another one over there, is the easy part of a home inspection. By calling out a bunch of defects in a home we can walk away feeling like we did a great job….. right??? Wrong. Our job is so much more than that.

If all Home Inspectors learned to change their mind set about what their job is then it would become a smooth and informative process every time. It’s simple. A Home Inspectors job is to communicate AS MUCH information pertaining to the property in question AS POSSIBLE.  Not just defects. Inspectors need to communicate things like: How old the boiler is, what type of heating system is in the home, how does it work, what kind of siding is on the home, what kind of maintenance does it need, where is the main water shutoff, how do I turn the light on in the basement etc. There is soooo much more to it than just saying “this is wrong and that is wrong and those are broken”.

The home inspection process should be more like going to school for a few hours to learn as much as possible about the home you’re having inspected. Yes, buyers can use the information they learn about the home to negotiate the sale price. Yes, buyers can turn around and run away because the home is not what they were expecting. Yes, sellers may get annoyed about the things that came up at the inspection. Maybe the seller should have had their home inspected first before putting it up for sale. Isn’t that a great idea?! After the inspection there should not be any fear or aggravation because knowledge is power, and if your inspector did his/her job correctly then you should be leaving feeling confident about what your next steps will be. See, isn’t that SIMPLE.

The reason I became a home inspector is because I believe that every home transaction should be an HONEST and fully DISCLOSED transaction. We help the world in this way, by passing knowledge and integrity from out home to yours.

Thanks for listening!

Will Dinsmore signing off

FHA 203K Renovation Loan Program Q and A

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!

Top 3 Reasons Why You Need a Home Inspection When Buying a Home

Learn the “True Value” of the Home.

The value of a home on the market is always a BIG question. Many parts make up listing the value of a home such as the home’s location, size, market comparisons, luxury items, and of course deficiencies. What do we mean by deficiencies? Basically, any negatively impacting issue with the home.  A new roof, rotted siding, or a malfunctioning water heater are deficiencies. These defects and other valuable information are found during a home inspection. What you as the buyer gets to decide (unless you waived your right to a home inspection #badidea) is whether that listed value of the home is still right for you after the inspection. This is your True Value. The value of the home as you see it.

Here is an example: A home is listed for $200,000. You put in your offer and a few days later you have your home inspection done. You learn that the seller did not disclose that the home needed a new roof and the boiler was installed in 1952. They didn’t disclose this information because they didn’t know it needed a new roof and didn’t realize the boiler was a dinosaur and should be updated. You now get to decide whether that asking price is right for you, or maybe you want to ask for a reduction! (Here is where having a great real estate agent comes in to play also!). Buying a home is most likely the largest purchase you will make in your life. Make sure you have the right people on your side!

Gain the ear of a Qualified Inspector.

During and after the home inspection, you get the opportunity to ask the inspector as many questions as you can about the home. A great inspector will want you to walk around the property with them as they conduct the inspection. This your chance to talk his or her ear off and pick their brain about questions like, Can I rip down that wall to join these rooms?, what kind of maintenance should be done on that oil burning boiler?, or why is there green stuff growing on the roof? Most home inspectors have a background in the building trades, and some of the great ones will even give you some rough ideas on the cost of upgrades and repairs, but you need to ask! Just like the saying goes, the only dumb question is the one that you didn’t ask. Take advantage of the ear of the inspector while you can. You also need to do your homework before you hire an inspector. You need to have the confidence in the person that is giving you these answers, or there may be a chance you are getting the wrong answers. Not all inspectors are the same.

 

Feel confident in your investment.

Your home purchase is not only the largest purchase you will make in your lifetime but also the largest INVESTMENT. Buying an overpriced home that has tons of deficiencies is a nightmare that will keep you up for years to come. Buying a home can already be stressful and expensive so watching someone buying a home without getting a home inspection is like watching someone stick their hand in an alligator’s open mouth. You are just waiting for the worst to happen. Instead, put your mind at ease. Have an inspector on your side when making the purchase of a lifetime. Learn as much as possible about the home before you sign. Hire a great real estate agent as well as a great home inspector and you will feel a lot more confident and at ease throughout the whole process. Knowledge is power, and power builds confidence.  Feel confident about the future of your home purchase!

Will Dinsmore, Licensed Inspector and Owner of NH Home Inspector LLC