Home Inspection: a Reality Check from a Pro
many people, a home inspection is a hurdle that has to be overcome during the
process of buying or selling a home. But, in fact, it can be a useful tool for
buyers, sellers or anyone who plans to get the greatest possible value from
Find out if the house you are selling has “issues”
When you’re selling a house, a pre-sale inspection can be particularly
useful. By uncovering any potential problems your house may have, an
inspection can give you an opportunity to address them before your first
prospective buyer arrives.
According to Bill Richardson, president of the American Society of Home
Inspectors (ASHI), “More and more, sellers are obtaining pre-sale inspections.
This simple step can allow for better planning and lower expenses in making
repairs, add value to the home, and help speed up the process and likelihood
of an offer.”
In any market, a pre-sale inspection can give your home a competitive edge.
Potential buyers are likely to find the kind of detailed information an
inspection provides reassuring—and are encouraged to give your home a closer
Get to know a house before you buy it
A home is a major investment and, for many people, the greatest financial
asset they have. With so much at stake, it makes sense to do what you can to
protect your financial interest. Getting an inspection is a smart, simple way
to do just that.
When you make a written offer on a home, insist that the offer provide that
your contract is contingent on a home inspection conducted by a qualified
inspector. You’ll have to pay for the inspection yourself, but an investment
of a few hundred dollars could save you thousands of dollars and years of
headaches. If you’re satisfied with the results of the inspection and are
assured that the home you’re purchasing is in good shape, you can proceed with
your transaction, confident that you are making a smart purchase.
When does a home inspection make sense?
In addition to routine maintenance and pre-sale inspections, there are a
number of circumstances in which a home inspection could greatly benefit a
homeowner. If you are not sure, here are a few simple questions to ask
· Was your home inspected when you bought it? If not, an inspection
would be beneficial even if your home was a new construction at sale.
· Are you an older homeowner who plans to stay in your home? If
so, it makes sense to hire a professional who can inspect difficult-to-reach
areas and point out maintenance of safety issues.
· Do you have a baby on the way or small children? An inspection
can alert you to any potential safety issues that could possibly affect a
growing family, such as mold, lead or structural problems. If mold or lead is
present, be sure to rely on technicians or labs with specialized training in
dealing with these conditions.
· Are you buying a home that’s under construction? You may want to
hire an inspector early on and schedule phased inspections to protect your
interest and ensure that the quality of construction meets your expectations.
What doesn’t your home inspection cover?
For a variety of reasons, some homes will require specialty inspections
that are not covered by a typical home inspection. A specialty inspection
might include such items as your home’s sewer scope, septic system,
geotechnical conditions (for homes perched on steep sloes or where there are
concerns regarding soil stability) or underground oil storage tank. If you
have any questions about whether or not your home needs a specialty
inspection, talk to your real estate agent.
Hire a professional
If you decide to hire a home inspector, be sure they’re licensed in your
state. They should be able to provide you with their license number, which you
can use to verify their status with the appropriate government agency. It’s
also helpful to ask for recommendations from friends and family members. Even
among licensed and qualified home inspectors, there can be a difference in
knowledge, performance and communication skills, so learn what you can before
your hire a home inspector to ensure that you get the detailed inspection that
What to ask your home inspector
Ask the right questions to make sure you are hiring the right professional
for the job.
What does your inspection cover?
Insist that you get this information in writing. Then make sure that it’s
in compliance with state requirements and includes the items you want
How long have you been in the business?
Ask for referrals, especially with newer inspectors.
Are you experienced in residential inspections?
Residential inspection in a unique discipline with specific challenges, so
it’s important to make sure the inspector is experienced in this area.
Do you make repairs or make improvements based on inspection?
Some states and/or professional associations allow the inspector to perform
repair work on problems uncovered in an inspection. If you’re considering
engaging your inspector to do repairs, be sure to get referrals.
How long will the inspection take?
A typical single-family dwelling takes two to three hours.
How much will it cost?
Costs can vary depending upon a variety of things, such as the square
footage, age, and foundation of the house.
What type of report will you provide and when will I get it?
Ask to see samples to make sure you understand his or her reporting style.
Also make sure the timeline works for you.
Can I be there for the inspection?
This could be a valuable learning opportunity. If your inspector refuses,
this should raise a red flag.
Are you a member of a professional home inspector association? What
other credentials do you hold?
Ask to see their membership ID; it provides some assurance.
Do you keep your skills up to date through continuing education?
An inspector’s interest in continuing education shows a genuine commitment
to performing at the highest level. It’s especially important with older homes
or homes with unique elements.
If you have questions about finding a home inspector, or are looking for an
agent in your area we have professionals that can help you. Contact us
Closing Costs explain in this video....just click on the
Do Multiple Credit Inquiries Hurt FICO Scores?
Los Angeles Times
Fair Isaac Corp.,
developer of the FICO score, reports that it has implemented safeguards to avoid
lowering the scores of people shopping for mortgages. Nevertheless, a large
number of credit inquiries can still lower a FICO
credit score. Larry
Nelson, owner of the
KCB Information Services
credit reporting agency in Illinois, is among those urging mortgage
applicants to avoid all credit-related shopping -- for credit cards, furniture,
home improvements, etc. -- in the weeks leading up to their closing because a
string of inquiries "can knock the home purchase off track or delay it."
Home Buyers Guide.
Buying your new home is a serious venture. It can be an absolute pleasure or a
massive headache. Your house is not just your home, it is a serious investment in the dwelling,
the area and your future.
When buying a home – you’re bound to have many questions. For example, ‘In
what area can I find a home that suits my needs?”, “How much money will I need to afford the monthly
payments?” and “How long will the home buying process take?”
We have put together some information that you might find useful in the home
Below is some general mortgage information along with a summary of several loan types
and definitions of some common terms.
When should you call a
This should be your first step for many reasons:
If you have financing pre-arrange, you are less of a risk to the
seller and can often negotiate a better deal. Many sellers won't accept an offer unless
you are pre-qualified. Even if they do, you will usually be required to provide a Conditional
Loan Approval within 5 days of contract signing. Ideally, you should get pre-approved,
but at a minimum, you should be pre-qualified with a lender you trust before you begin shopping
for a home.
You need to know what type of loan you can qualify for
prior to finding a property. This is because some seller will not accept a contract if the
buyer is going to use a VA or FHA loan. Other sellers will accept the contract but won't
negotiate as much on price. This is because VA and FHA loans can require the seller to pay for
certain items that could otherwise be paid by the buyer. In other words, a VA or FHA buyer
will generally cost the seller more at closing.
Some lenders will not finance certain types of properties at all.
Condominiums , for example, can present several obstacles. First, to use a VA or FHA
approved loan, the complex must be a VA or FHA approved project. Some condominiums are even
difficult to purchase with a conventional loan. Lender determine approval based on may factors
such as the percentage of renters vs. owners in the complex. Also, if one individual owns over
a certain percentage of the units in the complex, some lenders will not fund a loan for properties
in that complex at all.
Some lenders will not finance manufactured homes at all.
Most lenders today will not finance manufactured homes in parks on rented lots. Some will
only loan on a manufactured home set as 'real property' when it is on it own land. Lending on
manufactured homes that were made prior to 1979 or are not HUD approved homes are almost impossible
to obtain traditional financing and most must be purchased with cash.
You don't want to look at houses you can't afford. Not
only is this a waste of your time, but it's extremely difficult to find a 'Chevrolet' that you like
after you have been test driving 'Cadillacs'. In other words, if you can only qualify for $160,000
loan and you've already been looking at $250,000 houses, those $150,000 house suddenly don't look so
great in comparison.
How Much House Can You Afford?
Determining how much home you can afford, or what payment you feel comfortable with, can be a trying
process. Calling lenders, looking at mortgage loan programs and interest rates can be confusing, to
say the least. There is an easy way to get started, and give yourself an idea of where you stand.
The first step is to find out what mortgage interest rates are at the current time. You can
typically do this with a couple of phone calls to lenders or some quick searching on the internet.
Get your rates on conventional fixed rate loans.
To obtain a very clear picture of how much home you can actually qualify for, the best idea is to
contact a reputable local lender and let them analyze your entire situation. The lender can
calculate your income-to-debt ratio, do a quick credit score and give you the information you need.
Typically, lenders like to see a ratio not exceeding about 28%. This does not take into
consideration long term monthly debt. As an example, to qualify for a loan, lenders may require
ratios of 28% or 36%. This means you can spend up to 28% of your gross monthly income on a mortgage
payment, and no more than 36% of your gross monthly income on all forms of debt, mortgage included.
Closing Costs Explained
Here is an overview of the types of closing costs you may incur on your loan. Some are one-time
fees, while others reoccur over the life of the loan. When you apply for your loan, you will receive
a Good Faith Estimate of Settlement Charges, and a booklet that will explain these costs in detail.
Loan Origination Fee:
This fee covers the lender's administrative costs in processing the loan. It is a one-time fee,
often expressed as a percentage of the loan. The origination fee is typically 1% of the loan, but
remember, you can obtain a loan with no origination fee and a slightly higher interest rate.
Often called "points", a loan discount is a one-time charge used to adjust the yield on the loan to
what market conditions demand. One point is equal to 1% of the loan amount. This fee is rare when
interest rates are low.
This is a one-time fee that pays for an appraisal, which is a statement of property value viewed by
the lender. The appraisal is made by an independent fee appraiser and can cost a standard $400 to
$550, or much more, depending on the home's size and location.
Credit Report Fee:
This one-time fee covers the cost of the credit report that is run by an independent credit
Title Insurance Fee:
There are two title policies: a lender's title policy (which protects the lender against loss due to
defects on title) and a buyer's title policy (which protects you). These are both one-time charges.
Miscellaneous Title Charges:
The title company may charge fees for a title search, title examination, document preparation,
notary fees, recording fees, and a settlement or closing fee. These are all one-time charges.
Document Prep Fee:
There may be a separate, one-time fee that covers preparation of the final legal papers, including
the note and deed of trust.
Other lender fees include an underwriting fee, a flood certification fee, an amortization schedule
fee, and other miscellaneous fees that should be disclosed by your mortgage lender at loan
application. These fees vary.
Depending on the time of month your loan closes, this charge may vary from a full month's interest
to just a few days' interest. If your loan closes at the beginning of the month, you will probably
have to pay the maximum.
PMI (Private Mortgage Insurance) Premium:
Depending on the amount of your down payment, you may have to pay an up-front fee for mortgage
insurance (which protects the lender against loss due to foreclosure). You may also be required to
put a certain amount into a special reserve account (an impound account) held by the lender for PMI.
Beginning of the Escrow Account:
Your lender will typically have an account w here your property taxes and property insurance will be
held. This account will be started with taxes approximately equal to two months in excess of the
number of months that have elapsed this year. (If 6 months have passed, they will collect 8 months
of taxes.) Your property insurance will be collected one year in advance, plus two months will be
kept in your escrow account.
Earnest Money Deposit:
It is important to have an understanding of the earnest money deposit, so you will not be placed in
an uncomfortable position when you purchase a property. At the time a written offer is initiated,
you will be required by the seller to include a personal check, cashier's check, or cash. The amount
is normally deposited (cashed) into the designated Broker company's trust account upon the offer's
acceptance, and will remain in escrow until the time of closing. This amount is credited to you as a
partial down payment and represents your intent to purchase the property. If the offer is not
accepted, this amount is returned to you promptly. Depending on the price of the property, you
should anticipate a minimum of a $1,000 earnest money deposit. Also, in the event that you do not
qualify with a lender for a new loan, the earnest money is refunded to you, provided the sellers are
given written notice regarding the lender's disapproval, and provided you have supplied the lender
with all documentation they have requested.
When you purchase your home, both you and the lender need a preliminary title commitment that will
indicate exactly what recorded liens, encumbrances and recorded easements are currently in effect on
the property. The title commitment will also indicate the vested owner of record and any
restrictions on the use of the property. Title insurance is, for all practical purposes, required on
all property in most states and is normally a seller's expense. However, the buyer is required to
furnish the lender with a lender's policy showing the lender as lien holder on that property. These
charges will be incurred at the time of settlement as a part of your closing costs. When the
purchase of the property is closed, and the title company has recorded the necessary documents, the
title company will then issue a title insurance policy binder to you and the lender, showing clear
title to the property.
For the closing, you must bring a driver's license and a cashier's check for the remainder of your
down payment, made out to the title company. At the closing, you may sign the cashier's check over
to the title company. If the closing does not occur, you can deposit the cashier's check back into
your own account. There's certainly a lot to know! Have additional
Give us a call or text us at: 208 661 9238
Tips For Home Buyers
1. We can not
emphasize this point enough....Be a Pre-Approved Buyer! A pre-approved buyer always has
the advantage in an offer situation. Becoming pre-approved is very easy. You start by
completing a loan application with your lender before you begin you home search process.
Pre-approval means that you have actually been approved for the purchase by a lender. This
gives you a greater edge in home purchase negotiating.
2. The search
process can be fun. It can also be very trying at times. You will notice that some
homes sell very fast and others sit on the market for quite some time. Homes that are price
well with the current market sell faster that ones that are overpriced. Working with a
professional full time Real Estate agent that knows the market and keeps updated on the best new
listings will give you the edge over other buyer competition for the best new listings.
3. Become an expert on 'Home Values'. Your agent is a great
asset here. Investigate the areas and price ranges for the kind of home you are looking for.
You need to know and understand the price ranges homes sell for and also how many days they average on the
4. Writing the offer. The purchase of a home is often your
single largest investment. It is important that you make sure that you get the best possible
deal. Overpaying will make it harder to get your value back when it is time to sell.
When you find the perfect home your emotions will run high making it often difficult to be cool and
calculated with your decisions. Your agent plays a large roll here by assisting you in
determining the correct offer price.
5. Structuring the offer. Keep your offer clean and simple.
Avoid unnecessary contingencies, especially requests for repairs or included items not part of the
listing data. Needed repairs will be addressed after the home inspection. Personal items
can be negotiated outside of the offer. The cleaner the offer, the more interested the seller
will become. A clean offer will help you purchase the property at the best possible price.
6. Presenting your offer. What you need most in today's
complex real estate market is an experienced full time professional agent who represents you and
your interests only. An agent well trained and experienced in negotiations is what you want in
your corner at this time. Your agent will present your offer detailing the strengths
you have as a buyer and why the offer is structured as it is. No matter how heated the
competition or the the negotiations, a professional agent will keep you from paying too much.
7. What does an agent cost? You, as the home buyer, pay
nothing for a professional agent. The agent's fee is paid by the seller. If you are
looking for an full time, full service experienced professional agent team to represent you and your
best interests we would be pleased to assist you in your home search. Call or text us at 208.
661 .9238. Find out how we can help you find the most home for the best possible price.
questions should I ask my lender?
It is important that you ask your Loan Officer to explain anything and everything that you
do not completely understand. You will hear many terms...VA, FHA, conventional,
points, fixed rate, adjustable rates, balloon, etc. All of these can be confusing and you
might be hesitant to ask questions because you do not want to appear unfamiliar with all the lending
language. Don't be afraid to ask all the questions you need to clear up any confusion you
might have. Buying a house is a huge, long-term investment. So remember how the old 'cliche'
goes.. there are no dumb or stupid questions...the only dumb or stupid question is the one that is
not asked. As a matter of fact, you should ask questions even if you DO know the answer.
This is a good way to find out if you Loan Officer knows what they are talking about and if they are
being straight with you. After all, it is your hard-earned money. Three very important
questions you really should ask are:
1. Is the loan a fixed-rate or adjustable
2. Is there a pre-payment penalty
3. What is the annual Percentage Rate (APR) of my loan. This is
not normally the same as the 'Interest Rate' you were quoted.
You ideally want to find the lowest interest rate with the lowest possible closing fees.
The APR is the best way to compare loan programs because it reflects both the interest rate and
other fees as one combined figure. I reflects the 'actual cost' of your loan. Some
lenders will quote a low interest rate then tack on higher fees that will make your final loan more
expensive than a program with a higher interest rate. The lower the APR, the lower the
total loan cost is to you.
Lenders are required to provide you with a 'Good Faith Estimate of Closing Costs' Although
this document is only an estimate, it shows you, in writing, the costs and fees you can expect to
pay at closing. It may also include title company fees. If it does not your Real Estate
Agent should be able to help you estimate those costs.
Your Real Estate Agent should also be able to provide you with information on different loan
types and some other terms you should know. Obtaining a copy of this information from your
Agent will assist you in more fully understand the entire loan process.