5 things homebuyers may regret later
June Buying Advice: In the excitement of finding a home to purchase, buyers may neglect details that could come back to haunt them.
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So, you've found a house you like, come up with a down payment and gotten preapproved. What could possibly go wrong? Plenty, if you and your agent rush through the deal without doing all the homework.
In this installment of Buying Advice, we'll look at the little tasks or details that buyers may neglect that could come back to haunt them. We'll also check in with the latest housing statistics and answer a question about who pays for what in a short-sale transaction. (Bing: What is a short sale?)
Buying without regret
Buying a house is like getting into a marriage: You must make sure there aren't any problems you might have missed during the courtship. After all, you might have to live with your mistakes for a long time. Just ask buyers who purchased six or seven years ago.
To help MSN Real Estate's readers buy without regret, we asked a number of experts to give us their list of mistakes that buyers make in the rush to close on that house of their dreams.
Here are some of them:
1. They ignore the maintenance and repair costs.
"When people see a house they really like, they don't see all of the bumps and bruises the first time they look at it," says Cara Ameer, with Coldwell Banker Vanguard Realty in Ponte Vedra Beach, Fla.
They might disregard the ancient heating and cooling system or not factor in adequately the cost of running or replacing it. Ditto for that awful plumbing system or roof. If a roof is more than 10 years old, Ameer says, a replacement should be accounted for in your bid.
"You might find yourself paying more than you should."
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2. They blow off secondary inspections.
After the general home inspection, many rushed buyers blow past other recommended once-overs, such as checking out the pool for leaks and electrical problems or getting that tiled roof looked at by a contractor. These oversights could pose a terrible problem later when an owner has to spend money on repairs rather than on new furniture.
"I have one client that found it will cost $10,000 to repair the leaks on a [tiled] roof," Ameer says.
What are some other expensive problems that buyers didn't address to save money or time?
Niels Brownlow of Coldwell Banker Seal in Portland, Ore., would add sewer problems to the list. He recommends his buyers get sewers scoped out for any root intrusions or broken lines, which can cost a mint to fix. If you're buying a house with a heating oil tank, it's also wise to do a separate inspection for leaks around it, he says.
"Remediation can be very expensive if those tanks are leaking," he says.
3. They don't do enough research on the condo project they are buying into.
Often, Brownlow says, people scrutinize the unit but neglect to fully inspect its homeowners association documents and the building's insurance coverage or to do a check for pending litigation.
"Read all of the condo documents, such as the financials, covenants, conditions and restrictions (CC&Rs), HOA board-meeting minutes, etc.," Brownlow says. "Ask questions if you do not understand."
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You want to make sure that the project has enough money to pay for needed repairs and emergencies, that there aren't any structural defects and that the HOA isn't planning to sock you with any huge assessments. You'll also need to know if they will accept your charming, 60-pound Australian cattle dog.
4. They don't check out the neighborhood.
Finding the perfect house is wonderful, but if your neighbors are disrespectful or the local amenities are sparse, you might get buyer's remorse.
Get the lowdown by knocking on doors around the house. Tell neighbors that you're interested in purchasing there and would like to know more about the neighborhood. You can ask:
- What do they like about it?
- Have there been any recent problems with crime?
- Have there been any big disputes between neighbors? How were they resolved?
- Do the neighbors around the house have pets?
You don't want to have a serious barking-dog problem on your hands or any other contentious situations.
You would be surprised at how much people will tell a complete stranger, says Ilona Bray, editor and co-author of Nolo's Essential Guide to Buying Your First Home. Sometimes, she says, just a bad attitude or hostility from that next-door neighbor may give you pause about buying.
Don't forget to check out the local restaurants, grocery stores, parks and service establishments before you commit to a house.
"See what you think," Ameer says. This is where you will be spending a large part of your time. It had better be a good fit, she says.
5. They don't calculate the commute.
Sure, that neighborhood is quiet and kid-friendly, but how long will it take to get back there from the downtown where you work?
Avoid road rage. Make sure you know what to expect on your drive home.
"Drive the commute to your office during peak traffic time so that you know how much time it will take to get to your job and to get home," Brownlow says.
Housing market update: Sales and prices rise. Has inventory bottomed out?
Existing-home sales inched up a paltry 0.6% to 4.97 million in April from 4.94 million in March, as buyers struggled to find homes from a limited pool of inventory in many markets.
- On our blog, 'Listed': Inventory shortage curtails home sales
This resale activity was up 9.7% from the 4.53 million pace set in April of last year, according to National Association of Realtors data. But that figure could be higher, argues Lawrence Yun, the NAR's chief economist. "Buyer traffic is 31% stronger than a year ago, but sales are running only about 10% higher," he says.
Still, existing-home sales are at the highest pace since November 2009, when the homebuyer tax credit sparked sales.
Inventory ticked up 11.9% from March to April, with 2.16 million homes for sale — a 5.2-month supply at the current sales pace — as more sellers put homes on the market in time for the peak selling season. Still, listed inventory is 13.6% below April 2012, when there was a 6.6-month supply.
One of the most important things you need to do before purchasing a house has nothing to do with the construction: you need to talk to the neighbors and get a feel for what they are like. If they throw a bad vibe your way I would seriously consider walking away.
My best friend and I coincidentally bought houses within 6 months of each other (we live about 500 miles apart). He did his research, and he's better off for it. He bought a house that was not his first choice SPECIFICALLY because he liked the people who lived around the house. They were mostly his age, and he is now enjoying the benefits of it. He regularly golfs with his neighbors, they have a system where they help each other out moving stuff, they BBQ together etc. He's even golfed at Pebble Beach with a neighbor!
I wasn't so diligent, and my neighbors consist of a nasty ex-cop who seems to hate the world, an unfortunately ill lady in her 50's whom I rarely see, a never ending parade of college kids who rent the house across the street, and a nasty young couple who doesn't want to have anything to do with me for some reason. I like my house, but I'm not getting the full benefits of home ownership. There is no social connection, and I don't believe there will be any time soon.
This is a truly eye-opening and extremely helpful article for anyone considering the purchase of a home. As a Laguna Beach real estate agent, I recommend that buyers also have enough pennies in their piggy banks to cover moving and closing costs. The latter expense equals about 1% of the purchase price. Have these funds in place before you marry and move into your love nest. This will minimize post-marital money woes and the costly counseling sessions needed to deal with the issue.
wow, I'm in the market to buy my first house. how much does an inspection cost?
and if the house needs major repair...how do I ask for (and who pays for) the work...
if it's found by me (pre-purchase) or during the inspection? thanks and ANY other advice is very much appreciated.
1. A homebuyer should always hire a home inspector even for new homes. County inspectors are not very highly paid or as highly skilled as Licensed Home Inspectors. Sometime it's very hard to get builders to come back to do warranty work.
2. Always hire your own Appraiser in addition to the lender's Appraiser and especially if your lender doesn't require one. A few hundred now could save you from making a mistake you will have a hard time recovering from. Some Home Mortgage programs such as some of FANNIE MAE's Home Path plans don't require an Appraisal. FANNIE MAE just had the highest profit quarter they have ever had in their history. Makes one wonder why, doesn't it. Home prices have increased 12.5% in the last year and plans like Home Path that don't require an Appraisal have something to do with that. With all the past spike prices, buyers have lost touch with current home values. It's like getting used to paying $4.00 a gallon for gas and when the prices go to $3.50 a gallon you feel like you're almost stealing it but maybe it should have gone to $2.50. The same thing is happening in home prices. I've seen Foreclosure Appraisals come in with a Fair Market Value for one value and find that later they closed for as much as 30% or $30,000 to $50,000 more than the Appraisal. These buyers are that much underwater at closing and may not find out until they try to refinance or sell. The person that may be in most trouble is the Appraiser who gets the higher value. There are some good values out there but all are not. Now more than ever, it's buyer beware.
Broker since 1976 (retired)
Certified Residential Appraiser since 1983 (retired)
I do masonry restoration. Check around the gutter downspouts & the chimney for deterioration. The most common enemy to masonry is when it gets soaked with water and then freezes. It does the same thing to masonry as it does to a car engine that has no antifreeze in the radiator. The key is for water to run AWAY from the house. Also, if I wanted to destroy ANYTHING on my house ten times faster than normal, I'd apply Thompson's Water Sealer. It traps moisture in so it can never dry out. For masonry, use a product made of siloxane. Do your research. Once you put it on--you can't take it off.
Number 4 is a hoot. Where can you go these day to get away from neighbors with barking lawn ornaments? If they don't have one (two, three, four or more) they'll get some. Until we start having DOG free neighborhoods, which are DESPERATELY needed, I don't see any solution. Laws in most communities are exceedingly lax. Many dog owners are creeps and bullies; they don't care if they keep the whole neighborhood awake or they get off on making everyone miserable. And all it takes is ONE loudmouthed dog to wreck it for everyone else. Show me a neighborhood that doesn't sound like a kennel and has the stink of un-picked up dog feces wafting through the air. Please. And don't even get me started with the imbiciles who have their fanged missile out front UN-leashed.
Check with local city utility companies for water, sewer and garbage bills against the property, as a new owner you may be stuck with what the old owner didnt pay. Some cities wont lien the property and a title search will not show any unliened bills.
This is per own my experience, thank you city of Warrenton Oregon for the education when I got a door hanger a couple of days after moving in my pride and joy new (to me) home. And to the less than understanding person who said par it or else.
Thought I would pass this one on.
The shingles for a big house cost about 2- 3 K, and spend about 2K to have it installed, any more, and someone is getting ripped off.--And those last 25 year, no one in the entire country changes shingles in 10 years.
Inspections are good, as long as it is done by someone who has nothing to do with any maintenance on this property past and future, get someone from far away, so you get a real inspection instead of the 90 % local, who will get a "friend" involved with all the work later.--Especially those mold areas (entire country)--Huge rip offs and scare tactics on that issue, all homes and buildings have mold, comes with the wood and other building materials, so you are in trouble right away, if you have a crocket contractor inspection.(most of the time)--And they work with/for the banks as well!