Saturday, September 16, 2017

Deal Breakers: 6 Inspection Issues That Kill The Deal

By Laura Agadoni

There are few guarantees in life, but a home inspection report turning up “issues” with your new house is probably one of them.

Sometimes the notes on a home inspection report are minor (like a blown-out light bulb), while others are major (such as a bad foundation or a leaky roof).
But when you’re buying or selling a home, the major issues are the ones to focus on, as they can curb an entire home sale. Both buyers and sellers should be wise to the “big deal” problems below and knowledgeable about what to do if something like them is revealed in your inspection. The good news? Buyers, you don’t have to run away screaming … or even back away slowly. Sometimes it might be OK to proceed with the purchase of that otherwise dreamy home for sale in Sarasota, FL or Portland, OR.

Read on to find out which home inspection report issues can hold back a home sale.

1. Asbestos

We’ve learned much about asbestos since the days when this cancer-causing substance was used as fake snow and breathed in by actors in movies — The Wizard of Oz poppy field scene, for one. But pre-1975 homes could have asbestos in roofing felt or in roof penetration sealant. The tape used to seal ducts, cement board siding (transite), and older tiling (usually in 9-by-9 tiles) could also contain asbestos.

Unless disturbed, asbestos isn’t usually problematic. “Asbestos in siding or 9-by-9 floor tiles isn’t a huge issue and can be remediated by covering them with other materials to protect them from damage,” says Welmoed Sisson, a Maryland home inspector. “Asbestos insulation around pipes that is friable [crumbling] is a serious health issue and should be remediated by a qualified asbestos abatement contractor prior to closing.”

2. Radon in the basement

Radon, a naturally occurring, radioactive, carcinogenic gas, can sometimes be found in homes, usually in basements or crawl spaces. “But in today’s tight homes, it can filter up through the entire structure,” says Sisson. Although most homes don’t have a radon problem, if yours does, you should fix it. “Radon levels above 4.0 picocuries per liter call for the installation of an active remediation system.” This could cost between $1,500 and $2,500. If you can’t afford to solve a radon problem before you sell, you could offer to come down on your asking price so the buyer can have this done.

3. A buried oil tank

If you’re buying a home built between the 1930s and the 1990s, there’s a chance something large is buried on the property. Unfortunately, it’s not treasure — it’s an oil tank. “The seller really needs to take care of this,” says Sisson. If the tank was buried properly or professionally decommissioned, and the seller can show you suitable paperwork showing it was done right, you could leave it there. Or you could ask to have it removed. “An intact tank with no leakage can run upwards of $5,000 to dig up,” Sisson says. But if an inspection shows that the tank is leaking, it could costs tens of thousands of dollars (or more if groundwater is affected) to correct.

4. Exposed wiring

If you’re buying a house from a seller who fancied themselves as a jack-of-all-trades (but was not really good at any trade) and you find exposed wiring, what should you do? “This is generally not a huge issue,” says Sisson. Exposed wiring, however, can pose a safety hazard. A bigger concern is knob-and-tube wiring (old-style wiring that is pretty common in homes built before 1930). That system rarely holds up for more than 80 years. “Outdated [or exposed] wiring should be updated, but it’s preferable to have your own contractor do it so you have control over the quality of the work and can be sure proper permits have been obtained,” says Sisson. This means it might be something the buyer should take care of — and negotiate that the work be reflected in the home’s price.

5. Black mold

If hearing about black mold conjures up images of the Creature from the Black Lagoon, you might freak if an inspection report shows your potential new home is filled with it. Plus, “just having the word ‘mold’ on an inspection report can kill financing,” says Sisson. It’s even worse if you or anyone in your family has a respiratory condition. In that case, “It may be prudent to pass on the house altogether.” But if you really want the home, have the seller hire a professional to get rid of the mold. And then have the place tested again before you buy.

6. Termites


If your inspection report reveals termite damage, it will be a tough sell. And fixing the damage will be expensive. “All the affected elements must be exposed, damaged pieces removed and replaced, and the remainder of the house treated,” says Sisson. A house with termite damage also calls for an inspection by a structural engineer to “report on the integrity of the framing and whether any additional support members need to be added.” If you want to buy a house with termite damage, do so only after you have paperwork from the termite company (paperwork that you would show your lender) stating that the house now has a termite warranty.

The bottom line about home inspection reports


If you’re selling a house, any big inspection report issues will probably scare off buyers. But that doesn’t mean you have to fix the problems yourself. “I always advise my sellers not to fix anything,” says Janine Acquafredda, a Brooklyn, NY, agent. Instead, you can cut a deal with the buyer. “Buyers like to choose their own people to do the work. [That way], they can control cost and quality.”

But Mark Ferguson, real estate agent and creator of Invest Four More, a website that helps people become real estate investors, has the opposite opinion: “The more a seller is willing to fix, the more confident a buyer will be they are buying a good home.” Ferguson advises his clients to fix any known issue before listing.

And Sisson gives this advice to buyers: “Know how much you’re willing to spend on necessary fixes. [You can then] start thinking about updates and cosmetic stuff.”

My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.

The role of technology is rapidly changing how the real-estate market functions in this country today. Re/Max Preferred Choice is embracing these new mediums of communication to better serve our customers. We have created our company to better place important information in your hands to help you with your housing needs. For a personal consultation please contact me at my Website.

It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.

How To (Finally) Get Your Offer Accepted

 By Laura Agadoni


Get out of the house-hunt rat race by crafting an offer that can’t be refused.

In a hot real estate market where you keep losing out to other buyers, you might fantasize about taking a hint from The Godfather and making the next seller an offer they can’t refuse. But since you live on the right side of the law (and don’t want your next residence to be the slammer), you need to play fair

. The good news is that you can submit an offer on that Columbia, SC, home that seals the deal … without breaking anyone’s legs. Learn how to make an offer on a house that gets the job done with these eight tips.

1. Be preapproved before making the offer

Being preapproved shows the seller that you have your financial ducks in a row. Even better is to have your lender pre-underwrite your file, a more thorough process in which you provide all pertinent documents to your lender. Doing this puts you in the same league as all-cash buyers. “This will allow you to offer a shorter time to close because you have already cleared all of the financing hurdles, aside from appraisal, before you write the offer,” says Morgan Franklin, a Lexington, KY, agent.

2. Don’t lowball

If you haggle for produce at the farmers market, offering asking price (or above) right out of the gate might not be in your DNA. But attempting to negotiate on a house probably won’t help you get to the closing table in a hot market. “I would go in at listing price or higher if the comparables support a higher offer price,” says Tracey Hampson, a California agent.

3. Decrease your contingencies

Although you should go in with a strong offer, money isn’t everything, and it doesn’t always buy a seller’s happiness. If money’s been your only focus until now, change your game plan by waiving some contingencies. If you’re preapproved for a mortgage and have — or can get a hold of — some extra cash, you can waive the financing contingency, an agreement that lets you out of the deal if you can’t get financing. “This is a strategy for those who have extra cash or are using banks that do not require repairs,” says Mark Ferguson, a Colorado real estate agent and investor. But keep in mind, “If the appraisal comes in low, you must come up with the difference in cash.”

Another contingency to consider waiving is the home inspection. This is typically not recommended, however, as it removes your ability to ensure that the home is sound. “This should only be done by experienced homebuyers who know what they are doing,” says Ferguson. A safer approach is to shorten the inspection period. “Don’t ask for 14 to 30 days,” says Alex Cwiakala, a Massachusetts real estate agent and investor. “Call inspectors and have them ready to go in 24 to 48 hours.”

4. Add an escalation clause

If you think a seller will get more than one offer, you can help ensure yours will be the one picked by having your offer automatically increase by a predetermined amount. Note that “if the escalation clause is triggered, sellers generally have to disclose the competing offer to keep things honest,” says Anne Miesen, a Texas agent. Let’s say you offer $400,000 for a home with an escalation clause of $5,000 capping at $430,000. If someone else offers $410,000, your offer will automatically escalate to $415,000, beating that other offer. But if another offer comes in higher, such as $450,000, and your cap is $430,000, you would be out.

5. Offer to pay for closing costs or home warranties
Negotiations can include more than just the sale price of the home. There are costs involved with the closing process, and in a hot market, you can use those costs to your advantage by offering to pay them yourself. And here’s another option: “Don’t ask for a home warranty,” says Tracey Hampson. “That is, on average, a $500 savings to the seller. And who wouldn’t appreciate that?”

6. Write a personal letter to the sellers

Even if the sellers have a bidding war on their hands, it can still be difficult for them to part with the home they love, the home where they have made many happy memories. Sellers with an emotional attachment often want to know that the new owners will cherish the home as much as they did. “Many times, buyers can appeal to the sellers on a personal basis, acknowledging the care the owners have taken with the home and expressing their desire to continue along that same path,” says Marc Carver, an Atlanta, GA, agent. “I’ve seen this done via handwritten letters, video testimonials, and face-to-face interactions.”

7. Get creative

When trying to get your offer accepted, it can pay to be creative. “Are you an artist? Maybe paint a picture of the house and give it to the seller with your offer,” says Jake Goodson, a Portland, OR, broker. “Out-of-the-box stuff always hits home. But at the end of the day, your offer has to stack up financially too.”

8. Be willing to wait

When you get too invested in one particular home, you might overbid. Sometimes it’s best to step back and evaluate the situation. “There are thousands of homes; there is not a perfect one,” says Bruce Ailion, an Atlanta, GA, real estate agent and attorney. Plus, if you wait for all the excitement to die down, you might just get the house anyway. “Many high bidders back out during inspection. The lower bidders may get a second chance at a more appropriate price,” says Ailion.

My name is Scott Grebner and I have been helping my clients realize their own personal real estate dreams. Real estate is a relationship-based business that works best when client relationships are built on trust and confidence. My goal is having clients be completely satisfied with the professional and caring service they have received.

The role of technology is rapidly changing how the real-estate market functions in this country today. Re/Max Preferred Choice is embracing these new mediums of communication to better serve our customers. We have created our company to better place important information in your hands to help you with your housing needs. For a personal consultation please contact me at my Website.

It seems that the dream of past generations was to pay off a mortgage. The dream of today’s young families is to get one. I would love to hear from you, about your Real Estate Dreams and questions.