8-Point Home Inspection Checklist for Buyers

After lots of hours looking for the right number of bedrooms, a great kitchen, and enough square footage on the perfect lot, you finally found your family’s dream house. Those things are crossed off your checklist.

Now onto the home inspection checklist to make sure the dream house doesn’t turn into a nightmare.

With a robust seller’s market showing no signs of slowing, buyers may be tempted to move quickly and forego some of the standard safeguards — like the home inspection. In some cases, the seller might ask for that. Red flag.

“I’d been watching the market a little bit and kind of seeing how fast things were going and just decided to jump in, knowing that it could be a challenge. I did not think it would be quite as challenging as it was,” said Jennifer Meadows of Richmond, Virginia. “In seven weeks, we looked at a total of 37 houses and it was bid No. 5 that finally got us a house.”

8-Point Home Inspection Checklist

Home inspectors can have more than 1,000 items to check throughout the house. They’re looking for any signs of damage and to make sure everything is in working order.

While you don’t necessarily need to know everything the inspector is looking for, having a home inspection checklist can help you better understand what is going on.

These are the eight areas the home inspector will concentrate on:

Inspection is Part of Home Buying Process

The Meadows family of Virginia had to offer well above list price for their house, but they were not willing to waive the inspection to make their offer more attractive to sellers, even though the seller asked them to.

Meadows knew a home inspection was the last chance to find any potential problems with a house before the sale was final and was well worth the cost.

“Was this the absolute house of my dreams? Not quite. But the houses that we lost out on, I wasn’t willing to take that risk (of waiving inspection.) I just wasn’t willing to do it because although they were great houses, I knew something else would come along,” Meadows said.

Having a home inspection checklist can help you know what to expect during the inspection and can even help you save money.

What is a Home Inspection?

A home inspection is a way for both the buyer and seller to learn about any potential health or safety hazards that may be in the home.

Typically the buyer pays for the inspection which is about $350 for an average size house, less for a small home and more for a larger one. The cost varies by state and city. Sometimes buyers and sellers split the cost but that’s not likely in a hot sellers market.

Many buyers are focused on what the home looks like and not necessarily the state of the different features that make it a solid buy. Like the roof and the electrical systems.

“They don’t pay attention to what is really important in the home,” said home inspector John Wanninger.

He has done more than 12,000 inspections and other members of his INSPECTIX team in Nebraska have inspected more than 30,000 homes.

Beware of Forgoing the Inspection

If a buyer chooses to forgo an inspection and a problem appears after the sale, the buyer usually has little or no recourse.

“I wonder about what’s going to come in a couple years after this market for all those buyers that chose not to do a home inspection but maybe relied on what their agent saw during their walkthrough or the seller’s disclosure which is not supposed to be a warranty of any kind,” said Nicole Deprez, a residential real estate agent with NP Dodge in Omaha, Nebraska.

The home inspection and report can also be a guide for what repairs or improvements a buyer might need to budget for after the purchase, like a new roof or HVAC.

The article 17 Checkups to Give Your House Now to Avoid a Shocking Repair Bill Later can also help you figure out how much money to set aside for periodic maintenance and repairs.

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What Happens During the Home Inspection?

Usually, the person buying the house is present for the home inspection and can ask questions during the walk-through, but the seller isn’t normally present. The inspector will turn on the oven, run water, open and close windows, go into the attic, crawl under the house, and more.

Depending on the size of the house, an inspection takes about two to four hours and older homes may take longer.

Inspections are important for all kinds of residential and commercial real estate purchases, not just free-standing single-family homes.

The following are the eight areas that inspectors focus on:

1. Structural Components

One of the most expensive things to fix in a house is the foundation. Problems with it can lead to all sorts of other issues.

Sometimes, this will involve the inspector going into the crawl space under the house if there is one.

Wanninger said home inspectors mainly look for evidence of movement and not just minor hairline cracks or settling, water penetration, bowing in the walls, signs a footing has failed, things like that.

The inspector will also look at all walls, ceilings, floors, windows, and doors.

All windows and doors need to open and close properly with no gaps or sagging around them. There needs to be proper egress from bedrooms.

On the walls, ceilings and floors, home inspectors will look for:

  • Discoloration from mold or water damage.
  • Sagging, bulging, or cracks.
  • Uneven baseboards and bouncy or uneven floors.
  • Gaps between the walls and floors.
  • Popping nails.
  • Leaning or uneven stairs.

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2. Roof

Not all inspectors will go on to the roof and they certainly won’t do it if it is rainy, snowy or excessively windy.

They’re looking for:

  • Overall roof condition.
  • Missing or warped shingles.
  • Issues with the gutters or flashing.
  • Soft spots or algae growth.
  • A leaning, damaged or repaired chimney.
  • Clear vents.
  • Evidence of patches or repairs.
  • Evidence of hail damage.

“Any waviness on the roof is an indication that the sheeting might be compromised. You might have poor ventilation in the attic and it’s causing the sheeting to deteriorate,” Wanninger said. “I can tell by how the sheeting responds underneath my feet. I know what’s going on and I can tell you the thickness of the sheeting by walking on the roof because of my experience.”

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3. Attic and Insulation

The place some people use as extra storage can tell a lot about the house.

In the attic, home inspectors look for:

  • The condition and amount of insulation.
  • The ventilation condition since poor ventilation can lead to moisture which can lead to mold growth.
  • Signs of water like wet or damaged insulation or other signs of leaks.
  • Rust around the furnace if the furnace or HVAC is in the attic.
  • Signs of fire damage like scorched wood or soot.

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4. Heating, Ventilation and Air Conditioning (HVAC) Systems

HVAC systems keep our houses cool in the summer and warm in the winter. Even with regular maintenance they can still have problems.

Home inspectors check for:

  • Proper installation and function.
  • Signs of gas or carbon monoxide leaks.
  • Proper lighting of the furnace.

To avoid damage to the equipment, inspectors will sometimes only check the system that is in use during the current season, but that depends on the location and inspector.

If the house has a fireplace, home inspectors will check the exhaust flue, dampers, and any gas lines.

“We don’t light them, but we inspect them for operation and the condition of the visible sections,” Wanninger says.

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5. Plumbing and Water

We need water to live, but water is the enemy to most homes. Good ‘ole H2O is the cause of most homeowners insurance claims and once the home you’re looking at is yours, can still cause problems, so a bit of planning from Ignoring These Eight Home Repairs Could End Up Costing You a Lot More could help save you some money and aggravation.

It’s important for home inspectors to pay a lot of attention to anything involving plumbing and water.

Inspectors will:

  • Check all toilets, bathtubs, showers, sinks, waterlines, hoses, washer connections and anything else that has water going to it.
  • Test toilet mechanisms to make sure they flush properly.
  • Fill all bathtubs, sinks, and showers to make sure they drain properly.
  • Check hydrants and pipes outside for any leaks.
  • Test the water pressure.
  • Look at the type of pipes in the home. Some have been recalled and others have a limited lifespan.
  • Inspect the water heater and check the temperature, the pipes and the pressure relief valves.

In the basement, inspectors will look for any signs of water damage, which could be a musty odor, mold, mildew, uneven flooring, or damaged walls.

Outside, inspectors will check if the gutters and downspouts are directing water away from the house.

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6. Electrical and Wiring

The electrical and wiring systems are other things that can be problematic and hazardous.

An electrical systems check includes:

  • Looking at the electrical panel and the wires entering it:  The connections need to be with circuit breakers and not fuses. The main breaker needs to have enough amps. There should be no rust in the panel.
  • Check the reverse polarity.
  • Wiring: Wires need to be covered with proper insulating materials and not have any metal showing. This is sometimes not the case in older homes. No wires should be loose and they should be copper instead of aluminum and not knob and tube, also found in older homes.
  • Switches and outlets: All lights, switches, and outlets should work and contain grounded (three pronged) outlets. All Ground fault circuit interrupters (GFCI) and ground fault interrupters (GFI) near water sources need to function and reset properly.

“If you’ve ever heard of little kid getting shocked when a blow dryer fell into the bathtub,  It’s because that blow dryer is plugged into an outlet was not GFCI protected which will kick the power out immediately in the event of a currency fluctuation,” Wanninger said.

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7. Outside the House

Paint doesn’t just make a house look pretty. It provides protection from the elements and can hide a lot of problems.

On the exterior, inspectors are on the lookout for:

  • The condition of the paint and siding: Any rot or decay can signal water or other problems.
  • Cracking or flaking masonry.
  • The condition of outdoor lights and electrical outlets.
  • Water: Any puddles or pooling or water can signal problems with bad grading or drainage.
  • Any trees or bushes that may be interfering with the wiring or other systems of the house.
  • The condition of steps, railings, retaining walls, and driveways.

Home inspectors are also looking for proper drainage away from the house.

“Moisture setting along the foundation is what’s going to allow the soil around the foundation to soften and give the foundation that chance to settle,” Wanninger said. “We look for gutters that are clean and draining away from the foundation, and that the dirt along the foundation is built up and the water straying away from the foundation.”

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8. Appliances and Other Things

In the kitchen, inspectors are looking for many things including:

  • The integrity of the cabinets.
  • The condition of any appliances that stay with the home and are part of the sale. For example, stove burners and ovens will be turned on.
  • The counters.
  • Whether the range hood vents to the outside.
  • Faucets and pipes in and under the sink.

Wanninger warned that sometimes things work during inspection but fail after due to lack of use once sellers move out, especially dishwashers where seals and other components go dry.

Inspectors will also check whether the garage door opens properly and that the safety mechanisms work.

That is one of the things that the Meadows’ inspector found in their new house, which could have posed a threat to the family dogs.

“The sensors on the garage door were not working so nothing was going to stop the door if something was in the way. It was going to keep going,” Meadows said.

Even though home inspectors look at thousands of items, there are some things they don’t do. Environmental issues like mold or radon, or pest issues like termites or carpenter ants inside the walls aren’t necessarily things a home inspector will find unless there are obvious signs of activity.

The same goes for sewer lines, septic systems, and swimming pools. Wanninger recommended hiring a specialist to look at those things, especially if the sewer lines are cast iron because they deteriorate over time.

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What to Do After the Home Inspection

After the home inspection, the buyer will receive a detailed report with everything the inspector found.

“I typically recommend that they take some time to read through the report so they can sort of digest information,” Deprez recommended. “Then if we have the ability through the contract, we can ask the seller for repairs or replacement.”

She had a warning about relying on the seller to do the fixes.

“A buyer can ask the seller to make repairs, but then that repair or replacement is sort of out of the hands of the buyer, so they don’t necessarily get to pick the person that does the repair or the materials,” she said, adding first time homebuyers traditionally want the seller to make the repairs so as a new buyer, they don’t have more to do when they move in.

If the home inspector finds major issues, buyers need to make a decision about whether or not to move forward with the closing.

In that case, it might be a good idea to get additional inspections with a specialist to find out the extent of the problem and what it would cost to fix it.

If you and the seller agree the seller will address the issues, it is important to make sure the repairs are completed and done to your satisfaction.

Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing about finance, health, travel and other topics.

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Source: thepennyhoarder.com

4 Tips for Buying a Fixer-Upper

In this article:

While the process of buying and renovating fixer-upper homes has increased in popularity due to fix-and-flip home improvement TV shows, not everyone is cut out for  major renovation projects. 

In fact, only 19% of homeowners said their home needed serious updates, and only 3% said their home needed a complete overhaul, according to the Zillow Group Consumer Housing Trends Report 2020. 

Buying a fixer-upper involves purchasing the least desirable home on the block and overseeing its transformation. Whether you’re considering a fixer as an investment — and you plan to sell after construction is complete — or you’re fixing up a home to make it your own, there’s a lot to consider when buying a fixer-upper, from home price to construction costs to financing. 

What is a fixer-upper home?

A fixer-upper is a home that needs repairs, but not so many that it’s uninhabitable or worthy of being torn down. 

Fixer-uppers are usually offered for a lower price than homes in better condition, which makes them appealing to buyers looking to maximize their purchasing power or investors looking to flip the property and turn a profit. 

Should I buy a fixer-upper home?

Most often, people buy fixer-upper homes because the cost of purchasing the home plus renovation costs may total less than what they’d pay for a comparable home in good condition. 

Here are some of the key reasons buyers decide on buying a fixer-upper:

Reduced price

If you have your eye on a popular neighborhood, either for resale value or your own lifestyle, you may be able to get a better deal buying a fixer upper in your desired location and renovating it than purchasing an already-updated home. 

Customizable improvements

When you purchase a fixer-upper, the sky’s the limit when it comes to fixtures and finishes (within your budget, of course). Renovating a fixer-upper can be ideal for buyers with very specific tastes or those who want more control over the aesthetics of their home. When buying a fixer-upper, you avoid paying for the renovations someone else completed, especially if you don’t like them. 

Older home charm

The character of older homes isn’t easy to replicate. Buying an older home in need of some TLC can allow you to restore and maintain time period details, while bringing the home up to today’s efficiency, safety and comfort standards. 

Make a profit

Whether you’re planning to flip or live in the home for a few years before selling, you may be able to turn a good profit based on the renovations you make. Your return on investment depends on the types of renovations you complete, the materials you use and the quality of the work. If profit is the goal, select popular home improvements in your market to increase property value and appeal to a wide variety of buyers. 

Tax incentives

In some metropolitan areas, such as Philadelphia and Cincinnati, buyers who purchase a fixer-upper and renovate to improve the property value may be eligible for a tax abatement or credit. 

How to find fixer-upper homes

Finding the right fixer-upper is all about where you look. Here are a few strategies for finding the right home. 

Search online: Use Zillow to search for homes below market value. You can search keywords such as “fixer upper,” “needs work” or “TLC” to narrow down potential properties. 

Work with an agent: A local buyer’s agent should be able to help you find fixer-upper homes in your desirable neighborhoods. Well-connected agents may even be able to show you homes that haven’t hit the market yet, via word of mouth. 

Search auctions, foreclosures and short sales: Distressed properties may be in fine structural condition but are sold below market value in order to offload them quickly. It’s important to note that these homes are usually sold as-is, and disclosures might not be available, so be sure you have enough extra money in your budget to cover surprise issues. 

What to look for when buying a fixer-upper home

When shopping for a fixer-upper, prioritize the things you can’t change about a home (like its location), or things that would be too costly to change (like significant structural renovations). Here are key factors to consider:

Location

Location is the most important thing to look for, because it can’t be changed. Look for a fixer-upper in a desirable or an up-and-coming neighborhood in order to maximize potential resale value. Finding the right location will also ensure that you’re happy in the home. Pay attention to things that might be important to you, like school ratings, nearby parks and restaurants and commute times. 

The home’s location will also play a part in determining your renovation budget and estimating the home’s post-renovation value. The quality of finishes and upgrades you select should be in line with comparable homes in the same neighborhood if your goal is to recoup costs on resale.

Layout and size

With a fixer-upper, you might be able to change the layout as you see fit, but pay attention to any design and layout ideas that would require removing load-bearing walls. This can be a costly exercise, and sometimes it’s just not possible. Home additions to increase square footage are also expensive and might not be allowed, depending on local zoning requirements and laws. 

Home condition

There’s a difference between a fixer-upper and a home with significant structural defects. Structural and mechanical problems are a lot more expensive to fix than cosmetic ones. Be sure to hire a home inspector to gain knowledge of the home’s positives and negatives — hiring a home inspector is an invaluable step, even if you’re buying a home as-is. Here’s what should be on your home inspection checklist for a fixer-upper:

  • Strong foundation
  • Up-to-code electrical
  • Proper plumbing
  • Solid roof condition (should come with roof certification)
  • HVAC and/or central AC
  • Functional windows

Straightforward cosmetic updates

Prioritize homes that have outdated or worn out finishes that don’t appeal to the general public but can be updated affordably and without too much effort. Ideally, the fixer-upper you buy will only need cosmetic upgrades. Look for homes with:

  • Peeling or dated paint (interior and exterior)
  • Older bathroom fixtures and tile
  • Dated kitchen cabinetry
  • Laminate or tile countertops
  • Stained carpeting
  • Hardwood floors in need of refinishing
  • Leftover belongings or trash that need to be removed
  • Neglected landscaping
  • Old or non-functioning appliances

How to buy a fixer-upper

Buying a home that needs work can be risky, because you won’t know the full condition of the home until you start tearing down walls. That’s why doing your due diligence on the property and neighborhood ahead of time is key.

Get a professional home inspection

When you put an offer on a house, be sure to include an inspection contingency. An inspection contingency allows you to back out of a deal and get your earnest money deposit back if the inspection reveals that the home has serious hidden defects.

Even homes marketed as being in “as-is condition” can be inspected — the only difference is with an as-is home, the seller is telling you that they do not want  to make any repairs based on your findings. 

The buyer is responsible for the cost of  an inspection, which ranges between $250 and $700, depending on the size of the home and your location. In addition to a general inspection, you might also opt for specialized inspections for trouble areas. Common specialty inspections include pests, sewer lines, radon, lead-based paint and structural inspections. Costs for specialty inspections are similar to general inspections. 

A structural inspection reviews the home’s structural integrity, but also lets you know of any natural hazards nearby that could impact the resale value or your own health and safety. You may also consider hiring a structural engineer to assess the property before you make an offer. It will cost between $500-$700 but could save you thousands of dollars in future foundation repairs.

Hire an architect and general contractor

An architect can create a new layout for a home, create plans and blueprints and tell you what is and isn’t possible. Some cities require you to submit architectural plans to acquire home permits, making an architect a necessity. The average cost for an architect is around $5,000, depending on the scope of your project. 

Your home inspector should be able to give you a rough estimate of what it would cost to adequately repair problem areas that come up in an inspection, but since they’re not the one who will be doing the work, it’s best to get a more accurate quote from a contractor. Whatever they quote you, add a 10% contingency for any problems that come up along the way. Be sure to get quotes from a few contractors and do your due diligence in checking their licensing and customer reviews. 

Budget for improvements

Working with your contractor, be sure that your budget takes into consideration all applicable costs. Don’t forget to include:

  • Permit fees, if applicable
  • Cost of materials, like flooring, paint, light fixtures, cabinetry, countertops and hardware
  • Cost of labor, including general contractors, plumbers, electricians and inspectors
  • Cost of living during renovations, if the home will be uninhabitable during the project

Know your limits

Above and beyond the financial concerns, you also need to gauge your tolerance for a major renovation project, especially if you plan to save money by doing some of the work yourself. Home renovations are not as easy as they look on TV and if it’s your first time, a lot can go wrong. Even if everything goes right, there’s a lot of hassle involved in a large-scale construction project. You’ll have to live in a construction zone or move elsewhere temporarily, while still paying all the carrying costs for the home. 

If the thought of a months-long renovation is more than you’re willing to take on, but you’re looking for a move-in-ready home, consider a Zillow-owned home. Every home has been recently repaired for buyers to avoid costly surprises. 

Financing options with fixer-upper loans

You can purchase a fixer-upper with a traditional conventional loan then pay for all the improvements out of pocket. Or, you can get a fixer-upper mortgage that’s designed to help you finance both the house itself and the renovations. Common types of home loans for fixer-uppers are: 

FHA 203(k) standard

An FHA 203(k) Standard loan finances the purchase and renovation of a primary residence. Here are the key requirements:

  • Minimum credit score of 500 with a down payment of 10%, or a credit score of at least 580 with down payment of 3.5%
  • The total cost of the loan must fall under FHA mortgage limits in your area
  • No luxury improvements (like pools) are allowed, but structural work is allowed
  • Requires a HUD consultant to approve the architectural plans, oversee payments to contractors and review inspections to ensure the home meets structural integrity and energy efficiency standards
  • There are limits on how soon you can resell (not within 90 days)
  • The contractor is paid out of an escrow account managed by the lender

FHA 203(k) streamlined

This financing option has similar requirements as the FHA 203(k) Standard, but it’s meant for simpler, cosmetic renovation projects, as it has a spending limit. 

  • Minimum credit score of 500 with a down payment of 10%, or a credit score of at least 580 with down payment of 3.5%
  • For cosmetic upgrades under $35,000
  • There are limits on how soon you can resell (not within 90 days)
  • The contractor is paid out of an escrow account managed by the lender

HomeStyle loan

A HomeStyle loan is a combination home loan and home improvement loan, guaranteed by Fannie Mae. 

  • Minimum credit score of 620; minimum down payment of 3 or 5%, depending on a few factors like owner occupancy, first-time home buyer status and income
  • Allows for other improvements that aren’t covered under an FHA 203(k), like pools and landscaping—but note that all improvements need to be “permanently affixed to real property (either dwelling or land)”
  • The contractor is paid out of an escrow account managed by the lender
  • You must use a certified contractor

CHOICERenovation

A CHOICERenovation loan is a combination home loan and home improvement loan, guaranteed by Freddie Mac. 

  • You can finance renovations that cost up to 75% of a home’s value
  • Money can be used for upgrades that prevent natural disasters
  • You can DIY the work and get a down payment credit
  • Requires multiple appraisals to ensure you’re upholding the terms of the contract and that the agreed-upon renovations make the home meet its estimated value

Source: zillow.com

What You Should Know About Easements and Rights-of-Way

Don’t be startled to discover that you must “share” part of your land.

In certain types of real estate transactions, it’s not until the middle of the deal that home buyers realize the land they’re purchasing with their home is not 100% theirs. They are startled to discover that they must allow their neighbors to “share” part of their land, or that the local utility company has a right to access a pipe buried in their back yard.

How can this be? In both examples, the properties have what’s known as an “easement,” otherwise known as a “right-of-way.” This easement grants other designated people the right to specific types of access. Easements can be granted to another person, such as a neighbor, or to an entity, such as an electric and gas utility.

A property easement is generally written and recorded with the local assessor’s office. The documented easement will show up when a title search is conducted and it stays there indefinitely, unless both parties agree to remove it.

Without getting too deep into legal details, here are the types of easements worth knowing about.

1. Right-of-way through your property

As a homeowner, you would probably assume that you’re purchasing the land around your home, front yard, back yard and driveway. But that’s not always the case. Often, when you review the preliminary title report, you may discover that someone actually has a right-of-way through your property.

This is common in the case of a long driveway or a home that may be set back from the street. It could have been that in order for a neighboring home to have been built, that property’s owner negotiated with a previous owner to gain a right-of-way through the front of the parcel or driveway for the home you are buying.

In this scenario, you own the land, but the owner of the neighboring property has been granted right to pass through your property. In some instances, the previous owner might have been compensated for granting this access. The important thing to know is that easement carries over when a new owner assumes the property.

2. Right-of-way grant

If you’re the homeowner who needs access to a neighboring property, or you discover that the driveway or walkway to your home is actually not 100 percent yours, there’s usually nothing you need to do. It’s just important to be aware of these conditions, and that this is not entirely your land.

Depending on the size of the easement and the type of land it covers, there may be some issues regarding maintenance. For example, it may be your responsibility to keep up the land: Mowing the lawn, shoveling the pathway or maintaining a fence. If there’s a maintenance ambiguity, check with the current seller to understand how she and the other owner worked this out in the past. Many times an easement like this, known as a “Right-of-Way Grant,” has been on title through the course of three or four owners, making the original intentions or understandings not explicit. Understanding how the easement has worked in most recent practice is your best course of action.

3. Other types of easements

Anyone who lives in a condominium or some type of planned development likely spends many hours working on property they don’t own outright but have access to. Most likely, the condo or planned development’s homeowners association (HOA) actually owns those areas, but each resident or owner has a right to pass through, which is one obvious type of easement.

But some easements aren’t so obvious and take buyers and homeowners by surprise. A classic example is one in which a utility company, such as an electric and power company or a telephone company, has an easement through your land for the purpose of maintaining the utility.

There was a situation near San Jose, CA, in which the electric and gas utility had an easement through someone’s backyard. It had been on title for many years, but the existing owners didn’t know about it. One day, the electric company showed up with digging machines and materials and made a mess of the yard digging to fix a faulty line. Though the owners were shocked, there was nothing they could do.

Situations like these show why it pays to be cautious if an easement shows up in a property title search. Ask the title company, attorney or your real estate agent to retain all documents pertaining to the original easement in order to review the details. That way, you will know the exact location of the easement, its size and scope and how it’s to be utilized.

Often, there’s not a problem with easements, but it’s still important to check. Any potential red flags might wind up affecting the value of your home.

In the case of the house in San Jose, for instance, what if the utility company had done permanent damage? What would be the homeowner’s recourse, if any? It’s best to vet these things before closing, rather than facing a serious real estate dilemma down the road.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

Final Walkthrough Checklist

A final walk-through ensures that the property’s condition hasn’t changed since your last visit and that the terms of your contract will be met.

You’ve found the home you love, made the offer, and the seller has accepted. You’ve gotten your inspections done, your loan is being finalized and an escrow closing date has been set.

Great. But you’re not quite finished yet.

Your next step is a final walkthrough, arranged through your real estate agent, at least a week before closing. The goal: Ensure the property’s condition hasn’t changed since your last visit, that any agreed-upon repairs have been made and that the terms of your contract will be met. Depending on your contract or local customs, a walkthrough may be informal or more formal. In a formal arrangement, you will actually sign a contract addendum confirming that you’ve done your walkthrough and everything is as it should be.

Here’s your checklist for your final walkthrough:

  1. A final walkthrough isn’t a home inspection. You’ve already done that by now (or should have).
  2. Take your contract with you. You might need to refer to it while on site.
  3. In many markets, the buyers and sellers never actually meet in person. But if everyone is agreeable to the idea, perform the final walk-through in the seller’s presence. He or she knows the home better than anyone else and should be able to answer your questions and provide some color on the history of the home.
  4. If the home is vacant, it’s even more important to do a final walk-through. Since your last visit, for instance, someone might have left a faucet dripping, inadvertently causing water damage.
  5. Take along a checklist of things to do during the final walk-through, including:
  6. Check the exterior of the home, especially if there have been strong wind or rain storms since your last visit.
  7. Turn all light fixtures on and off.
  8. Make sure the seller hasn’t removed any fixtures, such as chandeliers, that he or she agreed to leave behind.
  9. Check all major appliances.
  10. Turn heat and/or air conditioning on and off.
  11. Turn on water faucets; check for leaks under sinks.
  12. Test the garage door openers.
  13. Flush all toilets.
  14. Open and close all windows and doors.
  15. Do a visual spot-check of ceilings, walls and floors.
  16. Turn on the garbage disposal and exhaust fans.
  17. Check the status of any agreed-upon repairs.
  18. Check screens and storm windows. If they’ve been stored, make sure you know where they are and that they’re in good shape.
  19. Look in storage areas to make sure no trash or unwanted items remain. Old paint cans or hazardous materials are often left behind by the seller.
  20. Do a quick check of the grounds. Some sellers have dug up and taken plants (even small trees or bushes) with them.

Taking an hour for one last inspection is a good investment in your time. After all, you don’t want to spend the first weeks in your new home cleaning up or making unexpected repairs.

Related:


Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

Managing Your Money, Together

To learn more about how our Minters are achieving their financial goals, we reached out to everyday Mint users, just like you, to hear their stories. Whether it’s paying off student loans, or working toward buying a home, we’re so inspired by the dedication this community has shown in working toward your goals and dreams.

One of the Minters we connected with is Jordan. He shared with us how he’s used Mint to reach a number of his financial goals. Check out his #EmpowerMint story:

My wife and I have been interested in getting out of debt ever since the day we took on student loans. With the desire to pay those loans off, we strived to learn more about budgeting and personal finance.

As we grew in our journey, there were many financial things we questioned that felt ‘normal.’ We heard so many messages that emphasized the need to have the newest toys to be happy, that having debt is normal, and that most people live paycheck to paycheck. We realized that we didn’t feel comfortable with any of that, and that we found satisfaction in being content with what we have. 

Knowing that money issues were often a problem area for couples, my wife and I started using Mint shortly after we got married in 2010 to ensure transparency and partnership from the beginning. We found Mint to be a terrific tool for us to have a complete picture of our financial situation. During this time, I was working full-time and my wife was finishing up her last year in nursing school. Mint was an immediate help in keeping track of where our money was going and in starting budget discussions that have proved to be invaluable in our marriage. It also helped initiate discussions on both near-term and long-term goals, which have been so key in helping us plan both strategically and aspirationally. 

As time went on, Mint was instrumental in helping us achieve so many of our goals including:

  • Paying off student loans
  • Paying for grad school with cash
  • Preparing for kids
  • Starting a 529
  • Saving for a down payment
  • Buying a home

Our current goal is to complete our 15-year mortgage in under 5 years. A combination of Mint, aggressive savings, overtime shifts, and side hustles have helped put us in a position to achieve this goal within the next 12 months. Once that goal is complete, we’re excited to have a little fun and celebrate this accomplishment, and then prepare for the next chapter in our financial journey. 

In addition to this goal, we also have various net worth milestones we would like to achieve in the next 1-, 5-, and 10-year periods. We are very excited about the concept of financial independence, and would like to be in a position where we have the opportunity to focus our attention on things outside of work, such as further investing in our family and causes that are important to us. With Mint, we can see how the choices we’re making are helping move us closer to achieving these goals. 

Today, we check Mint on a daily basis in order to stay on top of our expenses and monitor for any fraudulent activity. Years ago, Mint helped me identify a fraudulent charge almost immediately, enabling me to notify our bank and get the issue resolved. Reviewing our expenses enables us to stay within our budget, catch fraudulent activity, and follow the ‘every dollar’ budgeting rules that have been so helpful for us. In addition, linking our accounts has automated what would otherwise be a very manual and time-intensive process. 

I have also loved using the trends feature to have full visibility into exactly how our money is being spent and to help ensure we’re always partnering as we work towards our financial goals, rather than feeling like one person is pulling the other along. We can budget with transparency and not feel any need to hide transactions for personal expenses and rewards or small splurges. 

The trends feature has also allowed us to get a sense of what our typical spending has been in different categories. We periodically review our budget, and being able to easily see our historical spending in different categories has helped us set realistic targets, as well as track our progress when we are attempting to change habits. Lastly, being able to see changes in our net worth over the years has been inspiring, as we have been able to see in real-time how decisions to save or forego immediate gratification can have long-term benefits.

Beyond that, we have found a great deal of joy in doing things ourselves, whether it is cooking meals for the week, doing our own car maintenance, or trying to fix something ourselves before calling someone. Additionally, the satisfaction has compounded as we’ve seen that making these choices has helped us not only learn new things, but also in achieving our goals. 

Knowing what we know now, we’re really excited to pass these values on to our kids, and we’re happy to discuss them with anyone who asks. Additionally, I can see a ‘life’ after work that involves volunteering in some form in the personal finance field, whether that is teaching folks about budgeting or just encouraging them in their financial journey.

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Source: mint.intuit.com

5 Tips for Approaching the Open House

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For decades, sellers and their agents have been using open houses to help generate interest in their listings. Open houses give the general public the chance to view a home without scheduling a private showing. While open houses do get a lot of curious neighbors and casual browsers, they can be a good opportunity for serious buyers to decide if a home is worth pursuing further, or a way to get a better grasp on neighborhood home values. 

In fact, 59% of home buyers attended an open house during their shopping process last year and 43% of buyers said attending the open house was very or extremely important to determining if the home was right for them.* On average, home buyers attended 2.6 open houses before buying.

Whether you’re a sincere buyer or simply curious about the inside of a home, you should know how open houses work and understand how you can be a good open house attendee. 

Note: If open houses are restricted or unavailable due to public health concerns, work with your agent to arrange a private tour or video tour. All Zillow-owned homes include a self-tour option — just use our app to unlock the door and tour at your convenience.

What is an open house?

An open house is an event during which potential buyers can tour a home that’s on the market. It’s usually hosted by the seller’s listing agent, or by the seller themselves, in case of a for-sale-by-owner (FSBO) listing. Open houses usually take place on weekends, during a set range of hours typically midday.

Open house benefits for buyers

No scheduling required: Unlike a private showing, you don’t need to set up a specific appointment to see a home. Simply show up during the open house hours and view the home at your own pace. 

Scope out the competition: If you’re interested in a home, attending the open house can help you gauge interest from other buyers. This can be helpful when determining how quickly you need to submit an offer and how much you should offer. 

Understand current home values: Seeing what homes are selling for in your area and what you can buy at a particular price point can be helpful if you’re just starting your search. 

Redefine your nonnegotiable home features: Checking out homes in person can help you redefine your list of must-haves: Do you really need that extra bedroom? What does a backyard of this size really look like?

How do open houses work?

Not every seller or listing agent will hold one, but here’s the typical process for sellers setting up an open house:

  1. The seller and their agent determine a day and time for the open house.
  2. The agent lists the open house on the local MLS.
  3. The agent advertises the open house on social media, online and with print ads or flyers. 
  4. The agent prepares for the open house — purchasing refreshments, printing flyers, setting up signs and adding little touches to make the home feel welcoming to buyers. (Yes, as a shopper, you can eat the cookies.)
  5. The agent hosts the event, greeting buyers and answering questions about the property and community.
  6. Buyers remove their shoes, tour the home, take pictures and video (if allowed) and jot down important notes. 
  7. Any buyer who liked the house will contact their own agent. They’ll then set up a private showing to see the home again or they’ll submit an offer right away — the latter is common in fast-moving real estate markets.

Who hosts an open house?

The person hosting an open house could be any one of the following: 

  • Listing agent: As the person hired to sell the home, the listing agent should be an expert on the property. 
  • Listing agent’s team member or associate: A busy listing agent may also send another agent in their place — either someone on their team or another agent in their office. They should be experts in the local market, but may not be as familiar with the individual home. 
  • Homeowner: If a home is for sale by owner (FSBO), the homeowner will be hosting their own open house. They’re undoubtedly the expert on the home, but their local market expertise may be limited. 

How to prepare for an open house

There are times when you might just stumble upon an open house while you’re on a walk or running errands. But if you’re intentionally looking for open houses as part of your home-buying strategy, try these tips.

Seek out relevant open houses

If you plan to visit multiple open houses in one day, make sure you’re focusing on listings that fit your criteria for budget and location. It’s not worth wasting time looking at homes outside your budget or those that are too far from your work or school. 

Tip: With Zillow’s home search tool, buyers can filter by homes with upcoming open houses (this filter can be applied in addition to other search filters like price, bedrooms, bathrooms, square footage and location). When you use the open houses filter in conjunction with filters for your other criteria, you can easily find the right open houses for your search.

A map of home listings on Zillow.

You can also tour most Zillow-owned homes any time between 6 a.m. to 8 p.m., any day of the week — just select the tour option on the listing. Although the listing agent will not be present, you can avoid a busy open house and rest assured the property is in move-in ready condition.

Do research on the market beforehand

With help from your agent or on your own, find out how each home you’re planning to visit stacks up against others nearby. Is the price in line with similar listings in the area? Are there any defects? Has it gone under contract recently and then returned to the market? Are there a lot of other interested buyers? Has it been sitting on the market for a long time? (“Days on market” is an indicator of a stale listing, but the standard number of days on market can vary based on where you live.)

Stay open-minded

If you’re searching on a tight budget in a hot neighborhood, there’s a good chance that the home that fits the bill will need some TLC. Fortunately, attending an open house can give you a better idea of the home’s condition and potential, while also giving you the opportunity to ask renovation-related questions — e.g., the location of load bearing walls and the details of local regulations. 

How to attend an open house

Now that you’ve done your research and are prepared to add some open houses to your home search, here’s what you should do once the day arrives. 

Ask questions

An open house is your best opportunity to ask the listing agent (or their associate) your questions — don’t be shy. Ask questions that you wouldn’t be able to answer just by reading a home’s listing description, such as:

  • What are the HOA restrictions?
  • Has the seller done a property tax appeal?
  • Have there been any recent renovations or repairs?

Tip: If you’re not currently working with an agent and you ultimately decide you aren’t interested in a particular home you tour, the open house could help you see if the listing agent might be the right person to represent you — many agents represent both buyers and sellers. 

Be honest

If anyone other than the listing agent or the homeowner is hosting the open house, they’re likely an agent hoping to find potential buyer clients. If you’re already working with an agent (or if you have no real interest in buying), be honest.

Check for damage and disrepair

Professional or edited photos can make a home look a lot better online than it is in person. At an open house, take the opportunity to closely evaluate a home’s condition and take note of any potential defects that would factor into your offer price. 

Assess the windows: Look for flaking paint, misaligned sashes and condensation due to air leaks. These could be signs of windows that need replacement. 

Check for water damage: Look for warped baseboards, ceiling stains and musty smells. 

Make note of cracks: Noticeable cracks in the ceiling or drywall could indicate foundation issues. 

Test functions: Open cabinets, doors and drawers. Run the faucets. Check the water pressure. An open house is a good opportunity to make sure every part of the home is in good working order. 

Gauge potential renovation needs: Home improvements can really add up. As you walk through a home, keep an eye out for urgent renovation needs like floors, fixtures or large repainting projects.

Open house tips for buyers

Whenever you attend an open house, put yourself in the seller’s shoes — you’re letting a bunch of strangers walk through your home while you’re not there. While every seller wants their open house to net a buyer, they also want to keep their home safe and their furnishings free of damage.

Do

  • Take off your shoes or wear booties if requested.
  • Greet the host and provide your name.
  • Sign in if necessary or requested (this is a safety issue for the seller and their agent).
  • Take notes on your phone about your likes, dislikes and follow-up questions.
  • Ask if you can capture a video (if the listing doesn’t already include a video).
  • Respect other buyers and guests. 
  • Wait for others to exit a room before you enter.
  • Provide feedback if requested.
  • Thank the person hosting the event.

Don’t

  • Refuse to comply with an agent or homeowner’s house rules.
  • Criticize the home or the owner’s style.
  • Listen in on other visitors’ conversations.
  • Touch the owner’s belongings.
  • Let kids run around without supervision.
  • Bring food or beverages in (except water).
  • Reveal information that would compromise your negotiating power, like your budget or level of interest in the home.
  • Bring pets.

*Zillow Group Consumer Housing Trends Report 2019 survey data

Source: zillow.com

What Are Comps? Understanding a Key Real Estate Tool

Whether you’re buying or selling a home, comparing similar homes can yield a wealth of helpful information.

“Comps,” or comparable sales, is a term anyone on either side of a real estate transaction should know well. It refers to homes located in the same area and very similar in size, condition and features as the home you are trying to buy or sell.

Buyers look at comps when deciding what price to offer on a home, and sellers use comps to figure out how to best price their home for the market. Real estate agents look at comps all day long as a way to keep on top of their local market. If you are a buyer or seller, it’s helpful to have a strategy to analyze comps, because all comps aren’t created equal.

Location is the highest priority

If you are trying to price a home or figure out its value, you need to look nearby. The market is based on location, so keeping as close to the subject property as possible — meaning, within the same neighborhood — is the most effective approach.

If you can’t get enough comps nearby, it’s fine to keep expanding out. But there will always be a boundary, like a school district, that you need to stay within.

Timeframe matters

The best comps are homes that are currently “pending.” Why? Because a pending home is a piece of live market data. A pending home means that a buyer and seller made a deal, and that deal will reflect the most up-to-the-minute stats on the market.

A good local real estate agent, leveraging her network, can get a fairly accurate idea what the ultimate sale price or range is for a pending deal. Try to stick with sales in the past three months, and never go more than six months, because older data is not reflective of the current market.

Factor in home features

Once you have location and timeframe, it is key to look for homes with similar features that have sold, as opposed to comparing price per square feet. While the latter is helpful, it won’t consider factors like views, a new designer kitchen or a finished basement vs. unfinished.

If you have all three bedrooms on the top floor, look for something similar. Try to compare your subject property to like properties when it comes to traits like total size, the number of bedrooms and bathrooms, and the size of the lot. You can make adjustments once you have found similar homes.

Don’t overanalyze the comps

Putting your trust in a good local agent will keep you from agonizing over the petty details of each comparable home. Your agent is likely familiar with some of the recent sales, and can help shed light on why one comp fares better than another. You may not know that one home was next to a fire station or across from a parking lot, or that another didn’t have a real backyard, but your agent will. These small nuances will affect the home’s value.

Find your home on Zillow to see your Zestimate® home value with your comps.

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Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

Source: zillow.com

How to Find Your Dream Home

Ready to start searching listings and hitting open houses? Save yourself some time by first identifying exactly what you need and want in a home.

You’ve been pre-approved and know what you can afford, so it’s time to start home shopping. But the hunt for your dream home will stall rapidly if you don’t know what that “dream” looks like.

It’s easy to talk in generalities about wanting a “big” house or an “older” home. But in order to better target your real estate search, you must think specifically about your dream dwelling. Will your “big” house be 2,400 square feet or 5,000? When you say “older” home, do you mean one built pre-1900, or pre-1980?

Before you visit another open house, sit down and make a list of your needs and wants — and yes, those are two different things. You may want a pool, but you probably could live without it. (Plus, it’s worth considering that having a pool could raise your home insurance costs.)

Understand that your requirements list will likely change as you learn more about your housing options. Proximity to the beach may start as a priority, for example, but once you see the size of ocean-front homes you can get in your price range, you may decide a short drive to the water is quite bearable. Unless you have an unlimited budget, it’s likely you’ll need to make compromises along the way.

Use these questions to help make your very own list of housing requirements.

Find-Your-Dream-Home-Blog-r2

You should also take time to rank specific home features as “Must Have,” “Like to Have” or “Don’t Care” using this printable checklist. Identifying your priorities will help you find the perfect property.

Once you know what you’re looking for in a home, you’ll be ready to find the right agent to partner with for your search.

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Source: zillow.com

What is Tax Assessed Value, Tax Appraised Value, and Market Assessed Value?

What is the value of your home? It depends on what you mean by “value.”

Tax assessed value

This figure varies throughout the U.S. since it is determined by the taxing authority of the city, county, or state where you live. Sometimes it is the same as the market assessed value and other times counties will multiply the market value by an assessment ratio to get the tax assessed value, which is often lower than the market assessed value.

For example, suppose where you live, homes are assessed at 100 percent of market value. If you have a home that has a market value of $150,000, your home will be assessed at $150,000. However, if your taxing authority assesses homes at 70 percent of value, your $150,000 market value home will have a tax assessed value of $105,000.

Tax appraised value

This is the value of real or personal property based on the valuation established by a government tax assessor.

Market assessed value

This is the price the government tax assessor estimates the property would sell for on the open market as of the effective date for the assessed value for the year in question. The assessor’s market assessed value is based on actual historical sales of similar properties for a specified study period.
For example, a market assessed value with an effective date of January 1 may have been determined considering comparable sales during the previous 12 months ending September 30 of the previous year. Sales study periods vary by assessment jurisdiction. Because historical sales are used, assessed values are typically less than current market values.

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Source: zillow.com