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In yesterday’s InfoTube blog post, we discussed surprises that can arise from a problematic inspection report and ways to negotiate with the buyer to keep the deal alive.   Today, we look at pre-home inspections from an offensive position, in hopes seller’s can avoid a “repair request” crisis, after the home is finally under contract.  

Reasons to have a Home Inspection before the Sale.

1. 1.  Pre-Inspections are a Great Selling Point.   Providing a Pre-inspection report puts the buyer at ease and gives them confidence that the seller has nothing to hide about the home or its condition.  By being upfront, sellers put the Buyer at ease so they can better vizualize themselves living in the home, versus searching for problems at every turn.  
2. Pre-Inspections Give the Seller a Head’s Up.   A home inspection gives sellers the opportunity to fix any necessary repairs and put the house in better condition before the sale.   By pre-inspecting, the seller can also address unknown problems with the property that might have resulted in a canceled sale, if a timid or scared buyer discovered them first. 
3. An Good Offense Beats a Good Defense.   When the buyer sends in their inspection team, they may be looking to save money.   Often, a bargain shopper will use the inspection report to get a better deal on the house by inflating the costs of repairs or threatening to cancel the contract, if they don’t get their way.   By providing a licensed inspection report upfront, sellers deter ‘would be’ re-negotiator’s and increase the chances of a smooth transaction.
4. Show and Tell.   Ask your home inspector for several copies of your inspection report.   Hand the reports out to prospective buyer’s, when they tour the home.   The report reflects pride of ownership and handing the report to the buyer keeps your home in the buyer’s mind for a much longer period of time.   (The inspector shouldn’t mind the request because it is good for the inspector, too.  His name and contact number on is on the report.  Even if the buyer doesn’t buy your house, they might call him for their own inspection.)
5. Beat the Competition.   Buyer’s have heard horror stories about victims who have purchased a money pit and found themselves living in a nightmare of endless bills, contractor’s and life interupting problems.  Set your home apart from the foreclosures, short sales and poorly maintained homes on the market and reassure the buyer that your home is a hassel-free home they can be proud to call their own.

In conclusion, while it’s sometimes tempting to cut corners to save money, a home inspection is a worthwhile investment.  A pre-inspection lessens the chance of buyer’s remorse, reduces the chance of a surprise or scare, and frequently keeps a deal from falling apart altogether.   In today’s buyer’s market, the best defense is a great offense. 

Thank you for visiting InfoTube.net homes for sale or rent website.  Seller’s can place Free Property Listings and Buyer’s can Search for great deals on Real Estate.   If you are a seller, ask us about an MLS listing with uploads to Realtor.com, Zillow, Trulia, Yahoo, MSN, Google and More for $399.

You thought your home was in good condition, but surprise… the home inspector says otherwise.   You have already reduced the house to a rock bottom price to get a sale.  This is the first offer you’ve had in months or ever.   What can you do to save the deal or should you???

Stay Calm.  Don’t Freak Out.

In slow markets, seller’s have every reason to panic when they learn about inspection problems.  First, they have no idea how the buyer will react to the report.  If the report is really bad, they know it is likely that the buyer will back out of the deal.   In the best case scenario, they know that more rounds of negotiations and repair requests lists are back in play.   Uncertainity, helplessness and frustration make it easy to freak out, but it is crucial that seller’s stay focused and remain calm.

The first thing the seller must do when they hear about a problem is to keep quiet.  They should resist the natural urge to curse the inspector and they should say absolutely nothing, until the buyer presents a request for repairs.   Some buyer’s aren’t surprised at all that a home might need some repairs.  Also, they may not view the repairs as negatively as the seller does.  Best advise is to not borrow trouble.  Wait for the report, before jumping to conclusions.

Keep Your Head.  Negotiate.

The good news is that if you receive a repair request list, the buyer didn’t walk and they are still interested in the purchase.   Plan to review and discuss the list with an open mind.  Chat with your Realtor, if you are using one.  Talk the situation over with a repair professional.  Get bids on big ticket items, before you go back to the buyer, or you agree/disagree to anything on the list.

Many times, seller’s find that they can get repairs done for less than they think.  Or, sometimes, the seller can make the repair themselves.   If cash flow is a problem, many contractors will agree to wait until the closing to be paid.  The goal is to create a win-win atmosphere and don’t hate the messenger, no matter how bad the news is initially.

Reassure the Buyer.  Stay Focused on Closing the Deal.

Reassure the buyer that you want to fix any major issues with the house.  Get multiple bids from legitimate contractor’s for major repairs.  Multiple bids are powerful because many times the buyer (especially the first time buyer) is scared about the costs of future problems, so they increase the numbers a bit.    Sometimes, after the see that the repair isn’t urgent or may not be as expensive as they thought, the buyer will relax a bit, setting the stage for better negotiations.

Remember that everything about repair requests is negotiable and the options are endless.   The seller can fix all the items on the list, they can agree to fix any real problems and ignore cosmetic issues, they can offer the buyer a cash credit at closing, reduce the sales price, or do absolutely nothing at all, depending on the value of the contract and what they can afford to do.  

In Conclusion.

If you receive a bad home inspection, please remain calm and cool headed.  Focus on a win-win compromise with the buyer.  And, gather all the facts and figures before commenting, if you want to keep the deal alive.  In the long run, honest communication is always key and addressing the problems eliminates the likelihood of lawsuits later.  

Thank you for visiting InfoTube.net.   The website where Seller’s can place a Free for Sale or Rent Property Listing and post their property on the MLS and Realtor.com.  And, buyer’s can search for thousands of great properties with ease and privacy.  

Dear InfoTube,

We are under contract to purchase a brand new home that is ideal for our family.   Unfortunately, the home inspection revealed that the brand, new roof was improperly installed.  It seems that the builder did not use felt, drip edge or flashing before he installed the shingles.  The shingles were nailed directly to the plywood decking.  The inspector also noted that many of the nails were set too deeply, which caused depressions into the asphalt material and would likely cause roof leaks.

After discussing our findings with the builder, he admitted that he knew about the missing roof materials, but he refused to replace the new roof due to the cost.  The builder insists that the missing materials are unessential and pose no problem for us.  He also gave us his personal guarantee that he would fix any problems that might come up in the future, if we would go ahead with the purchase.

We are now faced with a huge dilemma.  First of all, we love the location, floorplan and lot.   The house is just perfect for our needs.  Secondly, we have invested nearly $1500 for the inspection, appraisal, loan application fee, etc., which we would lose if we back out of the sale.    We would really appreciate your input about this situation.  We love the house, but the roof problem scares us, even with the builder’s promises.  We are scheduled to close and move in a couple of weeks.  Please give us your opinion about what we should do.

Thank you, T Thornton, NC

Dear T Thornton,

Let me reassure you that drip edge, felt and flashing are essential parts of a roof system and improper installation voids any manufacturer’s warranty.  Furthermore, it is very unlikely that your lender would give you a loan for this property, once they discovered the problem.   

Secondly, I found myself asking“What kind of seller would “cheat” on a new roof and what else is he hiding?”  A new roof is a strange thing for a builder to cheat on.  The roof is a basic structural system of a home.  In addition, it is huge and highly visable to the eye.   It is very concerning, to say the least, that the seller knew about this problem and lied to cover it up.   One has to wonder what else has he cheated on and lied about, that might not be as easy to see as the short cuts he took on the roof?

This situation poses a serious problem for you, the lender and the seller on many levels.   First, the builder’s non-disclosure of the known problem with the roof could likely be considered fraud.  Secondly, his guarantee to fix future problems is unenforcable in a court of law.  Contracts for the “promise” of future services, which is what this seller offered you, is illegal in all 50 states.  Think about it.   If this seller becomes disabled, leaves the area, goes broke, dies, etc., how could he possibly honor his promise to you, even if he wanted to?

My honest opinion is that you should RUN, not walk, from this deal.  Instead of being disappointed, you should be very thankful that you had a good home inspection that revealed the truth before you closed.   The good news is that the inventory of unsold homes are at historical high levels.  This means you should find plenty of homes, owned by honest sellers, that suit your families needs.   Given the seller’s blatant dishonesty, you should insist that the builder refund your earnest money, buy your appraisal and reimburse you for the inspection report.   If he hesitates or refuses to do so, you should consult an attorney, immediately. 

If you have your heart set on buying this home, you should know that you are taking a big chance.  At the very least, you should at insist that the builder install a new roof.  You are paying a premium to buy a new home, so you should receive a new roof, not one with known problems.  You should also insist that the builder transfer all manufacturer’s warranties for the roof, and all other systems in the house, to you at closing.

Thank you for writing to InfoTube.net.   I hope everything works out for you, but I seriously hope you walk away from this one.   Everything about this home may appear pretty on the outside, but one would be foolish to not fear what kind of ugliness may be lurking beneath the surface.

It is very important that everyone understands that carbon monoxide is a deadly, silent killer. 

So, what is it?  Where does it come from?  How can you protect yourself and your family?

What is carbon monoxide?  Carbon monoxide is a colorless, odorless and tasteless gas.  The gas is created when fuels containing carbon are burned.  The most common fuels containing carbon are coal, wood, oil and gas.  Carbon monoxide is poisonous and extremely harmful to all humans and animals.

Where is Carbon Monoxide Found?  It can be found wherever fuel is burned.  Sources of carbon fuels are wood, coal, charcoal, oil, propane, natural gas, fuel oil and kerosene.  Most applicances, fireplaces and machines burn carbon fuels, as do lawn mowers, grills, bbq’s, generator’s, heaters and cars.

How can I Protect Myself?  Carbon monoxide is not usually harmful or deadly, if an area is properly vented.  Carbon monoxide detectors are inexpensive and can be easily installed in area’s of the home prone to leaks or problems.

What are the Signs of a Problem?  People complain of nausea, headaches and extreme fatigue.  Often, people think they have a flu or bug and do not seek medical treatment until it is too late.    If unexplainable symptom’s present themselves, immediately get outdoors into fresh air.  If you find yourself feeling better, call a professional inspector and stay out of the house.

Wintertime = High Alert.  Carbon monoxide poisoning is responsible for numerous deaths and severe illnesses each year.  Obviously, winter is a time of heightened risk, as heating systems and fireplaces are in use, and windows and doors are closed. 

Thank you for visiting InfoTube.net homes for sale website.   Please feel free to post a free property for sale or lease listing, or search our site for great deals on real estate.

Buying a home can be exciting and a little scary at the same time.  Fortunately, you can save yourself a lot of money and trouble by focusing on the 5 Area’s of a home that cause the most reported problems.

5 Trouble Spots You Should Pay Close Attention To

1. Attic:  It is amazing what you can learn about the structure of a home by looking in the attic.  You can easily see the framing, the condition of the roof and decking, and the insulation or lack of it.  The attic is also a great place to find evidence of leaks, past or present, and any mold issues that may have resulted.  Tip:  If you see new insulation in some area’s, it usually means there has been a leak there at one time.
2. Electrical:  The electical system is a commonly reported problem in older homes and new construction.  The best and safest advise here is to rely on the expertise of a good home inspector.
3. Foundation:  Foundation failures are expensive problems to fix.  In addition, they can cause other problems that may be hard to detect.  Although cracks do not always indicate a big problem, you should key in on any cracks in the foundation or siding.   Watch for root invasion from tree’s that are planted to closely to the house.  Also, check to be sure that all the doors and windows open and close properly.  If not, it may indicate that the foundation is or has shifted.  A professional home inspector will be very helpful in determining issues with the foundation.
4. Landscape:  Landscape can be a huge selling feature for any home and it can be an indicator of  potential problems.  If landscaping has been planted closer than 12 inches from the foundation, it is too close to the house.   When plantings are too close, they can cause moisture problems and cracks in the foundation.  Vines which creep up the sides of the house can push siding and brick away from the stucture, weaken mortar and cause staining.  Large tree roots can upheave sidewalks, decking, porches and damage the foundation.  Landscape beds should be elevated and sloped to drain all water away from the house and foundation.
5. Plumbing:   Water leaks are often hard to see and cause of a lot of expensive problems later on.  In addition to undermining wood surfaces and flooring, leaks also result in mold issues that are difficult to treat and expensive to cure.   Tip:  Always look closely underneath sinks and plumbing fixtures to find evidence of mold or past water damage.  Tip:  Don’t forget to move the refrigerator out and look behind it.

The best advise when buying a home is don’t scrimp on your inspector.  Hire a licensed, professional home inspector and follow them around throughout the entire inspection.  The more you know about the condition of the property, the better off you will be.  Remember that common sense, due diligence and a good inspector are invaluable and can help you avoid most of the costly mistakes.

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The buyer’s home inspection is one of the many steps involved in selling a home, that by its nature, pits buyer against seller.   No seller wants to be faced with a lengthy, and often, expensive list of repairs.  No buyer wants to purchase a potential money pit.  

Sellers should be prepared for the news that in a buyer’s market, buyers clearly ask for more repairs than they would have ask for a couple of years ago.   Sellers need to understand that it is critical to separate the emotional or insulting nature of an inspection report from the transaction itself.  And, although objectivity is a difficult task to master, seller’s should always be calm, never angry, when responding to the buyer.

Seller’s need remind themselves that the inspector works for the buyer.  It is the inspector’s job to document a large list of items that may cost the buyer money down the road.   This doesn’t mean the inspector thinks your home is a piece of trash or that you don’t maintain it.  They are simply noting items about your home that may need attention. 

So, what should the seller do after they receive a list of repair requests?   Although state laws regarding inspections and repairs differ slightly, most sellers have three options.

1. You can accept the entire repair request list.
2. You can decline the entire repair request list.
3. You can agree to part of the repair request list.

Each of the three options have a potential effect on the transaction.

If you accept the entire repair list, the deal moves forward and proceeds ultimately to the closing table.  Keep in mind you have to make the requested repairs and the buyer will do a walk thru before closing to make sure the repairs are acceptable.  Don’t try to save a little money by doing the work yourself, if you aren’t confident in the outcome of the job.

If you decline to make any repairs on the list, the buyer can accept the house in “as is” condition.  Or, they can cancel the contract and get their earnest money refunded.

If you agree to fix some, but not all, items on the list, the buyer can cancel the contract and get their earnest money back.  Or, accept the repairs you have agreed to do and proceed to closing.

Note:  As a general rule, repair request negotiations are one-time affairs.  They do not go back and forth with an offer and counter offer.   Repair requests do not involve other terms of the contract such as price, closing date, etc. 

Tomorrow, I will address what items on a repair list are reasonable requests and which should be declined.   If you have an specific issues, please leave a comment in section below.

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