Home Inspections

It seems the subject of home inspections, who does home inspections, why, what is inspected, are all questions both Buyers and Sellers have. Are those questions properly addressed? Although Real Estate Agents are not licensed to give opinions on the condition of the home and property, they should be able to explain the highlights of each inspection, or at least point homeowners and buyers in the right direction for answers about home inspections.

The state of Wisconsin has released a new set of forms Sellers should be filling out when it comes time to sell their homes and property. The new Wisconsin Residential Condition Report asks the homeowner questions about the home including roof, foundation, electrical and plumbing systems, and other aspects of the home. Let’s look at the roof. Most homeowners have not been on their roofs. Unless the roof has a leak, or is obviously in need of repair, the average homeowner has no idea what condition the roof is actually in. How does the homeowner answer the question on the state condition report? The best answer may be, to the best of their ability. It is not an answer from a trained professional, but an answer based on experience the seller had with the roof. The same goes for other questions on the state form.

I have to tell you, the state of Wisconsin does not allow Real Estate Agents to guess at the condition of the property nor tell sellers what or how to fill in the Residential Condition Report. What Real Estate Agents can do is point people in the right direction for answers. In this case a pre-listing home inspection by a state licensed home Inspector may be the right ticket.

It may be a scary feeling for some people to call in an inspector to look over their home. The home inspector may uncover something the homeowner didn’t know about that may cost money to repair. On the other hand, what happens after the Seller accepts an Offer to Purchase and the Buyer decides to hire a home inspector? Now the home inspector is working for the Buyer. Does that make a difference? It shouldn’t. But there can be difference down the road as the sale of the house goes through the process.

If the sale of the property is contingent on a loan, the lender sends out an appraiser that may uncover defects. In most cases those defects have to be corrected before the loan is approved and the sale can close.

Certain loans require some sort of verification that the work is complete and the issues corrected. The easiest, most reliable, and quickest way to provide verification the defects have been cured is to have the state licensed home inspector look over the repairs and write an amendment to the inspection report. In many cases the underwriter working on the loan is looking for verification from the licensed home inspector. The problem is, many home inspectors change fees to reinspect and write amendments. If the Buyer chooses not to send their home inspector back to the properly to reinspect, that can leave the seller in a difficult situation.

The Real Estate Agent working for the seller should monitor the repairs and request lien waivers from all the contractors involved. In some cases the underwriter may accept lien waivers as proof the repairs have been made. If that is not enough, the seller may have to provide pictures, a letter from each contractor, or other proof. The list could go one forever and take weeks to solve an issue that should have been solved with a simple amendment from the home inspector.

When the home inspector is hired by the Buyer, problems may come up. The Seller has little or no control. But if the Seller hires a home inspector to perform a pre-listing home inspection, the inspector, verification, and amendments are only a phone call away.

A pre-lising home inspection paid for by the seller could in fact save a lot of time, money, and aggravation on certain houses. A pre-listing home inspection is something every seller should consider.

It’s been seven years since the EPA passed new laws to protect people from carbon monoxide build up in homes. But when are they going to introduce rules in line with locating the cause and stopping the source until repairs can be made?

I used to work as an engineer designing industrial ovens. CO detectors were placed where they needed to be, close to the source of CO, in the oven itself. The CO detector was wired into the oven electrical system. When CO exceeded safe limits, the detector sent a signal which closed the gas or fuel valve, eliminating the danger, and sounded an alarm. The problem was repaired, tested, reports filled out, and everything returned to normal.

Why didn’t the EPA pass a new law that mirrored industrial standards by requiring all combustion products to have CO detectors and safety procedures? Many homes have three levels which now require three CO detectors. Most homes have three appliances using combustion, gas stove, furnace, water heater. Many homes also have gas fireplaces. The problem now is, what happens when the stand alone CO detectors sound an alarm? That’s all they do is sound an alarm. Stand alone CO detectors do nothing to eliminate the problem or tell you where it is. That means the house is unsafe to enter until the problem is detected, repaired, and tested. This could get expensive.

Why did the EPA avoid laws requiring manufactures of combustion appliances to install CO detectors where they are needed? If an oven malfunctions, that alarm would sound, and shut of fuel, making the area safe after it is ventilated. If the furnace has a problem, the CO detector on the furnace will sound and turn off the fuel supply.

Carbon Monoxide Testing In Homes
Carbon Monoxide Detector

The system we now have can require expensive testing, and opens the door to fraud, contractors repairing appliances without defects. Does the fact most of our appliances are manufactured overseas have anything to do with the way that law was structured? What are the failure rates in newer appliances compared to older models? Why didn’t insurance companies step in and demand law makers follow guide lines established in the industrial world? As usual, there seems to be more questions than answers.

I was on the phone with a friend today. He was just walking into a house he won on an online Real Estate auction. As he walked through the house he told me, they removed the doors, counter tops, plumbing fixtures, sinks, light fixtures, ceiling fans, air conditioning units, and a host of other items. The house was stripped clean.

As a licensed Broker in the State of Wisconsin, we receive hours of training on auctions. State licensed auctioneers have pages of laws to abide by, and are required to provide specific documents to potential buyers. Online auctions often consider themselves immune to state laws. In this case, I can’t be sure what happened, who removed those items, or what the motive was. All I know is, that sale did not involve a standard state approved Offer to Purchase covering exactly what fixtures are is included in the sale of a house in writing. This is a good lesson to learn, state approved contracts are designed to protect both parties involved in the sale of Real Estate. Auction or bidding sites may or may not use standard Real Estate contracts. Auctions run by state licensed auctioneers have certain protection for buyers. Online Real Estate auctions may or may not be conducted by state licensed auctioneers. Why take the risk?

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“It’s not having the ability to see into the future, what matters today is the experience to see problems before they become issues and delays.”

Having trouble closing an accepted offer on your house? Most people, buyers and sellers have seen that problem over the past few months. Stricter lending laws have made closing a much more difficult task in 2016. This is a challenge for great Real Estate Agents to rise to the top.

One of the goals these days is to pass the appraisal with no issues or flags. This is the area great Real Estate Agents need a reliable, experienced team of experts. There are two ways to approach this challenge. One is on the buyer’s side. The other is on the listing, or seller’s side.

Small items can be more than a thorn in the side of Real Estate Agents and well as Buyer’s and Seller’s. Today a Real Estate Agent has to be able to look at a long list of potential issues, identify possible problems, and rectify them before they become major problems. Missing one little detail can delay a closing by weeks. Little issues have been costing sellers hundreds of dollars in last minute repairs. In some cases, those issues have resulted in denied loans. In today’s market, that equates to the loss of hundreds, maybe a $1000 loose or more for Buyers.

How to avoid those problems. You need a team of excellent lenders, inspector, and at times, contractors. Selling a home today reminds me of my days as a project engineer. When we first started a now job, we’d identify the set process for that particular project. We then followed the written procedure to the letter. Every step was outlined and followed step by step to ensure success.

Coping with Changes in Real Estate Today

Today there are four types of sales that will close. Cash offers. The perfect home with no issues. Properties with small issues the seller can resolve, or has money to pay contractors to resolve and loans involving repairs completed after the sale and closing. This places the repairs in the hands of Buyers. Repair loans require the most amount of works and preparation.

203K Rehab Loans

203K loans can be tough to close. In many cases, 203K and other rehab loans fail, because lenders and Real Estate Agents fail to follow the proper procedures. There is a set procedure. Trying to skip steps can and will result in additional cost and time. Substantial delays may result in the loss of the sale.

Today more than ever, a great team, proper planning, and the right procedure are the key to success. The old system only works for the perfect homes, and seller’s with the ability to make necessary corrections and repairs. Even in those cases, minor issues can cost sellers hundreds of dollars. At the very least, small issues may lead to unforeseen delays. Avoiding those issues should be the goal of every Real Estate Agent. The days of a quick 10 minute visit, sign the listing contract, handshake, and out the door Listing Agents are in the past.

Even in the cleanest, best maintained homes, options should be considered. Very important options that could save time and money as the sale progresses. The particular process depends on the condition of the home. The list of potential issues is too long to display here. The fact of the matter is, that list comes from experience, and is rather fluid, or changes as those new lending rules settle in. I can tell you one thing. Make sure you deal with an experienced Real Estate Agent who makes it a point to attend every inspection. If they haven’t accumulated that knowledge and experience over the years, they’ve placed themselves on a long, steep learning curve.