Posted on January 28th, 2017 No comments
You’ve just got an offer accepted on a home and now the hard work really begins. It’s time for your buyer’s inspections to determine if this really is the right home for you. It would be nice to depend on the seller for all this information. But the fact of the matter is, most sellers can’t recall everything that has happened in their home over the years. And quite often homeowners get used to the funny quirks of their house and don’t even notice them anymore. And sometimes sellers are not aware of issues that exist, and wouldn’t be able to disclose them anyway. Therefore, it’s crucial to hire the right inspectors to assess the home’s condition. Keep in mind, inspectors can’t always find everything. If the roof needs repair and it hasn’t rained in years, the inspector is probably not going to detect it. But if it rained recently and they can detect elevated moisture, then you are on track to discovering a potential needed repair.
The First Step is a Home Inspection
Buyer’s inspections run the gamut. I will provide you with a pretty comprehensive list below, but it’s always important to start with the general home inspection. The home inspector will give you an overview of the home and then indicate where there may be a need for additional inspections or experts. The home inspector will look at the foundation, roof, plumbing, electric, appliances, water fixtures, doors, windows, and general condition. They will report any discrepancies or issues that they see. The home inspector is a generalist however. If they think there is an issue with the roof or some cracks in the walls look suspect, they will make a note of it and then recommend that you bring in a roofer or foundation inspector, respectively.
When I am working with a buyer, the buyer’s inspections that I always recommend, at the bare minimum, are the home inspection, mold inspection, and termite inspection. As I stated above, the home inspector will give a good general overview of the home. A mold inspector will focus on moisture elevation, water leaks, and well… mold. The mold inspection is so crucial because leaks often occur that no one is aware of. Left unattended, water can lead to wood damage and mold which of course carries health concerns with it.
The termite inspection is also a smart move. As the buyer, you want to know about any dry rot, wood damage, and termite infestation. It’s so much easier to tent a house for fumigation before you move in. Termite repairs, as all repairs, can be negotiated with the seller.
If it’s an older home with mature trees, then I also suggest a sewer line inspection. Quite often tree branches penetrate the sewer line because they are searching for water. They can cause quite a bit of damage and can be costly.
Best Practices for Your Buyer’s Inspections
Schedule your buyer’s inspections on the same day with some overlap in time. You want to be able to speak with each inspector separately, but it’s also a great idea to have the inspectors at the property at the same time so they can share information. I find problem solving more effective when different experts can share their perspectives. Recently, I had a client who was buying a house in the Hollywood Rivieria in Torrance, CA. The inspectors detected a high level of moisture all along the base of an exterior wall within an enclosed patio. Each of the inspectors had a theory on where the moisture was coming from. There was no nearby plumbing and the crawl space underneath the house was dry. Getting to the bottom of this mystery was important in order for my clients to know if it was a singular incident or an ongoing problem that could prove to be expensive to correct. In this instance, we ended up bringing in a water intrusion specialist. He determined that the dark stains on the floor were probably from potted plants that had sat under the windows even before the patio was enclosed eons ago.
These plants had probably been overwatered causing the dampness and elevated moisture. The deceased owner’s children confirmed this when they disclosed that their mother kept plants under the windows as long as they could remember – even when they were kids and the patio was an outside space. They also mentioned that they had asked their mom’s aide to stop overwatering the plants only a few weeks prior. Mystery solved! My clients could move forward knowing that there wasn’t a moisture issue to contend with.
Here is a partial list of buyer’s inspections for you to consider when buying your home: General Home Inspection, Wood Destroying Pest Inspection, Mold, Foundation, Sewer Line, Roof, Electrical, Plumbing, Lead Based Paint, Methane Gas, Asbestos, Pool/Spa, Chimney, Square Footage, Permits, Boundaries, Soils, Radon Gas
Not all inspections will apply to every property and some will only come up if there are red flags on the home inspection. But it’s a good idea to know what type of inspections are available and what information you want to gather when buying a home.
Posted on January 10th, 2017 No comments
Conforming loan limits for Fannie Mae have increased for 2017!
With the increase in housing affordability in the real estate market, conforming loan limits have increased for the first time since 2006. Here are the new limits for Fannie Mae loans for 2017 in Los Angeles county:
Conforming Loan Limits
1 Unit: $424,100
2 Units: $543,000
3 Units: $656,350
4 Units: $815,650
Conforming Loan Limits for High Cost Areas
1 Unit: $636,150
2 Units: $814,500
3 Units: $984,525
4 Units: $1,223,475
What does this mean for home buyers? Buyers have an opportunity to borrow more money (with a Fannie Mae product) which is good news since home prices have continued to climb since the market began its rebound toward the end of 2012. In fact, for the first time since the Great Recession, the average US home price has returned to pre-market crash levels. With the real estate recovery, the conforming loan limits should continue to have increases on an annual basis.
There is also talk about interest rates increasing over the next year. They have already ticked up above 4% for the first time in a couple of years. For those home buyers who are at their maximum borrowing power already, any additional rate increase could prevent them from getting a loan. And if rates continues to climb, it could have a slow down effect on the market, and ultimately put downward pressure on prices. But for now, for homes priced at $1.5 million and below, the tight inventory and high demand has continued to push prices up.