We all know interest rates will go up. It's just a matter of time. For those of you considering a home purchase in 2015, now would be a good time to start a checklist. I have mentioned the importance of choosing the right buyer agent, in another post. The agent can help you with a checklist.
As a Home Inspector, one of the issues I see buyers face consistantly, is dealing with unexpected expenses that the home inspection brings to light. It's true that some loans are designed to wrap needed repairs into the mortgage, such as the 203K, but, most are not.
If , for instance, the heating system needs replacement, it wasn't disclosed, and you don't have an additional five to fifteen thousand dollars to spend, what are your options? Often, purchase agreements include language that gives the seller the option to correct the deficiency. That's great, assuming the hire a reputable contractor. The price, of course could be lowered, but that won't help you come up with the cash for the repair. Realtors can sometimes offer solutions that will work for both parties.
One option I recommend is keeping an eye out for properties that have a Home Inspection report on file. Called a pre-listing inspection, it is sometimes used by sellers to highlight the good condition of their home, or to be more upfront about needed repairs, which then, have been reflected in the price.
As a buyer, this report gives you some advantages. First, It allows you to see a snapshot of the home's condition prior to making an offer. Second, it puts condition issues on the table up front rather than near the closing. This gives you time to get realistic bids from contractors, if needed.
It also benefits the seller who wants to correct any deficiencies prior to listing the home. He/she can negotiate the best rate for repairs rather than be stuck in a time crunch, which contractors can sometimes sense and, may capitalize on. The report is updated once the repairs have been made and can be a great marketing tool.
I do see homes of similar square footage, similar age and design, similar neighborhoods priced about the same, but with big differences in overall condition. The pre-listing Inspection takes this potential obsticle off the table. Look for it during your next home search!