Every homebuyer’s biggest fear is buying a lemon. A few minor issues are normal when buying a home, but if major problems aren’t noticed until after the sale is closed, homebuyers are on the hook for thousands of dollars in repairs—thousands of dollars they probably don’t have. If you’re in the market for a home, learn how to avoid overpaying or buying a money pit. These tips from Windermere Real Estate can help you get started.
Know What You Can Afford
Before you jump into searching for a new home, you should have a considerable grasp on what you can afford in a monthly mortgage payment. Assess your budget, accounting for additional costs like maintenance and emergencies, to get a rough idea of how much you can comfortably pay. Next, survey the various loans available to you. From FHA to VA to conventional and more, there are quite a few options. Once you find an ideal fit, shop around for lenders, and work on getting preapproved.
There are some loans available that do not require a down payment. If you decide that will not work for you either, you can always look for apartments near Seattle which will allow you to save for your down payment while living in the area. With nearly 5,000 apartments available, you’re sure to find one that suits your needs.
Understanding the True Value of a Home
To avoid overpaying, buyers need to understand the true value of a home they’re interested in. A home’s market value is affected by its size, location, condition, and the current market, meaning it’s a number that’s constantly in flux. The best way to assess the market value of a home is through comparative market analysis. Online tools are handy and will give you a rough idea, but they are not privy to the condition of the house. Instead, ask your trusted Real Estate agent to do a market analysis prior to making an offer on a house you are interested in. That is one of the many reasons to work with a professional.
Why Home Inspections Are a Must
The estimated value of a home is based on the assumption that it’s in good condition. However, problems hidden within could make a home worth much less than its list price. That’s why home inspections are so important. Without an inspection, there’s no way to know if the home you’re buying is move-in ready or needs costly repairs.
Home Inspections and As-Is Homes
Home inspections get complicated when it comes to as-is homes. While some as-is sellers allow inspections, most only permit informational inspections after a purchase agreement is signed. In some cases, as-is only refers to specific features of the home and not the property as a whole. If considering an as-is property, buyers need to understand exactly what’s meant by as-is and be ready to walk away if a seller won’t permit an inspection contingency.
What About Seller Disclosure Requirements?
It’s true that many states require sellers to disclose known issues with a property, but that doesn’t mean buyers should put total faith in a seller’s honesty. Additionally, some states only require a few seller disclosures, such as lead-based paint and septic systems. Sellers only have to disclose other material defects if asked.
Negotiating an Offer: Repair Options for Buyers
When a home inspection turns up significant repair and maintenance concerns, buyers have two options: walk away, or negotiate. If a home has foundation problems, water damage, major plumbing and electrical issues, or termites, it’s usually better to walk away. These problems are expensive to fix—if they can be fixed at all.
Other repairs can be negotiated in the offer. For example, if an inspection reveals structural defects, building code violations, or other major problems that affect financing, sellers are generally expected to pay for repairs. Other repairs fall in a gray area. While little problems generally aren’t worth quibbling over, buyers may want to ask sellers to cover reasonable repairs like electrical panels, roofing, drainage, and HVAC problems.
If a seller agrees to pay for repairs, buyers must decide if they want the seller to complete them too. While having repairs done before move-in is convenient, many buyers prefer to oversee the work themselves to ensure it’s done to their standards. If that’s your preference, ask for a price reduction rather than requesting the seller makes repairs
If a seller isn’t willing to pay, buyers can request a credit in lieu of repairs. With a credit, the buyer pays for repairs, but the costs are rolled into the mortgage so it doesn’t require cash on hand. However, not all mortgage loans allow credits in lieu of repairs.
A home is the biggest purchase you’ll ever make, so it’s important to do your due diligence. Instead of getting caught up in a home’s charm, look below the surface for problems that threaten to turn your dream home into a money pit. Only by doing your homework and being prepared to negotiate can you be confident that you’re getting a great home at a great price.
This article is brought to you by Windermere Real Estate, where Debbie Wise treats each transaction and client the same, whether it is a high-end luxury home or a first-time starter home. For more information, please contact us today!