The opinions you will see here are my own. All material is copyrighted and is the intellectual property of Tom Allen and may not be copied, reproduced, or republished in any form whatsoever without the written consent of the author.

Mar 28, 2015

The Importance of a Professional Home Inspection

Posted by: TOM ALLEN

Professional Home Inspection

Have you ever thought about what’s behind the walls in your home?  Or what’s happening with all that metal equipment up in the attic?  You probably don’t think about these things very often—you just take for granted that everything is fine.  But you might be surprised, and that surprise will not be a welcome one if it appears the day after you move into your new home!

Prospective buyers have at least four opportunities to be sure that the home they decide to purchase is structurally sound and that all of its systems are in working order:

  • The First Impression – Pay attention to everything when you walk through a home.  Many buyers look only at superficial things like paint, carpet, and landscaping.  These can be easily replaced or changed.  Other, more serious issues may be hiding in plain sight.  Look carefully, and ask questions!
  • The Seller’s Disclosure – This document should always be offered to a prospective buyer.  It is the seller’s written statement of the condition of the home.
  • The Professional Home Inspection – Every home buyer should have a home inspection.  Period
  • The Final Walkthrough – This is the day before or the day of the closing, and it is your last chance to ensure that all requested repairs have been made and that everything is in working order.

So, let’s talk about that professional home inspection.  Inspectors are well trained and experienced professionals who have completed a rigorous training process which includes an apprenticeship as well as a state-certified licensing test.   Many of them have backgrounds in either engineering or home construction.  Either way, they know their way around a house and can spot problems the average consumer would never recognize.

This is the very best defense against some very nasty (and expensive) surprises.  A professional inspector will spend about a half day in the home you are considering.  He will turn on every light switch, test every electrical outlet, run the dishwasher, test the oven temperature, flush every toilet, open every water tap and inspect every drain pipe for undetected leaks.  And that’s just the first hour!  Inspectors are required by law to give the home a thorough “going over” and to provide you with a detailed report which includes the good, the not-so-good, and the dangerous.

For example, the inspector will perform a thorough examination of the home’s exterior, looking for problems with shingles or other roofing components, gutters, bricks and façade, trees too close to the home (a potential hazard due to insects), and most important of all—the foundation.  If the home has a pier and beam foundation, the inspector will probably crawl around under the house to ensure the structural supports are doing their job.  For a concrete foundation, the inspector will watch for soil grading and drainage to avoid future foundation damage.

Back inside, the inspector will turn his attention to the attic, where he will look at the interior structural components of the roofing support system, ventilation, and insulation.  He will look for evidence of existing or previously-repaired roof leaks as well as damage or infestation by insects.  Finally, he will carefully inspect the heating furnace and the air conditioning evaporator coils.  His report will include photographs and his professional opinion of the age, condition, and remaining useful life of the equipment.  He may make suggestions for minor repairs that could extend the life of these expensive systems.

And that’s not all!  The inspector will examine the water heater and the electrical box to point out potential hazards before they become serious.  There’s more, but you get the idea.

Here in Houston a professional inspection usually costs about $350-400 for an average home.  His report is generally delivered over night, and a good inspector will be available to answer any questions you may have.  (My favorite inspector actually reviews the report with the buyer on the spot from his laptop just as soon as his inspection work is completed.)  The inspection report can reveal repairs to be negotiated with the seller, or it may reveal nothing significant at all.  Either way, considering the investment a buyer is making in buying a home, the time and money spent for a professional inspection is definitely a bargain!

So when your Realtor brings up the subject, take advantage of the opportunity to schedule a professional inspection and learn as much as you can about your new home.  You’ll be glad you did.

Mar 22, 2014

What's Pre-Approval?

Posted by: TOM ALLEN

Loan Pre-Approval

Unless you are fortunate enough to be in a position to pay cash for your home, you will have to go through the loan process.  This is where significant changes (effective January 1, 2014) have made the process more complex than it used to be.  Even if you have great credit and money in the bank, this can be a wild ride!

You may hear the terms “pre-approval” and “pre-qualification,” and you may hear them used interchangeably.  In fact, they are two very different processes.

  • Pre-qualification is a process that determines if a lender considers that you are likely to be successful in going through their loan process.  It is a “quick and dirty” look at your credit score and payment history.  It is not the green light you need to begin shopping for a house.  It is a marketing technique to get you into the office of a loan officer.

  • Pre-approval is an in-depth, detailed look at your credit history, credit score, and other factors that will give a lender (and you) a good idea of what you can afford.  A pre-approval letter will be issued by the lender indicating the amount for which you are “qualified” (the maximum loan amount for your home).

Some real estate agents will not show houses to clients who are not pre-approved; others will begin showing.  (I prefer pre-approval, but in most cases I will begin showing if the pre-approval process has begun.)

© 2014 Tom Allen, all rights reserved

Mar 22, 2014

Things Have Changed

Posted by: TOM ALLEN

Stay Calm!

Buying a home can be exhilarating, especially the first time.  The real estate agent and the loan officer are so friendly, patient, and helpful.  There is excitement in the air as friends, family, and neighbors offer congratulations, best wishes, and even premature farewells.  And let’s face it:  who doesn’t like to shop?  But after those first few signatures are dry, things can get tough…and  even tougher.

Home buying today is more complex than it was in the past.  Changes in real estate laws, lending guidelines, and the real estate market in general can conspire to make what should be a fun, joyful time seem like a what-have-I-done experience.  Stay calm…take a deep breath.  You really can do this!

Here are a few things you will need to do to get ready for the home buying journey:

  • Be patient.  No doubt about it—the process will take longer than you think it should.  (This is not like buying a car.)  From the time you make the decision to move-in day will be at least six to eight weeks, perhaps longer.  Do not make the mistake of thinking you can close and move in less than a month.  Unless you are paying cash, the just ain’t gonna happen.

  • Be disciplined.  It takes several professionals to get you through the process, and you will need their expertise.  Follow their instructions very carefully.  If you do not understand something, just ask.  Do not make assumptions and do not deviate from the instructions they give you.  Do not listen to well-meaning advice from friends, family, or your Uncle Bob who is a retired real estate agent...put yourself in the hands of your home buying team and do not be distracted.

  • Be timely.  There are serious deadlines in a real estate transaction, and they must be met.  Interest rates can change without warning and contract terms have consequences.  That document that you put off signing until tomorrow can cost you big money and can even cause the entire transaction to collapse.

  • Be organized.  You will have documents coming from several sources, and they are all critical.  Someone will ask you to submit something that you think you have already sent.  Set up a file with sections for contracts and addenda, loan documents, inspection reports, and perhaps other categories.  Keep detailed notes of names, telephone numbers, email addresses of everyone you speak with and the dates and times of each interaction.  You will be very glad you did.

  • Be strong.  Every home real estate transaction has potential for frustrating things to happen.  Some of the questions that loan officers will feel like an attack on your integrity.  Documents really do get lost and have to be resubmitted, and it’s no one’s fault.  Mistakes can happen—there are too many human beings involved!  When these things happen, try not to take it personally.  Take a deep breath, do what needs to be done, and keep your eyes on the prize—that beautiful new home.

The process for acquiring a home has changed, but if you go into it with reasonable expectations and some mental preparation, you will be just fine.  As a Century 21 agent, I am fully prepared to help you get through it!

© 2014 Tom Allen, all rights reserved

Mar 22, 2014

When you see it, buy it!

Posted by: TOM ALLEN

Under previous market conditions purchasing a home was a more leisurely experience.  That first whimsical thought of “I think it’s time to buy a house” set in motion a slow-moving process where one could take the time to view a few houses, take time to “sleep on it,” look at more houses, compare features, and eventually settle on one.   For desirable homes in the current Houston market, that strategy will result in frustration and disappointment.

When I moved here in 2000, my Realtor warned me that in my price range I needed to have my checkbook handy, ready to write that option money check just as soon as I saw the home I wanted to buy.  That slowed down a little, and then with the crash of 2007-2008 houses were just sitting on the market for months.  Now things are back in the fast-paced, quick action mode they were when I looked at my first house in Houston.

Inventory of desirable homes is at an all-time low, and buyers need to be prepared to act decisively when they find the right house.  (This is true across the entire spectrum of prices).  Serious buyers need to carefully consider the features that are important to them (number of bedrooms, bathrooms, location, etc.) and tweak their lists of “must haves” and “don’t wants.”  And it may be necessary to overlook that fuchsia bathroom when everything else about the house is perfect—it can be painted!

All this can put Realtors in a tough spot.  If we explain the market realities, buyers may get the idea we are “pressuring” them just to make a quick buck.  If we don’t, they are unhappy that we didn’t warn them that perfect house absolutely will go to another buyer if they take too long to think about it.

Buyers really can get their dream homes in a market where sellers have the advantage, but it takes planning, patience, and strategy…and a dedicated Realtor!

© 2014 Tom Allen, all rights reserved