Huntsville Alabama Houses Blog

Should I get an inspection?

In one of my previous posts, I explained the term "caveat emptor" which is Latin for "buyer beware". There are only about 10 "caveat emptor" states left in the US. In a "buyer beware" state, a seller is not obligated to reveal defects in a written disclosure form, although this does not absolve the seller from disclosing them verbally. It is still against the law for ANYONE, including an agent, to hide material facts from buyers and/or sellers.

In a "caveat emptor" states, the home inspection is even more critical whether you are the buyer or the seller. A home inspector can find those hidden defects and point them out to you before you buy or even before you sell.

Let's face it, as a seller how often do you go around your home, under the crawl space, and even in the attic to search for defects you aren't aware of? Chances are, you haven't.

Even though Alabama doesn't require a seller to hire an inspector, you can hire one before you sell. This gives you an opportunity to do repairs before you get a contract, minimizing the risk of a buyer backing out of a deal at the last moment. Provide a copy of the inspection report to anyone who makes an offer on your home and let them know what has been repaired and what has not been repaired.

From a buyer's standpoint, you cannot afford not to hire an inspector. Even though most contracts contain wording allowing you to do your own inspection, a licensed inspector can typically do a much better job for you. Yes, you can save $300-$400 by performing an inspection yourself, but you are taking a risk of purchasing a home with a defect you missed. After you've closed on the deal, it's too late. Sure, you can sue, but only if you can prove the seller knew about it before selling the home. That's very difficult to do.

Sellers, once you have an inspection report, make mandatory repairs according to the contract for your particular county. Mandatory repairs typically include fixing any heating/cooling, plumbing, electrical, appliance, and safety issues. Other needed repairs may be addressed at your discretion.

Buyers, once you have an inspection report, make a request of repairs in writing and send them to the seller. Your agent can help you do this. Keep in mind the seller is only obligated to repair items related to heating/cooling, plumbing, electrical, appliance, and safety issues. Furthermore, the seller is only obligated to have those items in "normal and operating" condition, regardless of what the recommendations are on the inspection report. A leaky drain under the sink is a required repair; a new faucet handle is not regardless of how bad it looks. If, however, the water won't turn on with that handle, then the repair would be required but the seller does not have to replace it with a new one; he only has to repair it.

Don't nickel and dime the seller to death. That isn't the purpose of the inspection report. Although it's not uncommon for a buyer to request non-mandatory repairs, asking for too much could jeapordize the deal. No house is perfect.

So, the simple answer to the question is, "Yes, hire an inspector." Whether you are the buyer or seller, I think it is money well spent.

Todd

Builders Add Perks To Entice Buyers!

By now you've heard about the housing market downturn. If you haven't, you either haven't been reading my blog or watching the news. Although sales of existing homes have decreased over the last few months, primarily due to the mortgage market woes, sales of new homes have slipped significantly more.

As a result, builders are left with an inventory of newly constructed homes they are having a tough time selling. Builders, over the last few years, have largely been reluctant to work with buyer's agents, preferring to used their own hired sales people. This effort maximized their profit, but caused many buyer's agents to be wary of builders. More than once I've heard of a buyer's agent showing a prospect a new home, only to find out later the builder contacted that buyer and convinced them to work directly with their own sales associates. I think it goes without saying this left a sour taste in the mouth of these buyer's agents.

The tables have apparently turned. I receive several emails every week from builders offering agents a significant bonus for bringing a buyer. Many agents are still reluctant to show these homes, gun shy and wary of the former practices of many builders.

That's not all, though. Builders are offering incentives for agents' buyers as well. Many of these builders are now offering thousands of dollars in closing costs even for contracts less than full price. Some are even offering to pay pre-paids (insurance, escrows, etc). What this means is you can buy one of these newly constructed homes at a decent price with potentially no cash out of your pocket. Additionally, if you buy one of these homes before it is completed, you may be able to choose what fixtures, appliances, and colors you like.

If you've ever thought about buying a brand new home, timing has rarely been better than it is right now. Contact a real estate agent and ask them if they work with builders. If the answer is "yes", go for it. With the current perks builders are offering to buyers and their agents, my guess is you will be treated like royalty from start to finish!

Oh, and yes...I do work with builders (hint...hint) :)

Todd

www.huntsvillealabamahouses.com

Bond Money

What is bond money? What does it mean to you?

Each year, the Alabama Housing Finance Authority (AHFA) sets aside a certain amount of money to loan to homebuyers at super low interest rates. Often, this rate is ¾% lower than typical mortgages saving you thousands of dollars per year in mortgage payments. Additionally, the loan is a 100% loan and closing costs may be wrapped into the loan. Of course, there are some qualifications.

Several situations exist that qualify someone for bond money:

The buyer’s combined family income cannot exceed federal income limits and sales price limits. Currently, that limit is $77,100 for target areas in Madison and Limestone County. For non-target areas, the limit is $64,800 for a family of 1 or 2 persons and $74,520 for a family of 3 or more persons.

The sales price of the home cannot exceed $289,705 in target areas, and cannot exceed $237,031 in non-target areas.

If the buyer is a first time homebuyer and meets the income and sales price requirements listed above, the buyer is qualified.

If the buyer is not a first time homebuyer, but has not owned a home within the last three years, the buyer is qualified providing they meet the first two requirements.

If buyer is attempting to purchase a home that lies in a bond “target” area, the buyer is qualified even if they have owned a home before.

In all cases, the buyer must use the home as a primary residence. Sorry, investors!

Not all lenders participate in the bond program, so you may be making several calls before you find a lender who participates. For more information on this program or other AHFA programs, visit their web page at www.ahfa.com.

Todd

www.huntsvillealabamahouses.com