Buying

Home Inspection 🕵️— to attend or not?

For most home buyers, having an inspection performed by a licensed inspector is a “no brainer”.  This is especially true if you don’t have a BIG comfort zone when it comes to home construction!  The cost generally runs somewhere around $450.  Now, that may seem like $450 extra you don’t have as you’re getting ready to come up with your down payment and closing costs, not to mention moving expenses and getting your new home set up.  But, if the inspection points up a major defect you’re not aware of, I guess I’d rather know that in advance rather than 3-6 months down the road.  So, I find most buyers benefit from having an inspection done, and it’s well worth the money.

Once that’s been decided, the next question is should the buyer attend the home inspection or skip it?  Like everything else in life, there are pros and cons.  Here are my thoughts on the topic:

PROS

  • Basically you’ll learn a lot about your future home.
  • You’ll learn where the electrical panel and main shut off valves are.
  • You’ll learn some things about how to maintain parts of your home that maybe you wouldn’t otherwise have been aware of.
  • You’ll get the inspector’s perspective on the significance of blemishes ( of which there will likely be many- dozens even, on average).

CONS

  • The process will take a half day of your time, on a work day.
  • It’s boring.  It’s a lot of standing around checking emails and Facebook while the inspector crawls through the attic and crawl space, test electrical outlets and water faucets.
  • It causes you to focus strictly on what’s wrong with the house.  Because of this, some lose sight of why they wanted to buy the house in the first place.  And with all the focus on what’s wrong it’s easy to lose perspective about the blemishes.  After all, we all accept blemishes in our homes, and when we go to sell there will be a list of blemishes the next inspector will find.  Heck, many of the ones on your inspection report will still be there when you go to sell.
  • And besides, within 24 hours you’re going to get a comprehensive report complete with colored photos detailing everything the inspector finds.

In the end, it’s entirely up to you.  There’s no harm or foul either way.  And it’s not a life or death question.  Personally, I find a good compromise is to attend the last half hour of the inspection.  This is what our friends at US Inspect recommend for experienced home buyers.  It allows you to take a look and hear what the inspector has to say about the house in general and about key issues.  That may make it easier for us to talk about the findings and to come up with a strategy to deal with those key issues.

For answers to all your real estate questions, give Indy’s Choice a call at (317)  625-0655.

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Are Corner Lots a Prize?

Just last week, I met with an older couple planning on selling their home.  They were wanting to downsize. As they were showing me around, they pointed out the upgrades they’d made and commented “And we have a corner lot.  It cost us to get it, but it was well worth it.”  In fact, they said that a couple times just to be sure I registered the point.

When we got around to talking about what they should price the house, the value of the corner lot came up again (with emphasis).  In their minds, the corner lot added at least a couple thousand dollars (2% of the overall value) to the asking price.

I wasn’t sold on the idea, as I’ve had many buyers skip past houses located on corner lots.  So, in these situations I make a list – – Pros and Cons – – asking myself “Do buyers prefer houses on corner lots or do they shy away from them?” Here’s what I came up with …

PROS

  • Corner lots are larger
  • Corner lots do not have a neighbor directly next door on one side (which can translate to having less noise from neighbors)
  • Circular drives are more often possible
  • If building, more flexibility on how to set the garage and driveway (side load or rear load)
  • In many locales, existing homes on corner lots are less expensive than interior lots!

CONS

  • Taxes may be slightly higher
  • Builders may charge a premium for the larger lot
  • Likely to have more traffic which parents are fearful of (and more traffic also means more traffic noise)
  • Corner lots typically have very small back yards, which parents don’t like because it’s often a challenge to fence the side yard or to keep an eye on children playing there

And a TOSS-UP

  • Because you only have a neighbor on one side, some people will say you have more privacy.  On the other hand, you have a lot more people staring as they drive by.

So, who’s right and who’s wrong?  Well, sometimes it just comes down to the lot itself.  More often it comes down to personal preferences.  But if you’re thinking about resale, and your potential buyer pool involves people with young children, then I suggest you keep looking.

When you are ready, give Indy’s Choice a call! – Bob (317) 625-0655

 

How to Best Tackle Appraisal Concerns

More often than not when it comes time to have the appraisal done with properties with acreage, there can be challenges. (Or should we call it really what it is – PROBLEMS).  That all has to do with $$$$$$$.  Most types of residential financing take a dim view of excess acreage, pole barns, outbuildings, and farming activity.  Think VA and FHA as two forms of financing that can be particularly tough when it comes to these items.  As a rule of thumb, residential lenders will not lend on a working farm.

But you ask, “That makes no sense!  Wouldn’t a lender rather have 10 acres leased out to a neighboring farmer, than have that land unproductive?”  And the answer would be “No”. The lender would rather it not be farmed.  And if the property has any outbuildings that cost $40,000 to build new, the appraiser and lender are only going to give $5-10,000 of value for it.  So, as you approach buying a property with acreage, you’re going to want to double check your financing strategy to make sure it measures up.

The GOOD NEWS is that there are lenders who will lend on working farms.  Think Farm Credit.  Maybe others if you can convince them that you will not be farming the property once you buy it.  Another factor that can make a difference is the size of your down payment.  Generally speaking, there will be more options if you have a larger down payment.  If your down payment is small or non-existent and you’re trying to buy a property with acreage, then you’ve got to bank on the property appraising for the sale price without a whole lot of value being given to the excess acreage.

Buying a property with these characteristics may take an extra dose of patience and persistence.  Know that this is not our first rodeo.  Having been in the mortgage business for 17 years, I can be in your corner coaching you over and around all of the challenges! Give us a call!