Once you get your inspector, make sure you’re there when the inspection is done. It’s interesting and you’ll want to take notes–a good home inspector will show you where the water shutoff is, for instance, and how to read your fuse box, and all sorts of other valuable information that you’d never think to ask your realtor about. Take notes…there’s a lot to remember, and it can get overwhelming.
I really enjoyed having the home inspection–the person I hired was extremely helpful and informative and looked at a million issues I would never even have thought about. My home was in really good condition, but he still found a couple of small issues that I could use as bargaining chips. I knew a LOT more about owning and keeping up a home when he was done with me!
Congratulations on your venture. 
In my state, at least, inspectors DO NOT WORK FOR AGENTS.
Agents cannot even recommend an inspector. We give a buyer a list of qualified inspectors and say, “Pick one, or find another.”
And if an inspector were found to be directed by an agent in any way, there would be Hell to pay, both ethically and legally. Furthermore, we agents are instructed by our attorneys to NOT accompany an inspector during the inspection (the buyer may, and is encouraged to do so).
Wow, all this underscores the importance of getting a good buyer’s agent upfront, which I suppose comes too late to be considered advice for Richard Parker.
So first here’s the part where we brag about our awesome agent: we just moved in two weeks ago, and we discovered an issue with the air conditioner that didn’t come up during the inspection. Our agent, who has already gotten paid and no longer needs to have anything to do with us if he so chooses,*** is going to pay for the repair himself.*** We have felt all along that he is genuinely watching out for us. Which is good business, because now we would recommend him to anyone without reservation.
Here’s the advice part: after the inspection, your agent will write an addendum to the sales contract, or something like that, and final sale of the home is contingent upon the seller fixing whatever you say you want fixed. Make sure you get the big stuff addressed, but don’t sweat the small stuff or ask the seller to address every item.
Furnace broken? By all means, get the seller to have it professionally repaired. Leaks of any kind? Same thing. Cabinet hinge broken, or cracked weatherstripping around the door? Meh, for $20 and about 30 minutes of your time, you can replace both of those yourself.
And congratulations!
I’m going to disagree with CCYMan here, and recommend that if there’s something you want fixed, you ask for the sale price to be reduced by the amount of money the repair should cost, and then have it fixed yourself after the sale. If you leave it to the seller to fix it, his motivation will to get it done as cheaply and quickly as possible - if it breaks again 13 months later, it’s not his problem. If you have it fixed yourself, you’ll know it’s being done correctly.
You still have to buy something, and if this deal falls through, there’s no guarantee of that.
Absolutely follow the inspector around and ask lots of questions about anything that looks odd to you. You can also search for home inspection checklists and print one out that you like, and take it along with you, just to make sure he hits all the high points, or get additional info about anything you’re particularly interested in.
I agree with muldoonthief about fixing problems yourself. You do take on a bit of risk that the cost to repair will be higher than the negotiated amount, but you can eliminate the risk of a barely passable, but legally binding, repair. Obviously, it depends on the type of repair, so you would make that call after the inspection. I believe you also have the option of getting cash back (or money for closing costs) rather than a reduced sale price, which would help you have enough cash on hand to make the repairs, if you might be caught short.
It’s good to get in the mindset that the offer and acceptance were a little bit of fake negotiation theater, and after the inspection is when the real negotiation starts. Unless the house is perfect, or every fault was completely and thoroughly disclosed, you’re going to have to negotiate about fixing issues. Be ready for serious negotiations and possibly calling off the deal if you don’t get what you want. Don’t be the person who would never have offered $10,000 more for the house, but will swallow having to do $10,000 in repairs they didn’t expect. I’m not saying things will go bad, but it’s good to be mentally prepared, especially since you’re going to be getting excited about this particular house.
Ahem, Gentlemen, y’all are forgetting something important: the language of the contract.
The contract will specify what can be done; how, when, where and what the penalties are for not doing them. If the contract says the seller must cure (fix a problem), then that language governs. If the contract says the seller will not cure, then he won’t. You can’t simply say, “fix this” and expect it to be done without the appropriate wording.
Also important: Any provision of the contract can be modified by written, mutual agreement at any time. The key phrase here is mutual. Never enter into a contract assuming that the other party is willing to change anything or negotiate once all signatures have been obtained.
But until an inspection occurs, is there any language about fixing problems? That strikes me as awful specific and fraught with issues depending on what the problem actually is. My P&S contracts both stated that I could get back my deposit and walk away from the deal within some window (48 hours ?) after the inspection. Nothing about giving them time to fix the problem, or anything else.
I was able to use that as a negotiating point for the thing I wanted them to give me money for so I could have it fixed myself after the sale. We then mutually wrote that into the contract. If the seller had stood firm on not giving me a discount due to the problem (windows needed replacing), I would have walked away from the deal, as the contract said I could.
Upon discovery of any material defect, the contract gives the buyer the option of (a) walking away or (b) requiring the seller to repair the defect to the buyer’s satisfaction within 10 days. Obviously, option (a) also includes the ability to negotiate any other kind of agreement we want, including lowering the price.
A new question:
Homeowner’s insurance. What are the key points here? Any coverages that are non-standard but useful? Should we use a broker or no? Are there any good websites for this kind of thing? Etc.
All the advice so far is greatly appreciated!
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Guaranteed Replacement Cost (I think that’s the term) - basically if your house is wiped out and the insured value is X - but for whatever reason it costs x+10% to rebuild. That’s an added-cost rider.
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Riders for any unusually valuable items, e.g. jewelry (typically there’s a limit to how much is covered under the normal property limit). Usually you’d need to provide an appraisal for such items.
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Umbrella policies which provide much greater liability coverage, e.g. up to 1/2/3 million dollars. A typical policy has something like 300,000 liability. We don’t have one, but possibly should - if one of us gets sued for something big (not that we PLAN to, mind you…)
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Flood and/or earthquake coverage. There are quite a lot of folks on the East Cost who wish they’d had such coverage - if you’re in a low-risk area, you don’t think of it.
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Sewage / stormwater riders to cover possessions in case of a sewage backup. We have that; it’s not terribly costly.
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Discounts if you have auto or other policies through the provider; also look to see if you can get any kind of discount through work (we save a little because of a discount for employees of my rather large company).
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“Code” coverage - say the housing rules have changed since the place was built, and the house was grandfathered in but has been damaged, so the repairs have to be made up to current code - which is more expensive than the older construction.
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Replacement vs. market-value coverage for your possessions. That 2 year old TV might be worth 200 bucks secondhand but would cost 800 to replace with a similar new model.
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Coverage for any upgrades you make to the house - e.g. I notified our carrier when we replaced old carpet with hardwood (which is more expensive to replace).
I’m sure I’ll think of more - I actually need to review our policy, as the cost jumped up quite a LOT this year (ouch!).
A property written sales contract should specify what is to be done, how it is to be done, when, what happens if it isn’t done, and the time allowed for each step.
What is to be done may be covered only as “right to cure.”
How may be “in a good and workmanlike manner.”
What happens if it isn’t done, or if proper notice isn’t given in a timely fashion may say “this offer shall be null and void if …seller does not timely deliver the written notice of election to cure.”
The time allocated for each step may be “within 10 days of delivery of Notice of Defects…”
This is boilerplate from lines 413 to 435 of the Wisconsin Offer To Purchase, WB-11. Other states may be different, and contracts may be tailored much more closely to the task at hand. Consult your agent or an attorney.
If any of these steps are omitted, it just opens the door to misinterpretation, and could potentially make the contract non-binding. For example, if the time frame is not given, how do you know when the contract has been breached?
I’ll dig out the P&S’s I signed and see if they contained such language. I do remember some brinksmanship with our first house where we just wanted them to drop the price $1k and replace the windows ourselves, rather than have them fix them. Since the house had been on the market for several months, they agreed at the last minute.
Your link is to an article about Netflix BTW.
Sorry, and thanks. Here’s the Wisconsin WB-11 form (PDF)
Agreed! I forgot that’s the other option. Fix it, or give us money to fix it.
I’m watching this thread with interest since I’ve just (as of yesterday) become a seller. There were two showing requests the same day it listed, three today and (so far) three tomorrow. so I’m taking that as a good sign that there is interest in properties in my area.
Regarding Zillow, I’m wondering how they know what my home is valued at. I suppose the land records and nearby recent sales are all public record, but is that it? How does Zillow know if I’ve recently renovated and done upgrades?
Zillow currently has my place at just over $330K, and my agent seems to think it’s worth around $375 but suggested I price it a bit low at $350 to generate more traffic. I guess he expects a bidding war :dubious:
I can’t necessarily say I would recommend the following (especially since you live in New York, and not Florida), but I’m never buying another house without separate inspections by a qualified electrician and roofing contractor.
Our home inspector (agent-recommended, natch) told us the roof would last 10 years. It lasted 1. He told us the air conditioning outside unit would be good for 10 years, and the air handler for 5. They lasted 1. He told us the exterior walls were properly sealed. They let in about 30 gallons during a tropical storm the first year. He told us the water heater would need to be replaced immediately, and… it’s working fine 5 years on (we did replace the piping).
My guess is that Zillow has some kind of formula that looks at price per square foot for properties sold in the vicinity, that might also factor in number of bedrooms and bathrooms, but I’d be surprised if it were much more complicated than that. I’m nearly certain is does not look at tax valuation or previous sale price of the property.
As for asking price, it’s an interesting psychological game. On the one hand, you want the asking price to be higher than the price you expect to settle at, since you want to anchor the negotiations upward. On the other hand, you want the price to fall within the band of prices your buyers will be looking at.
In my experience so far, realtors are heavily reliant on comparable properties sold in the last 6 months, which is a pretty blunt instrument for pricing since every property is different. So a lot of correct pricing depends on what your comparables look like. If you have a higher than average value for a house of your size and basic features than the ones sold near you in the last six months, then you have a harder time getting the right price. If you’re lucky enough to have a lower than average value, then you’ll get a much better bargain as a seller.
But on average,[sup]*[/sup] he isn’t doing so bad, now, is he?
[sup]*[/sup]If you weight the water heater 5 times.
Well, he didn’t say the house would collapse into a sinkhole, and the house hasn’t collapsed into a sinkhole so that’s gotta be worth something.