Florida Real Estate Blog

What Happens When Buyers Have a Home Inspection Done?

TALLAHASSEE, Fla. – Oct. 11, 2012 – Many homebuyers don’t understand how a home inspection works. Buyers should first understand an inspection isn’t adversarial. Everyone involved in the purchase – the buyer, the buyer’s agent and the listing agent – have the same goal, which is to move forward with a clean sales transaction.

Inspection tips

• The buyer, who hires and pays the inspector, should make sure the inspector is licensed. He or she should also read the seller’s disclosures and note any questions they have for the inspector. (Note: John Elwell also recommends that your inspector is also accredited by the American Society of Home Inspectors (ASHI) and adheres to its standards and Code of Ethics.)

• If possible, buyers should follow the inspector everywhere, including the roof and into the basement or crawlspace. However, buyers should understand that an inspector’s job is to note problems. He may not have all the answers, such as information about the cost of potential improvements.

• While the home listing agent advocates for the seller, the buyer’s Realtor should also take part in the inspection to help advise the buyer how to proceed if the inspector uncovers serious flaws.

• After the inspection, the buyer and his Realtor should examine the detailed inspection report and discuss the next step.

• Experts generally recommend that buyers not bring along a relative or friend who is a contractor. Since they’re not licensed property inspectors, contractors could raise unnecessary red flags that hamper the transaction.

Full inspection versus four-point inspection

For some older properties, mortgage lenders or insurers require a four-point inspection, which sounds as if it’s top of the line compared to, say, a one-point inspection that doesn’t actually exist. However, “four point” refers to the number of housing elements checked, not the quality of the inspection.

Since the cost of the four-point inspection is generally lower than a full inspection, some buyers cut corners to save money. However, they should understand what a four-point inspection does not cover.

In general, the elements covered in a four-point inspection are the ones that could cost a lot to repair should something go wrong shortly after a home purchase. They include: roofing, electrical work, heating-air conditioning systems and plumbing.

Other elements that can need repair in the early years of homeownership – such as appliances, hot water heaters, etc. – are not included in a four-point inspection.

© 2012 Florida Realtors®

Reprinted with permission. Florida Realtors®. All rights reserved.

Florida's Citizens Property Insurance Corporation Suspends Binding New Policies due to TS Isaac's Approach

Be aware that due to the close proximity of Tropical Storm Isaac, which could soon become a hurricane, Citzens Property Insurance Corporation, the state run insurance company, has suspended writing new homeowners policies. Most other companies will follow-suit due to the high risk of damage occurring because of the storm. This is normal in our state. So if you don't already have your policy in place, you will likely have to wait until all threat to the state has passed. Call your insurance agent for more information.

If you are buying a home here, you should note that real estate professionals in Florida use contracts that take into account the possiblity of a storm interrupting insurance underwriting. Normally, our contracts give you the right to delay your closing until the companies are again writing policies. See your contract and speak with your real estate agent.

The last thing you want to do is buy a home just as a hurricane hits when you have no insurance coverage. If you are financing your purchase, your bank will also refuse to "fund the loan" without proof of insurance. It is the people paying cash and doing "for sale by owner" transactions that often get caught. I have heard a few horror stories. Don't be one of them!

So get the facts. Speak with your real estate professional and your insurance agent to make sure that you are not at risk.

If you would like to check out the Citizens Insurance homepage, click on the following link: Citizens Insurance

Posted by JOHN ELWELL - REALTOR at CENTURY 21 Bill Nye Realty, Inc.  813-783-4444. Licensed in Florida.

Home Buyers More Confident When a Home Inspection is Done!

DES PLAINES, Ill. – April 18, 2012 – A study done by the American Society of Home Inspectors (ASHI) finds that 88 percent of buyers gain peace of mind from a home inspection, but a sizable number are confused about them.

According to the survey released by ASHI, 85 percent of people surveyed believe distressed properties, such as foreclosures and short sales, can be good deals; and 84 percent would be more likely to purchase one if a home inspector found it to be in good condition.

While homeowners consider a home inspection important, however, many don’t fully understand what it means. More than one in four (28 percent) mistakenly believes that an inspection verifies that a home complies with local building codes. More than one in 10 (12 percent) confuse a home inspection with an appraisal.

“ASHI is focused on raising consumer awareness about the value and components of a home inspection,” says Goldstein. “We will continue to take active steps to clarify for homeowners and homebuyers alike what should be expected during an inspection conducted by an ACI, and set high standards for our members to help ensure their customers are well-informed and satisfied.”

While almost nine in 10 adults say a home inspection increases their confidence, almost as many – 84 percent – said that home inspections are a necessity, not a luxury.

Harris Interactive conducted the online survey.

© 2012 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.

Citizens Insurance to Require Inspections if You Want Sinkhole Coverage

TALLAHASSEE, Fla. – Sept. 30, 2011 – Effective tomorrow, Oct. 1, 2011, Citizens Property Insurance Corp. won’t automatically cover sinkhole damage through an insurance rider in certain high-risk areas without a pre-coverage sinkhole inspection. While the inspection is a new requirement for the state-owned property insurer, many private insurers already require sinkhole inspections.

The change applies to all new policies in the affected areas – both existing homeowners applying for first-time sinkhole coverage and people planning to buy a home. Homeowners who currently have sinkhole coverage through Citizens do not need to schedule an inspection.

The new rule is effective for home purchases in four Florida counties: Hernando, Hillsborough, Pasco and Pinellas. The inspection applies statewide, however, if an answer is “yes” to any sinkhole-related question on the insurance application.

A Citizens-approved inspection firm must perform the sinkhole inspections. The homebuyer must pay half the inspection fee directly to the inspection company and Citizens will pay the other half, though the fee is non-refundable even if Citizens turns down the sinkhole coverage application.

“According to published information from Citizens Property Insurance, a sinkhole inspection report could take up to 30 days to complete,” says Margy Grant, Florida Realtors corporate counsel. “To avoid any delays before closing, we advise Realtors to secure property insurance sooner rather than later.”

According to Citizens, a negative sinkhole inspection does not automatically disqualify a home from coverage, but it makes the approval process more complicated.

Grant says that both residential purchase contracts available from Florida Realtors contain optional addendums that would protect buyers if they failed to secure sinkhole coverage. “Both the FAR-9 and the FAR/BAR contracts allow a buyer to withdraw if they cannot get ‘comprehensive’ homeowner’s insurance at an agreed upon price,” she says. But Grant reminds everyone that they must use the correct addendum.

Citizens has posted a PDF list of frequently asked questions on its website about the new sinkhole policies. For more information, go to www.citizensfla.com

© 2011 Florida Realtors®

Reprinted with permission. Florida Realtors®. All rights reserved.

Flood Insurance Program's Future Still Not Clear

WASHINGTON – Sept. 6, 2011 – Congress probably won’t reach a long-term agreement on extending and updating the National Flood Insurance Program (NFIP) before it expires on Sept. 30.

Most observers expect Congress to vote for another short-term extension, which has keep NFIP going since 2008, with a few program expirations in the meantime. While Congress usually makes coverage retroactive when it reinstates the program, the lapse causes delays in some home closings if the lender requires flood insurance coverage, and the buyer did not arrange for it before the program went on hiatus.

Homebuyers can avoid problems if they secure flood coverage prior to the expiration date, though it’s never clear how long a coverage hiatus might last. When the program lapsed in June 2010, NAR says approximately 47,000 home sales were delayed or canceled; and if another lapse occurs, NAR economists estimate that 1,300 home sales could be stalled per day.

The two houses of Congress have addressed the problem but not agreed on a solution. The House passed a bill backed by the National Association of Realtors®, the “Flood Insurance Reform Act,” H.R. 1309. It would allow flood insurance premiums to rise up to 20 percent annually along with other changes.

The U.S. Senate introduced legislation that would allow premiums to rise up to 15 percent per year and, at the same time, forgive the program’s debts, which the House has not addressed.

© 2011 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.

Image from FEMA

4 Ways to Trim Your Property Insurance Premiums

ST. LOUIS – Dec. 2, 2010 – In today’s economic climate, people want to save money wherever they can. Here are four ways to reduce homeowners insurance rates compiled by HomeownersInsurance.net.

1. Shop around. Some insurance companies have raised house insurance costs to recoup losses from the financial crisis. Others are competing for new customers by offering lower rates. By shopping around, people can find better deals on homeowners insurance.

2. Re-evaluate coverage amounts. Many policies have inflation protection provisions, which automatically increase coverage amounts. This was a good item in the years leading up to the crash, but today they should be looked at more closely.

3. Check personal credit reports. Homeowners insurance companies check credit history before figuring rates, similar to how lenders do. This is done to help them assess the risk of payment and likely individual responsibility.

4. Avoid small claims that can become expensive. Homeowners should have the highest deductible they can comfortably afford and repair minor items out of pocket rather than filing a claim. Filing a claim for every broken window or leaky pipe can increase premiums by 10-15 percent.

© 2010 Florida Realtors®
Reprinted with permission. Florida Realtors®. All rights reserved.

What's the Difference Between a Home Inspection and an Appraisal?

Des Plaines, Ill. (May 18, 2010) - According to the National Association of Realtors (NAR), existing-home sales jumped 6.8 percent in March after three straight months of declines, with first-time homebuyers accounting for 44 percent of existing-home purchases. In preparing to finalize their purchase, these new homeowners will be forced to learn what might seem like a confusing language. The American Society of Home Inspectors (ASHI) educates homeowners and buyers alike that while both an appraisal and an inspection are vital, they are different and neither should serve as a substitution for the other.

An appraisal assesses the market value of a home.  Typically, a bank requires an appraisal when approving a loan for either the purchase of a home or the refinancing of an existing loan.  This process is often mistaken by the homeowner as a home inspection. While an appraisal confirms the home's market value to ensure the lender is not over-insuring the property, it is not intended to provide a thorough assessment of the overall condition and safety of the home.

According to The Federal Housing Administration (FHA), the lender conducts an appraisal to estimate the value of a house, to make certain the house meets FHA minimum property standards and is marketable. However, during a home inspection a qualified inspector takes a detailed look at the physical structure and systems of a house, from the roof to the foundation. The average time taken to conduct an appraisal is merely a fraction of the time it takes a certified home inspector to perform an inspection of the same house.

Unlike an appraisal, an ASHI home inspector's report will examine the condition of the home's:

• Heating system
• Central air conditioning system (temperature permitting)
• Interior plumbing and electrical systems
• Roof, attic and visible insulation
• Walls, ceilings, floors, windows and doors
• Foundation, basement and structural components

ASHI reminds homeowners that a home purchase is not the only time to consider scheduling a home inspection. Even if you plan to remain in your home for several years, the benefits of a home inspection are invaluable.  Homeowners should schedule a maintenance inspection every three to five years to identify problems before they become costly repairs. A home inspection can also help homeowners identify potential issues as part of a major remodeling or renovation project.

"Even as the economy begins to bounce back, it is still so important for homeowners to plan ahead and protect their investment," said David Tamny, ASHI president." A basic maintenance home inspection can save the consumer the cost and inconvenience of an expensive repair down the road. An ASHI certified home inspector can often spot potential problems before the damage happens."

Homeowners and homebuyers can find a local ASHI certified home inspector to schedule an inspection on the association's website. ASHI's "Find an Inspector" tool allows homeowners to locate an inspector in their area by language or services provided. Always check with your local inspector for a complete list of services provided.

Source: American Society of Home Inspectors Press Release

Nothing is Perfect and That Includes Resale Properties - Be an Informed Buyer!

When I bought my little house here in Zephyrhills 5 years ago (and I do mean little, 600 square feet living space total), I had a home inspection done prior to completing my purchase. Everything was working fine at this 1979 home, and the inspector could find no problems visually. So I went ahead and bought the home.

Two months later the garage door and its opener went bad and had to be replaced. That was a $1,000 cost that I had not expected, but I could not scream at anyone. On the sellers disclosure the owners had put down that they were unaware of any problems and the inspector had put the door through its paces with no problems evident. In other words, it opened and closed just as it was supposed to AT THAT POINT IN TIME. It is just a part of life that these things happen. You buy used car, you have your mechanic examine it and make your best guess as to its condition. Now, 5,000 miles down the road the transmission could go or the window may stop going up and down. But that is life. If you want guarantees you need to only buy new cars that come with manufacturers' warranties on them that will offer you some protection. Of course, you will pay more for a new car, but you will have to decide if that extra expense is worth it.

The same is true of homes. You can buy a new home what will likely come with a builders warranty, and warranties on the appliances, heating/cooling systems, plumbing work, etc. These will cover you for specific periods of time. Be sure you read over the material that you will be allowed to review so you know the terms of any warranties that could apply. Especially note any items that ARE NOT covered.

On a resale home, you normally get a Sellers Disclosure that you can review. On it the sellers tell you what they are aware of about the home. Note that is says "are aware of". If the owner is a little old lady from Pasadena, it is doubtful that she has crawled under the home or been up on the roof lately. Problems could exist that the owners do not know about! So these disclosures need to be backed-up with professional inspections. One to look at the home in general and another to check for wood-destroying organisms (mandatory in some states and with some lenders). These inspections can provide you with even more information about the home.

However, they give you only a snapshot in time and a visual one at that. Read your inspector's paperwork. It will likely remind you that the inspection is a visual one and will tell you about the home at that point in time. Most will not guarantee future performance. It could be that the washing machine runs through a cycle perfectly while the inspector is there. Yet 2 weeks later, one of the hoses springs a leak and needs to be replaced. The AC could cool well within industry standards, but when you start it next year a leak could have developed and you may have to spend $1,000 to remedy the situation. Then again, it could run perfectly for 10 more years. Remember, the inspectors do have limitations as to what they can do. I always point this out to buyers. The inspectors cannot rip up carpeting, pull down drywall, break down the heating system, or dismantle the refrigerator. They will test performance, and if something appears to be amiss, they will recommend that you have a serviceman or woman come to do a further examination of the appliance, for example.

I am writing this today since in the past two month I had two different buyers call me. One was unhappy because his AC unit had died after he had owned his home just a few months. When the home was inspected, the difference between the temperature of the air going into the unit and the air coming out of the unit met industry standards. The report even had pictures of the thermometer to prove this to the buyer. If the difference had been smaller, the inspector would have recommended that an air-conditioning company be called to examine the unit further since it was not performing well. The inspector's agreement with the buyer specifically stated that his inspection did not include dismantling the AC unit or pressure checks. The buyer was not very angry, but would rather not have had a problem. But these things do happen. Things break or stop working sometimes! The good news is that he will now have a new super-efficient unit and will likely get some rebates and tax credits that are available. Kind of softens the blow a bit.

My other buyer called last week to tell me that his dishwasher had flooded the kitchen. Luckily, he had negotiated a home warranty in his purchase offer. So the buyer paid for he warranty. My buyer told me he called the company, they sent someone out and for a basic service fee of $60, they are going to do whatever is necessary to solve the problem. He is very satisfied. However, recently we had some severe rains and he noticed that a skylight had begun to leak a bit. Unfortunately that is not covered by the warranty (check those terms carefully). But when the home was inspected before the sale, there was no staining, no peeling of pain, and no moistures showed up on the inspector's moisture meter. Again, just one of those things that can develop over time and there is usually no way to predict that.

If you like, you can purchase a home warranty that will cover resale home and they can give you some protection concerning some parts of the home. These warranties usually cost under $500, and can be purchased by the buyer or can be requested of the seller as a part of the purchase agreement. Before you buy one it is important that you read the material very carefully to see what is covered, and also what is NOT covered by the home warranty. Some of my buyers love them and others do not. I think if you have a problem after the sale, you tend to like them a little more. If you would like to review a sample of the home warranty program we use presently, you can download it by clicking on the following link: Download Home Warranty Brochure - May 2010

So, when looking for a home to buy, check out all of the possibilities, new homes and resales. Both have a lot to offer, and only you can determine which is the best way to go for you. Just keep in mind that nothing in this world is perfect and you need to do all you can to reasonably protect yourself and be a well-informed consumer.

If you have any questions concerning this topic, please feel free to contact me, John Elwell - REALTOR at CENTURY 21 Bill Nye Realty  Tel. 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com  You can also visit my main webpage at: www.jelwell.century21bnr.com

Be Careful When You First Start Appliances That Have Sat Idle for a Long Time

I got a call last evening from a buyer who had purchased a home through me two months ago. The residence had not been occupied for over a year when he bought it. The buyer did have a home inspection done, and everything seemed to check out okay. He also ask for, and received, a home warranty from the former owner.

Well, Friday he turned on the dishwasher for the first time to do a load of dirty plates. All went well until it came time to pump the water from the machine. At that point, water came out from under the dishwasher and covered the kitchen floor. Needless to say, they were surprised, and grabbed towels and mops to clean up the mess. Luckily, the home warranty company said they will take care of everything for just a small service fee, as per the contract.

That reminded me of when I bought my current home. I too had an inspection done, but when I bought it there was no washing machine in the home. When mine arrived, and I tried it out, I discovered that the drain in the wall was plugged and water came shooting back out. Lucky for me, I just jammed the hose in further and sealed around it with a towel. I then turned on the machine, and its pump was strong enough to blast the clog on into the city's sewer. If I had not been there my garage would have flooded for sure.

So, for those of you who are buying homes that have been unoccupied for a while or those who have vacation homes that you do not visit for several months each year, when you first start up the fridge, range, washer, dryer, dishwasher, heating/cooling systems, etc. it is a good idea to be there and keep an eye on them. When machines are not used over a long period, things can happen. Tubes can crack, wires can get chewed on by vermin, motors can beome frozen by corrosion, timers can go bad, etc. If you are there, you can take action to prevent damage to your home. However, if you start the dryer and then go out to dinner, when you come home you may find that a fire or some other problem has taken place. Suppose my friend at the top of this post had gone out after starting the dishwasher? The entire main floor of the home would have been drenched.

When you first move into a home, make sure that all of it parts and systems are working fine before you leave them on their own. Of course, machines can break at any time, but after a long period of non-use, it seems that problems are more likely to occur. Especially if the appliances have a few years on them. So play it on the safe side and babysit your range and washing machine for the first few uses. Better safe than sorry!

PS: And you may want to consider purchasing a home warranty if you buy another home. And certainly once you own the home, make sure you keep your major appliances and other items serviced regularly as per the manufacturer's recommendations.

If you have more questions on this topic, do not hesitate to contact me at John Elwell - REALTOR at CENTURY 21 Bill Nye Realty, Inc. Tel: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com

Ten Questions to Ask Home Inspectors in Zephyrhills and Pasco County, Florida

Before you make your final buying or selling decision, you should have the home inspected by a (certified and licensed) professional. An inspection can alert you to potential problems with a property and allow you to make an informed decision. Ask prospective home inspectors these questions:

1. Will your inspection meet recognized standards? Ask whether the inspection and the inspection report will meet all state requirements and comply with a well-recognized standard of practice and code of ethics, such as the one adopted by the American Society of Home Inspectors or the National Association of Home Inspectors. Customers can view each group’s standards of practice and code of ethics online at www.ashi.org . ASHI’s Web site also provides a database of state regulations.

2. Do you belong to a professional home inspector association? There are many state and national associations for home inspectors, including the two groups mentioned in No. 1. Unfortunately, some groups confer questionable credentials or certifications in return for nothing more than a fee. Insist on members of reputable, nonprofit trade organizations; request to see a membership ID.

3. How experienced are you? Ask how long inspectors have been in the profession and how many inspections they’ve completed. They should provide customer referrals on request. New inspectors also may be highly qualified, but they should describe their training and let you know whether they plan to work with a more experienced partner.

4. How do you keep your expertise up to date? Inspectors’ commitment to continuing education is a good measure of their professionalism and service. Advanced knowledge is especially important in cases in which a home is older or includes unique elements requiring additional or updated training.

5. Do you focus on residential inspections? Make sure the inspector has training and experience in the unique discipline of home inspection, which is very different from inspecting commercial buildings or a construction site. If your customers are buying a unique property, such as a historic home, they may want to ask whether the inspector has experience with that type of property in particular.

6. Will you offer to do repairs or improvements? Some state laws and trade associations allow the inspector to provide repair work on problems uncovered during the inspection. However, other states and associations forbid it as a conflict of interest. Contact your local ASHI chapter to learn about the rules in your state.

7. How long will the inspection take? On average, an inspector working alone inspects a typical single-family house in two to three hours; anything significantly less may not be thorough. If your customers are purchasing an especially large property, they may want to ask whether additional inspectors will be brought in.

8. What’s the cost? Costs can vary dramatically, depending on your region, the size and age of the house, and the scope of services. The national average for single-family homes is about $320, but customers with large homes can expect to pay more. Customers should be wary of deals that seem too good to be true.

9. What type of inspection report do you provide? Ask to see samples to determine whether you will understand the inspector's reporting style. Also, most inspectors provide their full report within 24 hours of the inspection.

10. Will I be able to attend the inspection? The answer should be yes. A home inspection is a valuable educational opportunity for the buyer. An inspector's refusal to let the buyer attend should raise a red flag.

 

Source:  The American Society of Home Inspectors at: www.ashi.org.

 

You can also contact me for more information on this topic at: 813-783-4444 or e-mail me at: jelwell1@tampabay.rr.com