AmyBSells Team - Cincinnati Real Estate Blog

Amy January 15th, 2008

As a responsible Realtor, and Accredited Buyers Representative (trained and experienced in hundreds of purchases) it is absolutely necessary for buyers to conduct a whole house inspection before purchasing a home. I have compiled a selection of frequently asked questions that my clients have and my commentary on each.

Having your future home and your largest investment inspected by a licensed inspector is an absolute must! As an Accredited Buyers Representative, I require all of my buyers to get a home inspection. The home inspection simply allows you to pay an independent inspector to inform you about the properties status or condition. Perhaps there are some maintenance items, or some mis-wired electrical outlets, or maybe the house needs a new roof, or the furnace is dead. You as the buyer need to know the condition of the property to move on to the next stage in the purchase. For your benefit, a whole house inspection is an essential part of the purchase of a home. This is so much the case, that if you decide not to inspect your largest investment, you must sign a waiver stating that I recommended this service and you denied the opportunity. That really says something!

Since the buyer wants to know the condition of the property he is buying, it is he who pays for his information/inspection. Inspections can run between 250 (small condo) to more than $500. I have seen the average around $350. They typically charge based on the sale price or size of the home. Not a bad price to pay considering you are about to make the single largest investment of your life to the tune of several hundred thousand dollars.

In my experience of working with some great inspectors, and as an ABR, I would suggest nothing less than a whole house inspection, and a termite inspection. The inspector will look at every system and component in the house, and do a termite inspection. The whole house inspector knows many things about typical issues, and many about complex issues. Every once in a while, the inspector will find a crack in the foundation that looks out of the norm, or some gross buckling in the roofing and suggest some ancillary inspections. For the foundation, we would call on a structural engineer, or the roof, a roofing contractor. But for the general inspection, the whole house inspector can evaluate the home 99% of the time and that will be all that is necessary. So, to start, choose a whole house inspection and a termite.

Termite inspections can be a requirement of the lender (depending on your loan), and thus a normal part of the process. In addition treatment for termites is around or under $1,000, so worth a $55 inspection in the event they are in the house we can ask the seller to have it treated. More on Termites and their treatments in another article.

Ancillary inspections like mold, radon or structural are all added expenses, increasing your costs $500, $120 and $400+ respectively and take between 3-20 days to complete. These are items that may be recommended by your inspector or Realtor based on evidence that they should be done. Visible mold on the walls, bowing in the walls of the basement, large cracks in the floors of the basement all lead to suggestion of ancillary inspections. If you are working with me, Amy Broghamer, my experience touring homes and other sales give me a solid back ground to help you identify any major issues while we are initially touring the home. I can spot potential major issues that may help reduce the chance that you will buy a house that will have a lot of inspection items noted. I can show you what to look for and when to know you have a great home that is worth making an offer on!

This question is simple. Ask Me! I work with very talented and knowledgeable inspectors. I work through more than 30 inspections a year, and know who is better than others, and who is going to be the most knowledgeable for your home. I recommend and use Kentucky inspectors for many reasons. Kentucky inspectors are LICENSED, which means they must keep their licenses current with continuing education, and follow a code of ethics set forth by the American Society of Home Inspectors. Using an ASHI inspector shows the seller that you have an inspector who knows what they are talking about and they have been trained.

See the Inspectors Code of Ethics here.

With so many new issues with homes it is good to know that your inspector has been in continuing education this year, and knows the latest on building trends and other inspection related issues. In the state of Ohio, there is no licensing requirement or continuing education required. I could decide to be in inspector tomorrow and inspect your home, without having training or knowledge of building codes and other inspection related skills. This is why I prefer to refer a few KY licensed inspectors to inspect your property. They work in Ohio about 50% or more of the time. The inspectors I recommend do more than 500 inspections in a year, which means they know what they are looking at, and have likely seen it before. With my referral, the will usually work you into the schedule faster and are often more in depth. They can suggest ways to fix issues and roughly estimate costs to do so.

I always recommend a good referral before you select an inspector. I have seen some poor inspections completed, and I know who is good! Also something to consider, if you call for an inspection and they are available that day or the next, why is no one else booking them? This is your largest investment, get a great inspector!

Since we are on the topic of great inspectors, check out AA Home Inspections website. Here they have an example report, with comments, photos with arrows and circles pointing to trouble areas, and you can see where everything gets inspected.

Having a thorough report with photos like this one, allows for better negotiation for you. Imagine if there were an issue with some flashing in the roof, causing leaking in the attic. The inspector would have photos of the roof and photos of water intrusion in the attic, with wet insulation proving with photos to the seller that this is a real issue that needs to be repaired by them ASAP. These photos and the professional report by a licensed professional give the issues more serious credibility and works to your advantage when remedying an issue that could cause you problems when you move in.

NOTE: Not all whole house inspectors take photos or include them in a report. The report is key, and it looking professional provides credibility to all parties involved.

With each inspector, you will find they have an agreement that you will sign. Here is a link to that agreement for AA Home Inspection.

http://www.aahomeinspection.net/Ohio_Indiana.pdf

In short, this document says that during this inspection process, we do the very best we can to completely inspect this property inside and out. We are limited to what we can see and get to inside the home and outside. They do the very best they can to give you the best idea of the condition of the property. There may be something that is not found during the inspection and later discovered after you move in. It is almost impossible to know every single intricacy of the house. All inspectors will have similar agreements.

During the inspection you are encouraged to be in attendance. The inspector will point out to you the things he has found in the home that need some attention, or he will teach you how to use a particular appliance or which way to turn the water on and off. As an ABR, I think it is important for me to attend your inspection as well. I will stop in towards the end to get the summary of any issues. This allows me to see and understand the things found so that I can effectively communicate and then show if necessary the listing agent the issues so that we can see eye to eye and get the issues resolved for you. You may also save some time by attending at the end for the summary tour as well. Inspections typically take around 3 hours, some longer, some shorter depending on the size of house. If you would like to do a virtual inspection, click here to see how things work at an inspection, and what inspectors look for in different areas of a home.

compliments of the AA Home Inspection website.

A home inspection is an in-depth visual examination of the physical structure and systems of a home. It is not an appraisal that tells you what the home is worth or a code compliance audit. If you are thinking of buying a home, condo, townhouse, or duplex, you should have it properly inspected before final purchase by an experienced and impartial inspector.

Why do I need a home inspection?

Purchasing a home will probably be the single largest investment you will ever make. You should know exactly what to expect, inside and out, in terms of repairs and maintenance. A fresh coat of paint could be hiding serious structural problems. Water marks on the ceiling, roof decking, or floor joists may indicate a chronic leakage problem or simply the result of a single incident. The home inspector interprets these and other clues, and then presents a professional and impartial opinion as to the condition of the property before you buy, so you can avoid any unpleasant surprises after the sale. Of course, a good home inspection will also point out any positive aspects of a home, such as: a new roof, new siding, and professionally installed pool or spa, to name a few.

Can I do a home inspection myself or have my friend help me?

Even the most knowledgeable home buyer or home owner lacks the expertise of a professional home inspector who has inspected hundreds or even thousands of homes in their career. An inspector is equally familiar with all the elements of home construction and the proper installation, maintenance, and interrelationship of these elements. Plus, most buyers find it hard to stay completely objective and unemotional about the home they are considering, possibly leading to a poor assessment. Even trained craftsmen, know that professionally inspecting a home is no simple task. Many wouldn’t consider doing an inspection for themselves, or even having one of their own employees do it for them, why should you?

No. A professional home inspection is simply an examination into the current condition of the prospective home. It is not an appraisal or a municipal code inspection. A home inspector will not pass or fail a house but rather, we describe its condition at that time and indicate which items will be in need of repair or replacement. This is when you call upon ME to help you appropriately negotiate repairs, price reductions or other consessions to make the results of the inspection worth it!

If the report is favorable, did I really need an inspection?

Definitely! Now you can have peace of mind in completing your home purchase, knowing the condition of the property and all its equipment and systems. You may have also learned a few things from the inspection and will want that for future reference.

AA Home Inspections answers this question as follows: We welcome you to read more out about our services, and then compare us to the competition. We’re sure that you will find that we are the best in the business; well-educated, professional, sincere, unbiased, fair, and thorough. Our inspections are a complete service, with no hidden charges. Our report format is easy to understand, easier to read (digital printout, no handwriting to decipher), and we include images with every report. We are not satisfied unless you’re satisfied, it’s that simple AND that’s our guarantee. All of these factors separate us from our competition, and continue to make us the preferred choice for home inspections!

• Buyers , Inspections , Listing
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Amy September 6th, 2007

Depending on the price range of buyer that I work, with, I almost always get the question during our hunting,  “What about Foreclosures?”

Usually in the price ranges below 200K, we see a large amount of bank owned properties in foreclosure or accepting a short sale (when the bank will take less for the property than what they have lent out on it). Foreclosures are perfect for certain people but I will stand behind the statement that they are not a good idea for first time buyers, or for people who intend to use the home for their primary residence. That being said, there are a small amount of buyers out there that do have success in this foreclosure market.

Ohio has lead the country in foreclosed properties for several years. This shows us that at one point, banks in this area were more liberal in lending monies to people who were getting 100% loans, who perhaps should not have purchased a home at the height of their price point, and thus, have failed to make payments on time, defaulting on their loans and the bank taking the house back from them. I have toured a foreclosed property after the people living there were evicted, and I can assure you they were not happy they were kicked out. So much so that you sometimes don’t want to enter due to stench or filth. Many times, they are in the process of trashing the house, to get back at the bank, and you don’t want to buy that house for your family.

Typically if the owners could not make their mortgage payments, they might not have also been taking care of the general maintenance of the house. Almost always, you find that the house has been neglected due to lack of money to care for it. Sometimes it is small things like lawn care, but sometimes, it is a leaky sink, that leaks for months, causing the cabinet to rot out, and leak into the drywall of the floor below, now having concern for mold problems, drywall needing to be replaced etc.

In a foreclosure, since the people weren’t paying their mortgage payments, there may have been other bills or repairs that have not paid either. When creditors are not paid by their customer, they can put a lien on the real estate they own. This lien will have to be paid before you the buyer can purchase the real estate. So, if you buy a foreclosure you may also be responsible to pay off several thousand dollars in liens for the previous owner, before you can title the property in your name. There are methods of negotiating with lien holders for a reduced payoff, but you will always pay more than half of their lien debt prior to closing on the home. Investors are used to this type of situation and they pay the liens with cash and move on with their purchase.

Inspections are KEY in homes like these, if you intend to put your family into them. Remember, if this is the largest purchase you will make, then you must do your due diligence and have an inspection, to protect your families interests. The problem with inspections is that in the process of negotiating with the bank, they will rarely give you the time you need to get an inspection to know what you are buying. Nor do they ever agree to repair or replace anything that was not maintained or broken by the previous owners. They take a completely hands off approach with regards to inspections and repairs. Most will just sell the property as is and not even look at the results of an inspection. This will take the wind out of your sails if you were hoping to have a smooth and pleasant home buying experience. A foreclosure property will often have several other buyers or “investors� interested in this same property, who have cash and will buy the house with no inspections.

These investors have the upper hand, as they have cash to purchase the property, which allows them to close on the house in a week’s time. If you are getting a loan, then that process is likely to take 30 days to complete. The banks will take less for the home, if they can sell to a cash buyer with no inspections. And they do, almost every time.

When we have a short sale situation, and you want to put in an offer on a house, you go through a long waiting period. The house goes on the market, you write an offer and submit it, (some times, the bank requires a larger than normal earnest money or down payment that most buyers in this price range do not have) and depending on the bank, it takes 14-45 days to get a response from the back as to if they will take your offer or not or if they will begin to make a counter offer. In the meantime, cash offers will come in and will go to the top of the stack of offers at the bank in those 14-45 days. If you severely under bid for the house, then someone can outbid you during these 14-45 days. All while this is going on, you are prohibited from writing an offer on another property while you have an offer in on this one. You will have no idea when you will get a response or what that response will be. So, you might have just wasted 45 days, and missed finding that house that is perfect for your family and you could have already moved in by now. This method of buying a home may save you some money, or it may end up costing you more money in unknown defects and their repairs and frustration in the end.

In some states in the US, you can get all the way through this process and actually close on the house, and the original owner can come up with their deficient monies and get the house back! That means you lose the property you have been working for months to obtain, just because the previous owners raised the money necessary to take back their home. When this happens, you loose considerable amounts of money, especially if you have already begun to renovate the home, now for the old owners!

Foreclosures are a great idea when you have about 100K in cash to invest in a piece of real estate. These types of investments are still risky if you don’t have an inspection, and know what you are buying. Foreclosures are great if you have time to repair and discover the inadequacies of the home, they are not generally move in condition. If you are a handy man or are very knowledgeable about the construction and or renovation process foreclosures are great. If you have investors along side you in the property, it reduces your risk, and most investors team up or have a few partners to reduce risk. Foreclosures carry a lot of risk, and if you can bite through the risk, there is sometimes a large reward, other times, it is a break even or when more problems than expected come up, they are upside down in the investment. To me, foreclosures are best for investors, not families. If you are still interested in purchasing a foreclosure property, I can recommend you to a Realtor that focuses his business in the foreclosure market.

If you want to be excited and have a great experience finding your dream home, I don’t recommend going the foreclosure route. I can promise you will have a wonderful experience buying a home the traditional route that 99% of people take when purchasing their primary residence with me! I hope I am your #1 choice to represent you as your Residential Realtor!

• Buyers , Foreclosures , Inspections
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Amy August 12th, 2007

Attention: For Sale By Owners! Why People Are Afraid To Buy From You!

Many homeowners believe to maximize their home sale they should sell it themselves. At first glance, they feel selling a home is simple. Why should they pay a broker fee for something they could do themselves? In fact, 12% of all the homes sold last year were sold For Sale By Owner (FSBO).

However, close to half of the FSBO’s said that they would hire a professional next time they sold. Thirty percent said they were unhappy with the results they achieved by choosing FSBO. Why?

Many FSBO’s told us the time, paperwork and everyday responsibilities involved were not worth the amount of money they saved in commissions. For others, the financial savings were even more disappointing. By the time they figured the fees paid to consultants, inspectors, appraisers, title lawyers, escrow and loan officers, marketing, advertising, they would have been better off to have paid the broker’s fee that would have included many of these charges.

Selling a home requires an intimate understanding of the real estate market. If the property is priced too high, it will sit and develop a reputation for being a problem property. If the property is priced too low, you will cost yourself serious money. Some FSBO’s discovered that they lost money as a result of poor marketing decisions. In the final outcome, this far outweighed the commission they would have paid.

Before you decide to sell FSBO, consider these questions and weigh the consequences of assuming the responsibility versus employing a professional. A little time spent investigating now could pay off tenfold in the end.

Questions To Consider

Do I have the time, energy, know how, and ability to devote a full forced effort to sell my home?

One of the keys to selling your home effectively and profitably is complete accessibility. Many homes sit on the market much longer than necessary because the owner isn’t available to show the property or return phone calls within 3 hours. Realize that a certain amount of time each day is necessary to sell your home.

Am I prepared to deal with an onslaught of buyers who perceive FSBO’s as targets for “low ballingâ€??

Another challenge of selling a home is screening unqualified prospects and dealing with “low-ballers.� It often goes unnoticed that much time, effort and expertise is required to spot these people quickly. Settling for a “low ball� bid is usually worse than paying broker commissions. In addition, buyers looking for FSBO’s want to share in your savings, so they will often offer much less to share in the savings you are getting as a result of not paying a commission.

Am I offering financing options to the buyer? Am I prepared to answer questions about financing?

One of the keys to selling, whether it’s a home, a car… anything, is to have all the necessary information the prospective buyer needs and to offer them options. Think about the last time you purchased something of value, did you make a decision before you had “all your ducks in a rowâ€?? By offering financing options, you give the home buyer the ability to work on their terms. You’ll open up the possibility of selling your home quicker and more profitably. A professional real estate agent will have a complete team for you to profit from… lenders… title reps… inspection companies… they’ll be completely at your disposal.

Do I fully understand the legal ramifications and all the necessary steps required in selling a home?

Many home sales have been lost due to incomplete paperwork, lack of inspections or not meeting your state’s disclosure laws. Are you completely informed of all the steps necessary to sell real estate? If not, you may want to consider consulting with a professional.

Am I capable of handling the legal contracts, agreements and any disputes with buyers before or after the offer is presented?

Ask yourself: “Am I well-versed in legalese? Am I prepared to handle disputes with buyers?� To avoid any disputes, it is wise to put all negotiations and agreements in writing. Many home sales have been lost due to misinterpretation of what was negotiated.

Have I contacted the necessary professionals… title, inspector (home and pest), attorney, and escrow company?

Are you familiar with top inspectors and escrow companies? Don’t randomly select inspectors, attorneys, and title reps. Like any profession, there are inadequate individuals who will slow, delay and possibly even cost you the transaction. Be careful!

My hope with this report has been to educate you and help you avoid the pitfalls many FSBO’s go through. I hope you found the idea’s valuable and if there is ever any way I can be of service to you or anyone you care about, please contact me Amy Broghamer at 513-377-3637.

• Buyers , Closing , Closing Documents , FSBO , Inspections , Listing , Pre-Approval , Pricing , Real Estate Law
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Mike August 2nd, 2007

This has been a crazy summer with so many sales, and so many inspections, I thought an article on water heaters might come in handy. My most knowledgeable inspector Mike Patton has shed some light on some common issues with water heaters, and expansion tanks. A condo I had for sale this summer had the smelly water issue, and it was simply remedied with a new water heater, and the smell was gone. I hope this helps anyone with water heater questions or issues. Mikes thoughts are below…
Several customers have asked about water heaters, problems, and concerns associated with them. Keep in mind that I am a Licensed Home Inspector and not a licensed plumber or code enforcement agent so I will answer to the best of my knowledge and the general findings form researching these items. The one comment is that code enforcement various form location to location. As a general statement, most of the components discussed are available to the general homeowner, but I will caution you to have a licensed plumber perform work or replacement of a water heater.

In general, water heaters appear to last approximately thirteen years in the Greater Cincinnati area. This may be reduced if the system uses a private water source such as a well. Gas water heaters also seem to last a little longer than an electric unit.

The general anatomy of a water heater is the heating source, gas burner or electric elements, tank, cold water shut off valve, drain valve, temperature and pressure relief valve (T&P), sacrificial anode, thermostat, flue (if gas) and expansion tank.

The most common problem encountered with existing water heaters is a leaky T&P valve; these valves are to prevent excessive pressure or temperature within the tank. In the event the pressure and or temperature exceed the design rating, the T&P valve opens automatically. The valve will not close automatically, in this case, water continues to run out of the tank, and flooding can occur. Due to this valve, automatically opening and discharging hot water these valves are to have a discharge pipe that extends to within 6� of the floor. These discharge pipes can also feed into a drain.

Another common problem with existing water heater is strong odors emitted when the water is run. This is commonly where the sacrificial anode comes into play. The anode is commonly made of magnesium and or aluminum, zinc and other combinations or specific metals. The anode when deteriorated (the anode has to be removed to inspect the condition) no longer attracts corrosive elements and the water will begin to have anode or. Replacement of the anode is sometimes an easy process verse in some units it is part of the hot water discharge pipe (plastic lined tanks).

In homes that have been vacant for a period of time and the water has not been circulated through the hot water tank an odor may be present that is caused by bacteria. In this case, the age of the water tank is not a factor, this may happen in an old tank or one less than a year old. Different resources suggest using chlorine bleach or peroxide to eliminate this bacteria and the associated odor. Different resources describe how to introduce the peroxide into the system to accomplish this, most agree that using the peroxide is much safer than using chlorine bleach. A link that describes this process quite well is http://www.smellywater.com/

Expansion tanks are the small tanks located on the cold water supply commonly near the water heater, these tanks appear to be similar to a small propane tank used for a gas grill. When a backflow device is present either within the home or at the meter a closed loop system is present and an expansion tank is needed. Without an expansion tank the in a closed loop system the T&P valve will commonly leak, water faucets drip, water hammering and other items fail more quickly. Water expands when it is heated, as an example water heated in a 40-gallon water tank from 90 degrees F to 140 degrees F the water will expand nearly one-half gallon. The tank is intended to absorb the expansion created when the water is heated. In older systems where a backflow device is not present an expansion tank is not needed due to the pressure is absorbed by the main water supply, the exception to this is if the pressure is above 85 PSF. It is considered good practice to install a water expansion tank when installing a new water heater, most of the local municipal water systems are now using meters with back flow prevention, and these are primarily to protect the quality of the municipal water supply.

As a safety note, I recommend inspecting your gas water heaters flue on a regular bases, if the flue has rust or pinholes it should be replaced immediately. Poor venting is often identified by excessive deposits of white material found near the bonnet or below a bad joint in the flue. If you suspect poor venting, I recommend having a licensed plumber or heating and cooling contractor inspect further and determine if a repair is needed or even if the flue is currently blocked. Keep in mind a poorly vented gas appliance is a carbon monoxide hazard and can be deadly.

In closing, I recommend that if you are installing a new water heater have it inspected by the local code enforcement agency, this will commonly cost you less than $50 and is an excellent safety measure. In the Cincinnati area and Northern KY, code enforcement agents state that all water heaters installed are to be inspected regardless of if a contractor or a homeowner installs it. As always, I recommend that for specific technical questions or concerns associated with plumbing systems that you contact a licensed plumber.

Michael Patton is a Licensed Home Inspector and the owner operator of AA Home Inspection LLC located in Northern Kentucky. Michael is licensed in Kentucky and Indiana and qualified to perform inspections in Ohio (Ohio does not have a licensing requirement). Michael is the current President of the Kentucky Real Estate Inspectors Association Inc. (KREIA) and an active member of the American Society of Home Inspectors (ASHI). Michael started AA Home Inspection LLC in 2001, prior to this Michael had worked for firms providing a wide range of services including design, construction, and project management. Michael’s services include Residential Home Inspections, Light Commercial Inspections, WDI/Termite Inspections, and Radon Testing. The Greater Cincinnati area provides a wide variety of inspections; from the million dollar properties to the fixer upper homes, new construction to homes well over one hundred years old and clients from the well established to the first time homebuyers.

www.AAHomeInspection.net

• Buyers , Inspections , Sellers
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