Buying? Twelve Red Flags That Should Raise Concern
By Michele Dawson
Indeed, more than 40 percent of the previously owned homes on the
market have at least one serious defect, according to HouseMaster,
a major home inspection
company with offices in more than 390 cities in the United States
and Canada.
"Virtually every 'used' home needs some repair or improvement,"
said Kathleen Kuhn, CEO and president of HouseMaster. "That's
to be expected. But with today's high prices, you want to
make sure that you are aware of any major problems in a house
you are considering purchasing, and what it will take to remedy
the situation."
Drawing from their own findings from more than one million home
inspections, HouseMaster says the most serious home
defects to be on the lookout for are:
1. Cracked heater exchange
2. Failing air-conditioning compressor
3. Environmental hazards including radon, water contamination,
asbestos, lead paint, and underground storage tanks
4. Moisture in the basement
5. Defective roofing and/or flashings
6. Insect infestation -- termites or carpenter ants
7. Mixed plumbing
8. Aluminum wiring
9. Horizontal foundation cracks
10. Major house settlement
11. Undersized electrical system
12. Chimney settling or separation
Kuhn says most of these problems can be repaired. However,
depending on the specific problem, the cost can be substantial,
particularly if the defect involves one of the major systems.
The cost could become a factor in whether you ultimately buy
the house.
For example, a new air conditioning compressor could cost
you up to $1,200. A new roof or repairs can cost at least
several thousand dollars. A wet basement could cost up to
$5,000 to remedy
If you enter negotiations to buy a particular house, your
agent should advise you to provide a provision for renegotiating
or backing out of the contract if a home inspector finds major
problems.
"If the property inspectors find that little or no corrective
work is required, you have little or nothing to negotiate,"
say Eric Tyson and Ray Brown in their book, Homebuying for
Dummies, 2nd Edition (Hungry Minds, Inc., 2001). "Suppose,
however, that your inspectors discover the $200,000 house
you want to buy needs $20,000 of corrective work for termite
and dry-rot damage, foundation repairs, and a new roof. Big
corrective work bills can be deal killers."
If repairs are needed, there are several ways to proceed if
you still want to buy the house, the Dummies book advises.
The sellers can leave enough money in escrow to cover the
cost of repairs, with instructions for the escrow officer
to pay the contractors as the work is completed.
The lender can withhold part of the full loan amount in a
passbook savings account until the work has been done.
The sellers may give a credit for the work. Lenders may disapprove
of this last alternative because there aren't assurances that
the repairs will be made.
A home inspection usually costs between $250 and $400. Hire
a qualified inspector. Try to get referrals from friends or
anyone you know who has had a satisfactory experience with
a home inspector. Also, look for affiliations with organizations
like the American Society of Home Inspectors or the American
Association of Home Inspectors. Both groups require its members
to be certified, meet professional qualifications, and adhere
to specific business ethics.
Once you make an appointment with a home inspector, it's
important to be there.
Your investment of spending these few hours with the inspector
could prevent headaches and save time in the future. As the
home inspector examines the various systems and components
of your home, ask him or her to explain what problems may
be encountered down the road, what signs to look for, and
how to prevent them. Try to learn how things work and how
to maintain them. The inspector may also point out little
flaws or oddities that don't measure up to being mentioned
in the report, but may warrant keeping an eye on.
Says Kuhn of HouseMasters, "A pre-purchase inspection
is your best protection against buying a home based more on
emotions, rather than as a sound investment."
The Realty Times
Published: November 11, 2003
www.RealtyTimes.com
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