Ordered the home inspection and appraisal today
Hopefully the appraisal comes in for more than I offered.
Hopefully the appraisal comes in for more than I offered.
Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
First time home buyer
- Thread starter dukebound85
- Start date
- Sort by reaction score
Nice! Take good notes during your home inspection-the inspector will likely show you some helpful home maintenance tips at the same time.
Are you getting a mortgage? If so, and the appraisal comes in for less than you offered, the mortgage company will not underwrite the loan off anything higher than the appraised value, so you'll either have to renegotiate or cancel the contract. When we bought our house, the appraisal was under our contracted price. It was not a huge swing (under 10k) but enough that we had to renegotiate, and we met the sellers midway-we put down a bit more, they agreed to a slightly lower price, everyone was happy. Chances are, your appraisal will be higher than your offer, and if it's not, you're not necessarily on the hook for paying more (but your attorney and realtor can help with that negotiation if it comes up).
Yea, I am planning on stopping by the home inspection about mid way through it to get a nice recap and what not.
My real estate agent feels it will be at or above my offer. In the event it isn't, I will have to make a plan of action.
I keep thinking about affordability. I hope it is easy on me as it is a few hundred more a month than an apartment....but for 30 years. Ugh second guessing myself
I was at my inspection for the whole thing, almost 5 hours, and I'm glad I was. Yes, everything will be in the full report which you'll get within a day or two, but as he was finding stuff, he was telling me and I was able to ask questions right there instead of having to do it over email or phone after the fact.
Plus, make sure showing up midway through is OK with the inspector. I had to sign some paperwork and give him payment before mine could get started. Maybe it varies depending on the state law, or that's just how he preferred to do it.
Good luck with the inspection and the next round of negotiations that follows. My seller and I finally came to an agreement on repairs last week so now I'm waiting for the appraisal which I should get this week or next.
Heh. We paid $600/mo for our 2BR apartment (cheap, I know). I paid $9,000 in property taxes and interest last year.
One thing about home ownership vs renting an apartment......there is considerably less flexibility. Sudden job change and transfer to new area? Well....there you are, tied up with a mortgage. On the other hand, owning a home provides great benefits come income tax time and as the years roll by, too -- someone who buys a home for, say, $200, 000 and then in ten years can sell it for, say, $350, 000, isn't doing all that badly in the end.... Real estate taxes and interest on mortgage payments can make a difference at income tax time in the US. AND in the event of a need to move out of the area for a job transfer or other reasons the owner still has the option to hold on to the property and rent it out. This contrasts greatly with paying a landlord rental payments over those same ten years with in the end nothing to show for it.
I agree, I would want to be there for the whole inspection for the same reason. Too many little offhand details came up during the course of the inspection to make it into the report, and I was glad I was there for them.
If for some reason your inspector told you not to be there, I would find a new inspector. No joke.
That is my mindset. If I have to move out of the area, merely rent it out. I just hate the idea of paying for someone else's equity. Why not buy if I am able is my mindset lately.
That was my mindset when I bought my house 3 years ago. I still had 6 months on my current rent agreement at the time. I talked to the rental company who told me I was allowed to sublease so long as I was the one that remained responsible for the apartment. I found a renter for the last 6 months of my lease, charge the renter what it cost me to live there on average, and bought my house.
If I am going to spend money on something like housing I want to own the damn thing when it is all said and done.
Congrats on the purchase. Does this house buying mean your job hunt produced something too?
I have opted to terminate my contract due to the results of the home inspection. There were too many little issues and signs that the house wasn't cared for that I did not see when I was at showings and when I made the offer.
While I feel bad for wasting everyone's time, I need to look out for myself. Just sucks as my freind is my real estate agent and is also my landlord. Owell, it was a very informative process for me and something I want to go at my pace and find something I am super excited about.
I am glad that the contracts in CO are so buyer friendly that I would be getting all of my earnest money back
Only money I am out is the home inpsection (325) and credit report from lender
While I feel bad for wasting everyone's time, I need to look out for myself. Just sucks as my freind is my real estate agent and is also my landlord. Owell, it was a very informative process for me and something I want to go at my pace and find something I am super excited about.
I am glad that the contracts in CO are so buyer friendly that I would be getting all of my earnest money back
Only money I am out is the home inpsection (325) and credit report from lender
Bummer about the house, but glad you are only out the home inspection and credit report costs! The good news is that the credit report is still good for the next house...
Just out of curiosity, what issues did the house have?
Just out of curiosity, what issues did the house have?
There were some safety issues, such as sidewalks that needed to be repaved up to same level and home circuitry. Additionally, there were signs that the house had quite a bit of shortcuts done with the roof. The furnace would need to be fixed as well. In all, just alot of little issue and some big ones that turned me off of it. Especially when combined witht he fact that the neighborhood wasn't as nice as I had initially thought when going down there more.
If I make a 200k+ purchase, I want to be excited. I wasn't
VERY wise to pull out now rather than saddling yourself with problems that are already obvious now and with problems which could crop up in the future that aren't yet apparent. I'm sure this is frustrating and disappointing, though. You're making the right choice not to get involved in something which could be far, far more costly than anticipated...... As most homeowners will tell you, there are always those pesky things which crop up demanding expenditure of funds, and of course there are the fun expenditures as well -- in the end it all adds up!
That's exactly what home inspections are for, so don't feel bad. He's not getting paid now, but he'll get his commission when you find something. If your agent is a good friend and good agent, he wouldn't let you buy that house.
I don't know how Colorado law works, but in Missouri, the seller has to provide a disclosure and report any issues they know about the house. There are some things that they truly don't know about when the house first goes on the market. For example, in addition to standard inspections, I had a sewer line inspection done on the house I'm closing on in a couple weeks. The sewer line was badly damaged and in need of repair. It wasn't on the disclosure and that's fine, I doubt anyone here knows the condition of their sewer line. But the seller gets a copy of that inspection report, so they now know about the sewer. It's a great negotiation tactic, because my agent was able to twist their arm a bit and say "Now you know about the sewer. You can either fix it and we buy, or you can not fix it and we walk away. But if we walk, when the house goes back on the market, the sewer needs to be on the disclosure and that's going to drive buyers away immediately." Needless to say, the seller is fixing the sewer.
Not saying use that tactic on this house, I wouldn't touch anything with shoddy wiring and a half assed roof job either, but keep that in mind on the next house you like if smaller things are found in the inspection.
And the best judge of a neighborhood I found while house hunting is to look at the cars in the neighborhood. It sounds a bit stereotypical, not every well off person is driving around in a brand new car, and not every lower class person is driving around in an old s**tbox without a muffler and mismatched colored body panels, but it's a decent indicator of how the neighborhood is.
On the other side, you could use this counter the offer and use this as leverage in getting the price lowered.
Little things to me don't mean a thing. I have purchased several house and apartment buildings (4-12 unit complexes) and I pretty much look for major things.
Little things like a leaky faucet to a window that is broken. All good. If I see major things like leaks under the house, or roof leaks I use them to see if the owner will come down on their price. If not then I move on to the next.
Best of luck with your next attempt!
Or a shared garage! Yes I saw one in a house I considered buying.
My advice for the OP is go through a reputable mortgage company. And verify you can afford the payments. During the bubble, as you probably know, banks were very bad about checking your finances. They would practically give you any amount of money you wanted. I think they have gotten better about this, but remember that your ability to consistently make a monthly house payment always looks better on paper. Be conservative. You are probably all ready familiar with, but if you did not have them before, now you will have a variety of utility payments which can be substantial. I'd also suggest not to make a budget that does not allow savings for emergencies. Ideally you want, no matter what your situation $3000 minimum, $5000+ preferred in the bank for unexpected repairs of car or home.
How about these issues:
An addition was put on without getting a building permit. The following was not done to code:
No GFCI outlets in wet areas
Sewer was under the addition, and left alone, in spite of the fact that it is a concrete pipe, which is not allowed beneath a building. The sewer line is breaking up and needs to be replaced.
Stairs between upper floor and ground floor do not meet tread/riser code.
Further, the following construction problem with the addition:
Roof over part of the addition leaks. This is an outdoor deck. Mold is growing above the ceilings below.
Not only that, the windows had low-e glass. Not any more! the argon gas leaked out, causing a white film to form on the inside faces of the glass.
And the clincher
hideous carpeting covers wood floors.The seller agrees to pay for all the repairs above, not including the carpet of course, but the windows, yes. This is to be done before any money exchanges hands, or at least before closing.
If you're the buyer, do you agree to purchase the home based on those things being fixed by the seller?
As for the deal you backed out of, did you explore the possibility that the seller would fix the problems identified?
How about these issues:
An addition was put on without getting a building permit. The following was not done to code:
No GFCI outlets in wet areas
Sewer was under the addition, and left alone, in spite of the fact that it is a concrete pipe, which is not allowed beneath a building. The sewer line is breaking up and needs to be replaced.
Stairs between upper floor and ground floor do not meet tread/riser code.
Further, the following construction problem with the addition:
Roof over part of the addition leaks. This is an outdoor deck. Mold is growing above the ceilings below.
Not only that, the windows had low-e glass. Not any more! the argon gas leaked out, causing a white film to form on the inside faces of the glass.
And the clincher
The seller agrees to pay for all the repairs above, not including the carpet of course, but the windows, yes. This is to be done before any money exchanges hands, or at least before closing.
If you're the buyer, do you agree to purchase the home based on those things being fixed by the seller?
As for the deal you backed out of, did you explore the possibility that the seller would fix the problems identified?
If I'm the buyer, I would get written estimates from contractors I trusted. Then I'd ask for a credit on the sale of the home for the amount of the repairs, and I've have the repairs done myself.
That many issues, I wouldn't trust them to bring in contractors who would do the work up to par. And what would look good for a short term inspection might not hold up for years of use, and if I'm not the person who paid for the repair I have no recourse when something breaks.
Problem for most buyers: cash flow. They're using their savings to make the down payment on the loan. The seller can pay the contractors from the proceeds of the sale, that is, the money from the buyer's lender. So it doesn't help the buyer to get the repairs done right away because just having a smaller mortgage for 30 years is not going to help pay for the construction this year.
This is a real situation that I'm aware of. The buyer has gotten estimates from contractors the buyer's realtor knows and trusts. The seller is in the process of getting "second opinions".
My guess you have figured out that "home inspection" when used as an exception is your get out of jail free card. All houses will have something wrong with them.
In the 90's I looked at a big beautiful 1880s house, 4 thousand square feet, divided into 3 apartments for college kids, on the market for $90k in Northfield, Mn. I knew it needed work, was afraid that repairs would price it above the current market (at the time) and offered $70k. The offer was accepted, but when the house inspection came back, I was presented 3 pages of issues- you name it, it was there. Ultimately after seeing it all in black and white, I did not want to marry this house and backed out of the contract. Besides the lead water pipes, the worst issues were saggy floors, dirt floor in basement, and loose plaster on the walls, besides ancient electrical wiring, a bad roof, poor drainage, etc, etc. This was the house I previously mentioned with a shared garage. Sadly this house used to sit on a large city lot, but some previous owner had sub divided the lot for another house... If it had not been on a tiny lot without a shared garage, I might have gone for it.
Ah, yea, that's messier. But when you have that big a list of issues, you need to be damn sure it's the right house for you (and that you have some sort of emergency fund for the things that the inspection might have missed). The biggest thing that would worry me from what you listed is the sewer pipe-fixing those can get pricey, and if it wasn't fixed properly before the sale is completed then you're really up a creek.
The first house my wife and I bought was over 200 years old. It did have some issues--many due to the previous owner. There was a distinct lack of modern insulation. But it did also have gorgeous heart-pine flooring that would be difficult to match today, hand-carved paneling and stair bannisters, and structural beams that were recycled from a nearby Revolutionary War fort. New houses are crap.
Agreed. My home was built in the 1920's and still has the original floor and moldings. Love older houses.