6 Expenses to Include in Your Homebuying Budget

First-time homebuyers are sometimes caught off guard by overlooked expenses, which can create an uncomfortable financial pinch. Be sure you consider these one-time and ongoing expenses.
8ecb8b5c10a19ccbe1daba7bc38ec77cw-c327365xd-w685_h860_q80
1. Home Inspection
For a few hundred dollars, an inspection can uncover potential trouble such as structural problems or asbestos.

2. Home Maintenance
Experts recommend setting aside 1 to 3%* of the home’s purchase price for annual maintenance. For example, you may need to buy lawn care equipment or replace the roof, furnace, or water heater.

3. Taxes And Insurance
Property taxes and homeowners insurance aren’t always included in mortgage payment calculators.

4. Extra Cash At Closing
Your lender should give you a detailed estimate of closing costs. But beyond those, you may have to pay additional expenses, such as a prorated portion of property taxes or homeowners association fees that the seller has already paid.

5. The Move
Whether you hire professional movers for a few thousand dollars or rent a truck, buy boxes and recruit friends to help, moving costs money.

6. Settling In
You may have to pay utility connection fees when you move in, plus utility costs may be higher than you were used to as a renter. Other costs include lock replacements and decorating expenses.

Have you lost any deals due to a Home Inspection?? — Bill Nickerson’s Blog

A great read!

We hear so many times of home sales falling apart due to home inspections or some minor repair issues. Broken steps, missing railings, chipping or flaking paint and the list goes on. These are typically minor issues and can be fixed quickly and affordably. What if I told you I have the answers to your […]

via Have you lost any deals due to a Home Inspection?? — Bill Nickerson’s Blog

Home Inspection and Repairs: What Should a Buyer Expect?

We’ve all heard the expression ‘let the buyer beware’, and no where is that more true than in the purchase of a home. Whether purchasing a brand new home in the suburbs, a downtown high-rise condo, or a 100 year-old lake side cottage, a home inspection by a trained professional will not only provide a clear picture of the condition of the property, but could save you thousands of dollars.

home inspection.jpg
What is a Home Inspection?

A home inspection is a detailed examination of a residence and the immediate exterior area that identifies both health and safety concerns and system or structural problems that might require repair or replacement. The report is usually broken down into categories such as electrical, plumbing, roof, HVAC, foundation, etc. Within each category, the items inspected are identified and commented on by the inspector. So for instance, when examining a furnace, the inspector may note that it is only 10 years old and functioning properly, but he might also note that it should be serviced. He would then make the recommendation in his report that servicing take place.

It should be noted that most home inspectors are generalists, and often suggest further evaluation by a licensed contractor in a specialized area. Most home inspectors do not climb up on your roof to inspect every valley, nor do they test wells or attempt to explain cracked walls. Their job is to report any anomaly that might, in the worst case, be a symptom of a larger problem, such as water stains in the attic.

The length of time required to complete the inspection will vary according to the type of home, the size, and the age. These factors will also help determine the price. A 20 -30 year old, 2000 square ft. home with three bedrooms, two baths will probably take about 2.5 – 3 hours to inspect and condo inspections are generally completed in a shorter inspection period. If ordering a home inspection as a buyer it is recommended that you be present, along with your agent, so that the most important findings can be discussed with the inspector. It is also somewhat easier if the seller is not present and all rooms are accessible.
How to Choose a Home Inspector

Many home inspectors come from some type of background in the trades, or are licensed contractors. It is also desirable that they have specific training from an accredited inspection training program and are members of one of the professional inspection organizations. In Massachusetts licensing is required.

It is also a good idea to inquire about the format of the report itself. For any item that an inspector comments on, it is useful if there is an accompanying photo included in the report that specifically identifies the problem. Without a photo, you may be scratching your head a month from now asking, ”Which pipe is he referring to?” Hand written reports are becoming a thing of the past. A well organized report created through a computer generated software program that is saved as a pdf is the new industry standard. This is a report that is legible and can be easily saved for future reference or sent to the listing agent or a contractor for comments or quotes.

If you’re unsure about where to begin your search for an inspector, ask your agent for one or more recommendations.
What Does the Seller Have to Repair?

Unless you are purchasing a brand new home with a builder’s warranty, the answer is, not much. If you are purchasing with a VA or FHA loan, there may be some items that your lender will require to be in working order prior to close of escrow. That being said however, it isn’t always the responsibility of the seller to fix those items and repairs may be a matter of negotiation.
One thing to keep in mind when you first see the inspection report is that no home is perfect, especially a re-sale home, and over time the number of flaws generally increases. The inspection report is not a laundry list to hand to the seller with a request to repair everything. Rather it is a reference guide that provides a broad picture of the condition of your home and helps you prioritize repairs and improvements.

The process of determining what to ask the seller to repair should start with what you are paying for the home and how many repairs are necessary. If you are paying top dollar for the home you are in a better position to expect the seller to make repairs or cover the costs of repairs. On the other hand, if you got a steal of a deal on the home, or purchased a foreclosure or REO it is unlikely that repairs will be made or a credit provided.
Another thing to consider is whether or not you had knowledge of the needed repair prior to writing your offer. If it is obvious to even an untrained eye that the roof needs to be replaced that should have been taken into account when writing your offer and it is unlikely the seller will cover that cost. However, if as a result of the home inspection you discover that the entire HVAC system is inoperable, that is likely not something you knew prior to writing an offer. That would be an expensive repair and one that you might ask the seller to make, or provide as a credit.

Repairs are negotiable, but when asking for seller repairs or credits it is in everyone’s best interests to be reasonable. Ask for the big ticket repairs if appropriate and just figure that you’ll take care of the smaller items like a broken outlet cover or a torn window screen.
A home inspection is always important for even an experienced investor. Not everything is immediately apparent on a walk through. Think of it this way: A home inspection is rather like being able to fast forward in a marriage by five years and learn all about your spouse before the wedding day! Certainly not an opportunity to be missed.