12 Red Flags That Should Raise Concern
Sponsored B: Buying? Here's why you need a home inspection
"Virtually
every 'used' home needs some repair or improvement," said Kathleen
Kuhn, CEO and president of HouseMaster. "That's to be expected. But with
today's high prices, you want to make sure that you are aware of any
major problems in a house you are considering purchasing, and what it
will take to remedy the situation."
Drawing from their own
findings from more than one million home inspections, HouseMaster says
the most serious home defects to be on the lookout for are:
- Cracked heater exchange
- Failing air-conditioning compressor
- Environmental hazards including radon, water contamination, asbestos, lead paint, and underground storage tanks
- Moisture in the basement
- Defective roofing and/or flashings
- Insect infestation -- termites or carpenter ants
- Mixed plumbing
- Aluminum wiring
- Horizontal foundation cracks
- Major house settlement
- Undersized electrical system
- Chimney settling or separation
Kuhn says most of these
problems can be repaired. However, depending on the specific problem,
the cost can be substantial, particularly if the defect involves one of
the major systems. The cost could become a factor in whether you
ultimately buy the house.
For example, a new air
conditioning compressor could cost you up to $1,200. A new roof or
repairs can cost at least several thousand dollars. A wet basement could
cost up to $5,000 to remedy.
If you enter negotiations to
buy a particular house, your agent should advise you to provide a
provision for renegotiating or backing out of the contract if a home
inspector finds major problems.
"If the property inspectors
find that little or no corrective work is required, you have little or
nothing to negotiate," say Eric Tyson and Ray Brown in their book, Homebuying for Dummies.
"Suppose, however, that your inspectors discover the $200,000 house you
want to buy needs $20,000 of corrective work for termite and dry-rot
damage, foundation repairs, and a new roof. Big corrective work bills
can be deal killers."
If repairs are needed, there are several ways to proceed if you still want to buy the house, the Dummies book advises.
- The sellers can leave enough money in escrow to cover the cost of repairs, with instructions for the escrow officer to pay the contractors as the work is completed.
- The lender can withhold part of the full loan amount in a passbook savings account until the work has been done.
- The sellers may give a credit for the work. Lenders may disapprove of this last alternative because there aren't assurances that the repairs will be made.
A home inspection usually
costs between $250 and $400. Hire a qualified inspector. Try to get
referrals from friends or anyone you know who has had a satisfactory
experience with a home inspector. Also, look for affiliations with
organizations like the American Society of Home Inspectors or the
American Association of Home Inspectors. Both groups require its members
to be certified, meet professional qualifications, and adhere to
specific business ethics.
Once you make an appointment with a home inspector, it's important to be there.
Your investment of spending
these few hours with the inspector could prevent headaches and save time
in the future. As the home inspector examines the various systems and
components of your home, ask him or her to explain what problems may be
encountered down the road, what signs to look for, and how to prevent
them.
Try to learn how things work and how to maintain them. The
inspector may also point out little flaws or oddities that don't measure
up to being mentioned in the report, but may warrant keeping an eye on.
Says Kuhn of HouseMasters, "A
pre-purchase inspection is your best protection against buying a home
based more on emotions, rather than as a sound investment."
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