New construction home inspection checklist

My loyal readers know how much I believe in the importance of a home inspection once a home goes under contract or prior to closing.  It lets you take a look at the state of the current appliances and utilities and lets you know what repairs are necessary or to be expected in the future.  What you may not realize is how important an inspection is when you’re purchasing new construction.  You figure since the home is brand new that everything is perfect.  I’ve had clients buy new construction only to move in and find the air conditioning doesn’t work or they have leaky windows.  And given the current economy, it’s possible that some home builders are paying less to find subcontractors who in turn are doing poorer work.

It’s also very important to make sure you hire an inspector that’s not affiliated with the builder.  You’ll want an unbiased independent inspection to make sure everything is working the way it’s supposed to.  Here’s several items that you’ll want to look at:

1. Open all the windows.  Make sure the latches work, nothing is leaking, and that there is no broken glass.  If they have screens, make sure nothing is torn.

2. Check all light fixtures.  Make sure the switches operate and you know what light they turn on and off.  

3. Check all the floors.  Carpeting should be tightly fitted without gaps.  Tile and vinyl should not be cracked or chipped.  

4. Countertops should not be nicked or scratched.  Make sure all toilets are properly secured to the floor by sitting on them.  The tub should be free of scratches, as well.

5. If you have a basement in your new home, check to make sure you don’t see any water damage on the walls or any cracks.  Find out where the water heater, furnace, and air conditioning unit are located and how they work.  

More great tips can be found here.  It’s important to read over your contract to make sure of the period that you’re allowed a home inspection and final walk-through to look for these items.  Some contracts state that any problem you find after closing are not the responsibility of the builder, so make sure to be thorough in your inspection.

I can be reached online with more questions.

What buyers are looking for this year

We all know there’s a lot of houses on the market.  Inventory is high.  Values are down.  It’s harder to get a loan.  Interest rates are low.  People’s discretionary income is lower.  So what does all this mean in terms of the housing market?  Here’s a list of some items that Bankrate.com has put together of what home buyers are looking for when they buy a home this year.  This will also help sellers be aware of how to stage their home and what buyers are looking for when it comes time to negotiate.

1. A deal.  An amazing deal.  They want to tell everyone they know that they got this amazing house for such a good deal.  In 2007, it would have cost them $500,000, but they just closed on it for $395,000.  So this makes them a lot more critical.  They’re going to take longer than usual to find a house.  They’re not going to feel like they have to settle.  And that’s because they don’t.  Unfortunately for sellers, buyers hold the power when negotiating right now.  So understand that when turning away a low offer.  It might be worth it just to counter to see what happens.

2. Good condition.  I mentioned before that discretionary income is limited.  They don’t want to have to redo carpet and paint and put in new appliances.  They want homes that are more updated and in good condition.  When showing your home, make sure it’s clean and presentable.  It’s like putting your best foot forward at a job interview.  You only get one shot.  Make it a good one.  And reconsider taking your appliances with you when you move.  It’s likely the buyers want them to stay with the home.

3. More green.  It’s a lot more common these days to find buyers looking for energy-efficient appliances, windows, furnaces, and air conditioners.  Again, this helps them save money down the line, aside from being good for the environment.  Buyers want to know that maintaining their home will be easy on the wallet.  So if you are looking to sell and plan to upgrade some items, try to go as green and energy efficient as possible.

4. Smaller homes.  This is not to say that if you are selling a 5,000 square foot home that nobody will be interested.  But consider how you stage your home.  Make use of space.  It’s more common that buyers aren’t interested in a sitting room.  Make it into an office.  Create a craft room with your sixth bedroom.  Buyers want homes that serve a purpose because they don’t feel like they need the extra space if all it is is just space.  “Three to five years ago, if they could get a loan that would get them into a McMansion with stone and tile and brick and more rooms than they needed, they would do it,” says Jeff Wiren, president of the Portland Metropolitan Association of Realtors. “Now they’re saying ‘I don’t know if I want to heat that place and clean it.’ They’re being much more realistic.”

So those are four of the nine items that Bankrate thinks buyers are looking for in 2011.  What do you think?  As a buyer, do you agree?  I’d love to hear your thoughts.  Please leave me a comment or visit me online.

Must-notice inspection items

So you found the house of your dreams.  You’re ready to make an offer or you’ve made an offer and now have the home inspection.  Have you seen the movie The Money Pit with Tom Hanks and Shelley Long?  It’s about a couple who get a great deal on a huge house (or so it seems) but the second they move in, everything starts falling apart?  Here are some tips to avoid that happening.  And while you definitely should have a home inspection done, these are items you want to make sure you check out prior to going through with a sale because it can save you a lot of money in the long run.

1. Check out the basement, if the home has one.  If it does, there’s a good chance that your furnace, water heater, and air conditioner are all down there.  You want to get an idea of the age of those systems as well as how well they’ve been maintained.  They’re all expensive items to fix.  The furnace and air conditioner should get routine maintenance checks at least yearly.  If there is a problem, you can always request that the seller fix it, but it’s important for the future to know yourself.  The basement will also help you determine the type of construction and materials used in the construction of the home.

2. Look at the foundation.  Tyson Kunz, a contractor and owner of TTK Home in Tomball, Texas, says you need to look at the size of the trees near the home and how close they are to the home.  Over time, the roots of those trees can cause the foundation to crack and break.  Also look for cracks or gaps in any hard-surface floors to tell you how structurally sound the foundation is.  If there’s only carpet throughout, you can look for cracks in the drywall to give you an idea.

3. Look for water damage.  The first place to start is obviously in bathrooms.  Make sure that exhaust fans in bathrooms bring the moisture outside.  I had a couple once who did their home inspection to find out the fan was venting it directly into the attic, which can cause major mold problems later on.  Check that all caulking is secure and there aren’t any leaky faucets.

4. Plan a bad-weather visit. MSN Real Estate also recommends going back to view the home on a non-sunny day.  You’ll be able to see if water is seeping into the home anywhere, how well the windows seal out cold and water, and that all the systems are working properly.  So even shopping for a new home in bad weather can be a good indicator of how well the home stands up to the elements.

If you have more questions, please be sure to visit me online.

How to read an MLS sheet

For those of you who are looking to buy a home, it’s most likely that your Realtor is providing you listings to view, either online or on paper, with information from the Multiple Listing Service (MLS).  On those listings, you’re able to see photos, address, bed and bath count, and numerous other information about the home.  But for those who haven’t done it before, it’s very common for Realtors to use abbreviations as well as the MLS is known to shorten information.  I thought this might be a good lesson in some of the more common uses on an MLS sheet.  I am going to use the information from the Multiple Listing Service of Northern Illinois, now known as MRED (Midwest Real Estate Data).  This is the MLS for the region where I work.

The first thing most buyers will look at is the bedroom and bathroom count, also abbreviated as BR and BA.  Here’s the trick.  Let’s say you see a home that lists its bathrooms as 2.1.  You wonder why there’s two bathrooms and a tenth of another one.  How it works is that the number before the decimal point is the amount of full baths.  The number after the decimal is the amount of half baths (those without a shower or bath and just a toilet and sink).  So that home would really have 2 1/2 baths.  If you do see a listing as 2.5, it means there’s 2 full baths and 5 half baths, or someone made a mistake entering it.

HOA refers to the homeowners dues, where it will list an amount.  If an amount is filled in, you’ll find out there’s a frequency, usually seen as A, M, V, meaning annual, monthly, voluntary (it’s not required).  MAI stands for “Monthly assessment includes.”  Now, if the frequency is A, it means “Annual assessment includes.”  And what would be in this field are items like parking, water, etc.  Whatever is included in the dues you pay to the homeowners association.

A new required field for this MLS is the source of square footage.  You’ll most likely see a letter after the square footage is shown.  That shows what the source is for that number, whether it’s estimated, from a survey, or from an appraiser.  You can ask your Realtor what that specific letter refers to.

Now I’ll give you a few abbreviations the Realtors use when writing remarks.  They often have to shorten the description to fit everything in they want to say.

FP=fireplace
HW=hardwood
SS=stainless steel
MBR=master bedroom
SIP=screened-in porch
WIC=walk-in closet
WIP=walk-in pantry

When someone refers to a garage as 2.5 or 3.5, that does mean it fits 2 1/2 or 3 1/2 cars, or has the space for 2 cars plus room on both sides.

If you have more specific questions about how to read an MLS sheet or are ready to begin your home search, please visit me online.

Great new way to search for your dream home

We all know the Internet is becoming the most popular way to search for homes.  You’re able to virtually look inside a home to determine if you want to see it in person.  I’m about to share a whole new way of searching for homes, customized just for you.

Coldwell Banker just unveiled their brand new search tool: BlueScape.  Most people search for homes by how many bedrooms they want, bathrooms, school district, amenities, etc.  While those features are important, BlueScape allows a more customized search.  This is how it works:

You start out on the BlueScape search site. You’re asked to rate images with a thumbs up or a thumbs down, based on what you like.  You’ll want to rate at least five images, but the more you do, the better the results.  Once you’ve done that, you click on “Get results.”  You can narrow your search by town and price range.  Then you can narrow it down further by choosing certain keywords, such as “garage,” “lake,” etc.  The tool will find homes for you based on the images you liked before.

Taking their cue from popular online music sites like Pandora, Coldwell Banker figured this search was a way to explore more of people’s emotions when looking for a home.  Chief Marketing Officer Michael Fischer said this in a statement: “Home buying is often driven by a gut feeling. We’ve widened the definition of real estate search to give consumers the chance to explore those intangibles.”

Another added feature to the search tool is similar properties.  Based on what consumers choose as ones they most prefer, the Web site will provide a “You may also like” feature that shows you similar homes to what you’ve already said are ones you prefer.  This is important because if you’re looking in a certain price range, say $300,000 to $350,000 and there’s a house out there with all your preferred amenities listed for $298,000, you would have never found it otherwise.

I hope you’ll be able to check out this great new search tool, and the first of any real estate company.  As always, if you need more details on a home or need to get inside to see one, please call me at 800-858-7917 or visit me online.

Buyers hope for extension of tax credit

A lot of the buyers that were guaranteed the Federal tax credit by being under contract on a house and closing by June 30th are getting very nervous.  As the deadline is approaching, many feel they won’t be able to close on their home in time to be eligible for the credit all for circumstances out of their control.

They’re hoping Congress extends the deadline for closing through the end of September, giving them at least 3 more months to maintain their eligibility.  This week the Senate approved a 3 month extension, but they’re still waiting on word from the House to have it passed.

What’s taking so long?  Those buyers who went under contract on houses that were short sales are waiting for responses from the bank, which can take months and months to hear back.  On top of that, once they hear, they need to move forward with the process, which generally includes a home inspection and other contingencies that have to be met.

The National Association of Realtors is saying that up to 180,000 buyers who were hoping to close by June 30 and get the tax credit are likely to miss the deadline.  But even 3 months might not be enough time for many buyers, especially those dealing with a short sale.  A short sale deal can take months and in some cases, even a year or more.  Realtors are worried that if the extension doesn’t get approved or isn’t long enough, buyers will cancel contracts because they were counting on that money to help with a down payment or even to do some repairs or cosmetic updates in the houses they’re buying.  Not getting the tax credit will have a negative impact causing a lot of canceled contracts. 

If the extension is passed, it is only for those who were already under contract by the previous April 30th deadline.  No new buyers are eligible.

Do you know someone who is affected by this?  Please leave me a comment below or visit me online .

 

Coldwell Banker’s plan to extend the tax credit

As an agent of Coldwell Banker, I wanted to talk about what my company is doing to continue to stimulate the housing market.  With the tax credit expiring last week, starting on Saturday, they announced a Buyer Bonus Sales Event.  Since many agents had buyers who would have missed out on the credit if it had really expired when it was supposed to in November, Coldwell Banker decided to do something about it since it did expire on Friday.

Sellers participating in this event will offer a credit of 3% (up to $8,000) for buyers at closing.  The contract has to be signed prior to July 31, 2010, but right now there is no set deadline on a closing.

Jim Gillespie, the president and CEO of Coldwell Banker Real Estate LLC said, “Without restrictions such as household income caps, the Coldwell Banker Buyer Bonus Sales Event allows for greater participation for all homebuyers.  And our sellers have a unique opportunity to allow their home to stand out from the competition in their marketplace.”  So no one is limited by this event.  Anyone (first time buyers or repeat buyers) can take advantage of this bonus.

To find a home participating, you can go to the Coldwell Banker Web site and check the box labeled Buyer Bonus Properties in your search criteria.  As you drive around neighborhoods you’re looking at, you can also see those that have a special rider on their yard signs.  Feel free to call your local office to find out if the property you’re interested in is participating.

Sellers planning to sell their home and want to participate, be sure to let your agent know.  You’ll get the benefit of national television advertising, promotion on the Web site, as well as social media outlets such as Facebook and Twitter.

This is a great chance to get some money back if you were unable to participate in the government’s program.  If you’re interested in selling or buying, please be sure to visit me online.