First Time Buyers – What Professionals Should You Call On? Part 2
You will definitely need a team of professionals working with you throughout the buying process. In yesterday’s feature I spoke about the Real Estate Agent, The Lender/Mortgage Broker and the Lawyer.
Today I will address the 3 professional groups that you should consider when buying your home.
The Home Inspector
Your real estate agent should always ask you if you want a home inspection. Whether it is a new condominium, new home or resale, you should have an inspection. If you are buying resale and tearing it down, then this would be an instance not to have an inspection.
There is no mandatory certification and no legal requirements for home inspectors to take any courses or to have to pass any tests. Anyone can say they are a home inspector. Your inspector should be a member of a professional provincial or Industry Association in your area. There is a national standard of competency for home inspectors.
A home inspection is hands on and visual. you should take time off of work or book it on the weekend to be there. The Inspector’s role is to inform you about the property’s condition. you will be told if something is not functioning properly, needs to be changed, upgraded or is unsafe. You will be informed of repairs that MUST be repaired now and repairs that SHOULD BE repaired in the future. The report will also give approximate costs for each item listed.
Every inspection should include a visual assessment of the following:
Roof and exterior walls-including the chimney
Attic and insulation
Electrical systems and size of the electrical panel
Heating and A/C Systems
Ceilings, walls, floors
Moisture in the basement and evidence of previous flooding or current leaks
Septic tanks, wells, sewer lines (if inspector is qualified)
Any detached buildings (garage)
The lot, drainage away from the building, slopes and natural vegetation.
Overall opinion of structural integrity of the buildings
Common areas (in case of a condominium)
Termites and carpenter ants might need a specialist
Fees vary according to the size and condition of the home. Use a home inspection checklist. and review your report carefully before you sign your waiver firming up your Offer/Contract.
The Insurance Broker
Lenders insist on property insurance and quite often mortgage life insurance. Property insurance covers the replacement cost of your home and is their security on their loan. Do not confuse property insurance with contents insurance. Premiums will vary on the size and replacement cost. Life insurance provides coverage for the family if you die before the mortgage is paid off.
Compare different insurance companies and make sure that you compare item for item You will want to questions hurricane, flooding and natural causes damages. Check around to see who gives you a hassle with claims and settlements and who are easy to deal with. Loss of property is stressful enough, having a hassle with your insuring company is not something you want. The people in new Orleans are still trying to get their claims settled.
Home buyers do not usually hire an independent appraiser. The lending institutions hire the appraisers and sometimes charge it back to you, about $300.00. his is something you can negotiate.
The appraisal is an unbiased assessment of the physical and functional characteristics of the property. An analysis of comparable sales and current market conditions affect the appraisal as well.
If the appraisal comes in lower than what you have agreed to pay, you will have to come up with the difference between what the bank will loan you and the deposit. That is one reason it is important to have a conditional offer in this current market. You might be able to renegotiate your offer.