Home Inspection Checklist

Did Your Home Inspector Check the Essentials?

By Elizabeth Weintraub, About.com Guide

A home inspector will look under the sink to check the plumbing.

© Caylyn Wright Brown

Home buyers have it drilled into their heads that they need to get a home inspection. In California, for example, real estate agents advise home buyers to do a home inspection 15 ways from Sunday. Our purchase contracts contain two pages that talk about doing a home inspection, and those two pages are repeated in the buyer's broker agreement. That's just for starters.

A home buyer does not close escrow without hearing about the need for a home inspection. But what does a home inspection report disclose? Home buyers are often clueless about home construction and its components, and have difficulty deciphering home inspection reports. Many don't know how to figure out which types of defects are serious or whether their home inspector checked all the essentials. But, by George, they got that home inspection!

Home Inspection Checklist Comparisons

All home inspections are different and can vary dramatically from state to state, as well as across counties and cities. Much depends on the home inspector and which association, if any, to which the home inspector belongs. Because I am most familiar with home inspections conducted in accordance with the standards of practice established by the National Association of Certified Home Inspectors, the following information is based on NACHI guidelines.

Home Inspection Checklist of Items Not Inspected

Understand that California home inspectors are not licensed, nor are they licensed in many states. However, a home inspector's standard practice typically does not include the following, for which a specific license to inspect and identify is required:

• Asbestos
• Radon, Methane, Radiation and Formaldehyde
• Wood-Destroying Organisms
• Mold, Mildew and Fungi
• Rodents
• Lead

General Home Inspection Checklist Items

• Structural Elements.
  Construction of walls, ceilings, floors, roof and foundation.
• Exterior Evaluation.
  Wall covering, landscaping, grading, elevation, drainage, driveways, fences, sidewalks, fascia, trim, doors, windows, lights and exterior receptacles.
• Roof and Attic.
  Framing, ventilation, type of roof construction, flashing and gutters. It does not include a guarantee of roof condition nor a roof certification.
• Plumbing.
  Identification of pipe materials used for potable, drain, waste and vent pipes. including condition. Toilets, showers, sinks, faucets and traps. It does not include a sewer inspection.
• Systems and Components.
  Water heaters, furnaces, air conditioning, duct work, chimney, fireplace and sprinklers.
• Electrical.
  Main panel, circuit breakers, types of wiring, grounding, exhaust fans, receptacles, ceiling fans and light fixtures.
• Appliances.
  Dishwasher, range and oven, built-in microwaves, garbage disposal and, yes, even smoke detectors.
• Garage.
  Slab, walls, ceiling, vents, entry, firewall, garage door, openers, lights, receptacles, exterior, windows and roof.

Home Inspection Checklist Items Needing Service

Home inspection reports do not describe the condition of every component if it's in excellent shape, but should note every item that is defective or needing service. The serious problems are:

• Health and safety issues
• Roofs with a short life expectancy
• Furnace / A/C malfunctions
• Foundation deficiencies
• Moisture / drainage issues

Home Inspection Checklist Items Sellers Should Fix

If you have a choice, it is smarter to hire your own contractors and supervise repairs. Before issuing a formal request to repair, consider the seller's incentive to hire the cheapest contractor and to replace appliances with the least expensive brands.
Although home inspectors are reluctant to and, in many cases, refuse to disclose repair costs, call a contractor to determine the scope and expense to fix minor problems yourself. No home is perfect. Every home will have issues on a home inspection. Even new homes.
A repair issue that will be be a deal breaker for a first-time home buyer, causing the buyer to cancel the contract, will not faze a home buyer versed in home repair. Talk to your agent, family, friends and call a few contractors to discuss which types of defects are minor. Perhaps a simple solution is available such as replacing a $1.99 receptacle, which can resolve many outlet problems.
Pat yourself on the back, too, for getting a home inspection. Some buyers feel a home inspection is unnecessary, especially if they are buying new construction. If a light switch doesn't work or the air conditioner blows out hot air, those are problems you can see and test. The problems that aren't readily identifiable to you such as code violations, a furnace that leaks carbon monoxide or a failing chimney, are the types of defects a home inspector could identify in a new home. Builders' contractors make mistakes, too.

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FICO Questions Answered: Fair, Isaac CEO Reveals 3 Key Ways to Improve Your Score

Posted Jan 11, 2011 03:59pm EST by Daniel Gross

 

Updated from 3:59 p.m. EST
Many people have questions about the credit scores generated by Fair, Isaac & Co. Today on Tech Ticker, Aaron Task and I figured we'd take our questions straight to the source: Mark Greene, chief executive of Fair, Isaac & Co., creator and proprietor of the FICO score.
"The FICO score is a measure of a consumer's financial health and creditworthiness," Greene says. It's simply a number, ranging from 300 to 850 -- the higher the better. The average FICO score in the U.S. is about 700, and pretty much every bank in the country uses a FICO score when making lending decisions. But while the scores are important, they're not the be all and end all.
"Scores are meant to be one of several things bankers use in doing what we call sound underwriting," Greene says. Lenders should also be taking into account borrowers' background references, their capacity to repay loans, and collateral.
FICO creates the score simply by feeding numbers into its formula: "It's based on pure, statistical evidence, with no judgment or evaluation or emotion." The main factors Fair, Isaac takes into consideration are:
• How much total indebtedness a consumer has
• How long they've had the debt. "Newer relationships are riskier than things you've been paying over a long period of time," Greene says.
• How much available credit is being used: "If you're close to the edge on your credit cards, that's a danger signal."
• The mix of an applicant's credit portfolio -- is it all credit cards (bad) or a mixture of credit cards, a mortgage, and a car loan (better)?
Greene outlines three key ways through which people can improve their scores. First, pay your bills on time. Second, don't get close to the edge: "Don't use more credit than you really need." And third, don't apply for new credit unless you absolutely have to.
It may sound obvious, but the easiest way to avoid a sharp downgrade in your FICO score is to stay current on your mortgage and stay solvent. "One thing people should know is that a foreclosed home or personal bankruptcy is the most severe harm that you can do to your credit score," Greene says. FICO scores can fall by as much as 150 points when borrowers walk away from mortgages or declare bankruptcy; it can take up to seven years to rehabilitate the rating.
Greene helps clear up what may be some misconceptions about the way credit scores are calculated. For example, is it true that every time you apply for a loan it hurts your score?
"It depends on the kind of product you're shopping for," says Greene. With car loans, for example, Fair, Isaac understands that people shop for rates. "If you apply for five different car loans within a couple of days, we understand that you're looking to buy one car at the best rate. And there's no adverse impact on your credit score."
On the other hand, when people apply for five different credit cards in the space of a week, they're usually seeking to open multiple accounts simultaneously. "In those situations we will take a few points off someone's FICO score because we're worried they're sending a signal that they need too much credit."
Is it also true that people who have little or no debt may find themselves with lower credit scores? That can be the case. "Warren Buffett used to say that he didn't have a particularly high credit score," says Greene.
Consumers can obtain their FICO score from the company at myFico.com. (Editor's note: Greene says the report is free in the accompanying video but you must register to receive your FICO score and a payment is required.)
Greene also points to a just-launched website, scoreinfo.org, that helps people understand how credit scores factor in this new era of financial regulation. As of January 2011, you have the right to receive your score any time a lender makes certain kinds of decisions -- e.g., if you're denied credit or given credit on less than the most favorable terms a lender offers.
In the U.S. economy today, people may frequently find that a credit score is being used by companies to make decisions that have nothing to do with credit. Credit scores have become part of the application process for jobs, car insurance, and health insurance. Greene notes that the credit score can be useful in non-lending contexts: "People who are good with their finances frequently turn out to be good drivers." But he reiterates that they were designed for a purely financial use.

How to Ensure Your Success

 

by Dirk Zeller - Thu, Jan 6, 2011

 

There are as many models, trainers, and philosophies of how to be successful in real estate as there are people. Each one of these people, including myself, has strong beliefs on the path one must take to be successful. The truth is there isn't just one pathway to achieving success in real estate sales. There are a number of ways to prosper in the business. That is one of the exciting aspects of real estate sales. If anyone (Agent, Trainer, Manager, or Sales guru) tells you his or her way is the only way, run the other direction.

The real question is what will be your way? There is a right model or right pathway for you based on your experience, database size, market, commitment level, behavioral style, sales skills, and competitive nature. The way to ensure your success is to evaluate your unique factors I just listed and build your business in a complementary way.
For example, for the last ten years, we have been the leader in behavior assessments in the real estate industry. Through working with thousands of Agents and benchmarking their behavioral style, we have discovered patterns in how the different behavior styles can build a business that is effective and comfortable for them.
Not everyone should call FSBOs and expireds as some Trainers profess. In fact, there are a few behavioral styles that the success rate in prospecting to those sources is so dismal that it would be counter-productive. There are other behavioral styles that are so competitive and focused that they struggle to create referral-based relationships even when they go to numerous seminars to learn referral techniques. Some Agents sell more effectively by using facts and figures, while others use emotional connection and emotional techniques.
Being able to build your business around your natural gifts and natural skills that were given to you at birth and that you have spent years perfecting is the mark of a Champion. I once had a client who was frustrated because he didn't generate as many referral leads as his friend whom I also coached. Both of Agents were Champion Agents in their market. It really gnawed at my client, Eddie, that he couldn't generate as many referrals as Fred. When he finally shared that with me, I told him he needed to get over it because he would never get as many referrals as Fred. After he calmed down, I explained that his intensity and focus, based on his behavioral style, was not as relational and people oriented as Fred's. The outcome would be fewer referrals no matter what he did.
Because of his high desire for competition and intensity, I convinced him to try working expireds. Within weeks, he was taking at least six listings a month from working expireds. He started loving his business and was less frustrated. We then put a new Assistant on his team to love on his past clients and sphere and keep in frequent personal contact and ask for referrals. She had the same behavioral style as Fred, and the number of referrals increased by 25% in less than 60 days.
The way to ensure your success is to find your system, strategy, tactics, and lead generation and conversion sources. Too many Agents are looking for an off the rack solution in a tailor fit world. We need to be willing to pause, to evaluate, research, and design the right long-term solution. Anyone can do what he or she finds incongruent with their behavioral style for a short period of time, especially if they are broke. The problem is that it's not sustainable. When we have made enough money or feel comfortable, we stop doing activities we don't want to.
The search for your system and the perfection of that will ensure your success. It still means you need to attend seminars and training, listen to CDs, read books, and participate in coaching. If you work with a coaching company that is focused on helping you uncover your system, rather than forcing you into theirs, you have a higher probability of long-term success once coaching is completed. There is not one system or way to be successful in the real estate sales business.
The second step to ensure your success happens once you have made the best decision on how you are going to generate leads. For example: past clients; sphere of influence; strategic alliances with other professionals like Accountants, Financial Planners, Family Law Attorneys; community involvement; FSBOs; Expireds; REO properties. There are unlimited sources to choose from. Once you have finalized, stick with your decision. A Champion Agent tests the new strategies for a long enough period of time to modify the strategy a few times and test and monitor all of the results. A huge error I see most Agents make is the error of impatience. They change strategies and tactics so quickly that they never get past the steepest part of the learning curve. They are moving from one ice mountain to the next, trying to find the secret path to the top. It isn't there; you have to climb to the top.
Most Agents try a farm for three to four months, don't get any business, and scrap the farm. They will try a new newsletter to their past clients and sphere for three to four months and decide that doesn't work. They will call FSBOs or expireds for a few weeks, not achieve the result level they want, and stop that practice. In order for you to know if something new you are trying works, you have to try it for at least six months. It takes that long to gauge the return on investment. It takes that long to tweak and perfect it. You won't get all the facts to make an informed decision if the strategy works or not before a six month period of time.

A Michigan Short Sale Will Be a Great Investment in a Few Years

A Michigan Short Sale Will Be a Great Investment in a Few Years

If you are looking for great investment properties in the residential real estate market, consider a Michigan short sale. We've all heard the dismal news coming out of the auto industry, and Michigan has one of the higher foreclosure rates in the US, brought on by aggressive lending and the weakness in the job market in Michigan. Normally one picks markets that show promise of coming back soon, but the values of a Michigan short sale are compelling for investors.

Some of the home foreclosures and short sales in Michigan are incredible values. The market in Michigan will come back, especially once the auto industry starts to show signs of recovery in 2011. The auto bail out will eventually help, and the State of Michigan has put incentives in place to attract more alternative energy industries to the state. Since Michigan has a huge infrastructure already in place for durable manufacturing, once the wheels start to turn, any investor with properties that were purchased as a short sale or a home foreclosure will appreciate fairly rapidly. Jobs will eventually come back, and a property that was purchased for $40,000 to $70,000 will certainly gain in value once job-related housing demand comes back.

Buying a home now is a no-brainer

By Ali Velshi, CNN chief business correspondentDecember 13, 2010: 9:26 AM ET

(MONEY Magazine) --

Is now the right time to invest in a house?
Trick question. Actually, it's two questions.

Question No. 1: Is now the time to buy?
Question No. 2: Is buying a house a good investment?

The first answer is easy: With a few exceptions, if you have 20% to put down and good credit, now is a great time to buy. That's been the case all year, and I'd argue that we're probably closer to the end than to the beginning of the really great time. Let me explain.
Back in January home prices had dropped 28% from their peak. More important, interest rates were at historical lows. By locking in a mortgage for 15 or 30 years on a value-priced home, you were getting an incredible deal, even if home prices decreased. (I took my advice and bought a New York City apartment.)

 

Most (and least) affordable cities to buy a home

At the time, I thought that prices and rates were more likely to rise than fall. I was half right: Home values have been inching up since the spring, but mortgage rates, incredibly, dropped further.
By August (the latest numbers available) the median home price had risen 1% over a year ago, but 30-year rates had dropped a half-point to 4.5%. Assuming 20% down and a 30-year mortgage, the total cost of owning a median-priced home is now down $16,000 from a year ago.
Home values may waffle over the coming year, but because Americans take out such large, long mortgages, rates are what really matter. And I am more likely to grow hair than see 30-year mortgage rates drop below 4%. It's far more likely that rates (and the cost of ownership) will rise.
Now for question No. 2: Is a house a good investment?

 

CALCULATOR: How much home can you afford?

First, it depends on what you mean by investment. If your definition is strictly about dollars returned, a house probably won't be a great use of your capital. If you bought the median-priced house today with 20% down, to recoup your total costs (and I'm not including property taxes and maintenance here) over three decades, the home's value would have to rise about 3% a year.
That's likely, but you'll almost certainly (we all hope) do much better than that in the stock market. The fact is, however, that that's the normal case for housing; the booms that began after World War II and in the late 1990s were the exceptions.

Of course, there are places where you might do better. I bought my condo in Manhattan, a small island that, by virtue of the business done on it, has a sustained demand for property. And smaller, energy-efficient housing in cities or inner suburbs around San Francisco or Chicago is likely to be in higher demand than big, outer suburban homes with long commutes to Las Vegas or Atlanta.

According to urban and environmental planning professor William Lucy of the University of Virginia, this move toward urbanization in American housing is the reversal of a trend that's been in place since 1945. Keep it in mind when making your buying decisions.

That said, the key point to remember is this: Buying a fairly priced home at today's rates may be the best deal you will ever get. And who knows? It may even turn out to be a good investment.  

Winter Home Projects

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