3 Reasons Home Inspection Companies Remain a Critical Part of a Real Estate Purchase in 202011/26/2020 If you are a home buyer considering purchasing a residence, you may be asking yourself – is hiring a home inspection company really necessary in this day and age. Times are changing, the whole real estate purchase process is evolving, and with the ease of online sites like Zillow, Redfin, Opendoor, and others, searching for a home for sale has never been easier. I can do so much research myself and know so much about a home before I even step foot into the place. So is a home inspection needed? There are 3 reasons home inspection companies remain a critical part of a real estate transaction in 2020 and beyond. Times are changing, no doubt about it. Every facet of the home purchase process is being optimized as technology advancements push the real estate industry as a whole toward solutions that benefit a more knowledgeable home buyer. So let’s explore the top trends we have noticed in our dealings with home buyers, that have highlighted the importance of a home inspection. 1. Increase in For-Sale-By-Owner and Low-Fee-Listing PropertiesTraditionally, a homeowner would find a local real estate agent to help them list their home for sale. The agent would do research on comparable sales in the neighborhood and area, help the seller establish a listing price, arrange photographers to help present the property in the listing, and then coach the seller on the best ways to prepare the home for showings. With the advancements in online listing platforms, sellers are finding that getting their homes listed for sale is a quicker and easier process than ever. Many sellers are taking the leap to list the home themselves without the help of a real estate agent. According to the National Association of Realtors statistics, FSBOs accounted for over 7% of home sales in 2017, with this percent expected to grow to over 10-12% in 2019. Other sellers may be seeking help from low-fee listing service companies that can get the home listed for a flat-fee or lower commission rate. While there are upsides to these advancements, the downside is the potential loss of a real estate professional helping guide the seller through the process of preparing their home, properly completing disclosures, and knowing what repairs may be needed to help the home sell. The results of these changes can be a home that isn’t as prepared for sale as it could be. The role of the home inspector in representing the buyer grows in importance in cases like this, more so than usual. When a seller does not take advantage of the experience of a local real estate agent in preparing their home for sale, they may not address concerns prior to listing their home for sale. And of course sellers loves their homes, so they may not clearly understand the need to repair or replace certain items prior to listing. The critical eye of a good home inspector can help discover deferred maintenance items, immediate repair concerns, and items to monitor over time. COURTESY OPENDOOR 2. The rise in iBuyer Owned ListingsThe latest trend in today’s real estate market is the rise of the iBuyer option for home sellers. This is where large real estate companies like Zillow, Redfin, Opendoor, or smaller local real estate companies will purchase your home directly instead of selling it. The pain points in selling a home can all be eliminated when a seller chooses to work with an iBuyer to purchase their home. Nobody really enjoys selling a home. Cleaning your homes, putting up with multiple showings, fixing nagging issues you have ignored, the stress of negotiating with a buyer, etc. – nobody looks forward to these items. Along comes the iBuyer, willing to make a cash offer to purchase your home and take away all this headache. Certain home sellers find this option attractive and take advantage of it. The iBuyer company now owns the home and needs to clean and prepare the home for sale. In reality, iBuyer’s are basically the new version of home-flippers. Their goal is to turn around the property and sell it for as much profit as they can with the least amount of investment possible. That isn’t to say that there isn’t real value in what these companies are providing for sellers and the market. But they may be willing to leave in place concerns present in a home, in hopes of selling without the need to repair or replace defects or maintenance concerns. Enter the home inspection company, representing a home buyer’s best interests. Home inspectors have no financial role in a home purchase, allowing them to be completely independent and unbiased in reporting on concerns observed. If you have any doubts as a home buyer looking at a home that has been through the iBuyer process, having a professional home inspector on your team to give you a fair and unbiased review of the home, can give you peace of mind and a solid understanding of the condition of the home. 3. Technology Advancements Available to Home Inspection CompaniesWhile the overall real estate market has experienced advancements, the home inspection industry has itself experienced improvements that benefit inspectors, and ultimately the buyer. Leading the way is the availability of tools and processes that were not something inspectors had years ago. Providing enhanced service offerings to buyers and their real estate agents helps to understand the complete condition of the home being purchased. Infra-red scan tools have improved in features and dropped in pricing, allowing a home inspector to carry an IR camera in their tool bag. IR scanning can reveal moisture concerns, electrical issues, insulation concerns, and leaks that may not be readily visible to the naked eye. Mold testing services that were once only available to industrial-hygienists and special labs, are now services home inspectors can offer, with fast turnaround on results, even next day in many cases. Many home inspectors are adding sewer scope inspection services to their offerings, which allow inspection of the inside of the main sewer line leaving the home, to verify the condition of this buried line. Others are adding Water-Quality-Testing, Pest-Inspections, Asbestos-Testing and other services that are above and beyond the basic home inspection standard of practice. Finally, the quality of the report produced by a home inspector has significantly improved as technology advances have found their way to this niche industry. See one of our sample reports here. Reports accessible via a website link are becoming standard, with high-resolution pictures of areas of concern, detailed write up of concerns with informational links, and the ability to share report concerns with agents and sellers to clearly communicate issues noted during the inspection. Video Player 00:00 00:06 The Times They Are a-ChangingThe only constant in life is change. The real estate industry is in the midst of broad changes that will impact how buyers and sellers interact in the sale process of a home. Overall the changes are positive and helpful, but not without growing pains. As with many changing industries, certain roles or processes get eliminated or minimized as technology advances. In the case of a real estate purchase transaction, many of the changes we are seeing only highlight the importance of a home inspection in the real estate purchase. Getting solid information on the condition of a home is critical in the decision-making and due-diligence process. By all means, use the new tools available when searching for a home. But don’t overlook the importance of hiring an independent, qualified home inspector to help you understand the home’s condition. What’s the Difference between a Home Inspection and an Appraisal?By WIN Home Inspection Twitter Facebook LinkedIn
When you’re getting ready to buy or sell a home, an appraisal and home inspection are part of the process. Since both assessments require a deeper look at your home to aid in the sales process, many first-time home buyers have difficulty differentiating between the two. However, there are some key differences between them: What is a Home Appraisal?An appraisal provides valuable information for the buyer and seller, but an appraiser’s primary mission is to protect the lender. Lenders don’t want to own overpriced properties, so appraisers take a look at a home before the lender grants final approval for a buyer’s loan. Although appraisers will take note if a house shows signs of neglect – from chipped paint to broken windows – this is not their primary focus in determining a home’s value. Instead, they’ll look at a variety of other factors, including:
What is a Home Inspection?An appraisal isn’t a substitute for a professional home inspection. While the appraiser formulates an opinion of a property’s value, the home inspection will educate the buyer about the condition of the home and its major components. The inspector will key in on the home’s existing and potential future issues, alerting buyers of any red flags or areas that need repair. This will not only help the buyer negotiate a fair purchase price, it will also give them an idea of the home’s safety and potential maintenance needs. Inspectors take a deeper look at a home’s overall condition and mechanical systems, including the state of the home’s:
By Ron WynnCreators SyndicateReal estate watcher: Seeing ‘boom’ in single-family homesCompass Vice President Mike Aubrey argues even before the coronavirus outbreak, many families were moving out of cities and into the suburbs.
Whether it's a $300,000 condo or a $4,000,000 home, stuff happens. If you're buying a piece of real estate, reserve a 10- to 20-day contingency period to do your due diligence, which includes a thorough physical inspection, termite inspection, sewer line inspection, chimney inspection and mold inspection. Even though the fees you will pay to complete all these inspections can come to $1,000 or more, it is well worth it in the long run! If the news you receive after an inspection is really bad and you are still within your contingency period, you can abandon your purchase completely and receive your full deposit back. 4 COSTS HOMEBUYERS OVERLOOK MOST OFTEN, ACCORDING TO A MILLIONAIRE BUILDER If you choose to move forward with your purchase, you can negotiate repairs with the seller, although the seller is not obligated to say OK to all, or even any, of your requests. VideoIf the deal falls apart, however, the seller is obligated by the laws of disclosure to disclose the content of your inspection to subsequent buyers and forward the inspection reports upon request. Particularly in today's robust market, you'll usually hear the seller say, "It's an old house, and it's being sold as is." I often hear buyers say, "We're paying top dollar, and we should not have to pay for deferred maintenance and urgent repairs." If the news you receive after an inspection is really bad and you are still within your contingency period, you can abandon your purchase completely and receive your full deposit back. The question then becomes "What is a code violation, a health and safety hazard or an urgently needed repair versus a cosmetic need, a typical aging system still in operative condition or a complete upgrade of no urgency?" VideoFor this you need a trained eye to read and understand your inspection reports. A good realtor will walk you through the process and help identify the most significant issues, prioritizing issues from urgent to not so significant or urgent. THE BEST TIME TO BUY YOUR SECOND HOME If you are without the assistance of a trained realtor or adviser, look first at mold, water intrusion and drainage issues, as these are the most difficult to remedy and the most expensive to fix. Water intrusion can affect foundations, walls and structure, leading to health issues and impacting resale and future property value. Next, look for dry rot in the roof, roof eaves, windows, subfloor and door jams, all of which would be noted in your termite inspection. Also, take serious note of your sewer inspection and chimney inspections. Depending on where your sewer ties into the city lines, a sewer replacement could cost $10,000 to $25,000, most often closer to $12,000. VideoCorrecting poor drainage involves diverting water away from the foundation, which might necessitate French drains and additional rain gutters. These costs totally depend on how many drains are needed and where they would tie into the city disposal. Costs might range from $8,000 to $25,000. A cracked chimney that is deemed a fire hazard will need to be replaced from the break, usually at costs averaging $10,000, more likely $15,000 in a two-story home. Hillside properties are another animal completely. They require the opinion and guidance of a qualified geologist, and perhaps even a structural engineer and a civil engineer. This is serious stuff, so do not cut corners by going to someone inexperienced. GET FOX BUSINESS ON THE GO BY CLICKING HERE Also, be savvy about an overloaded, antiquated, old-style electrical system; the modern lifestyle puts a lot more pressure on the electrical system than a toaster oven and a few floor lamps. The roof is an expensive item to be conscious of, and earthquake retrofitting is something to look at, too, if it has not been handled previously. After that, most items are of less of financial consequence but still worth being considered. Don't skimp on inspections, qualified advice and repair estimates. Pick your battles based on the significance and urgency of the repairs needed and the costs associated. Be sure your request for repairs is well written and supported with realistic cost estimates. And finally, be sure you are in the hands of a competent, qualified and caring real estate broker who will guide you through the process. Ron Wynn has been among the top 100 agents in America for over 10 years, as noted on REAL Trends/Wall Street Journal. Ron has represented over 2,200 sales totaling over $1.5 billion in sales volume in his 30-plus-year career as a real estate broker in California. |
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