Archive for the 'Inspections' Category

Real Estate Bargains: Getting the Best Buy Possible

Yesterday we highlighted four common myths that sometimes lead buyers to believe they’re getting a better deal than they really are. Today we’re sharing some thoughts about finding true real estate bargains.

Let’s just get this first point out of the way early. If you’re looking for a ridiculous value – a complete steal – then a real estate agent probably isn’t going to find it for you. You need to start pounding the pavement to track down leads on your own. You need to find sellers who are (1) just starting to think about selling their home, and (2) completely out of touch with the approximate value of their home and the real estate market overall. Because once they talk to a real estate agent, or begin to look at what similar homes are selling for, the pricing is going to be far more rational and efficient. You are effectively competing with agents for listings.

Okay, so if we agree that your buyer’s agent is not going to find you the deal of a lifetime, how do you find a good real estate deal?

1. Look at what everyone else is ignoring.
Buyers are currently fixated on fully updated homes. This is a big change from the middle of the decade when sweat equity was all the rage. As a result, there are some interesting opportunities in homes that are in desirable locations but need some work. Sometimes these homes can be money pits, but other times the main issues are cosmetic. Differentiating between the two can lead to very good investments.

2. Be flexible in your requirements.
The wider the range of possibilities that you are considering, the more likely you are going to find a seller willing to compromise on price. Consider multiple towns. Consider different house styles. Consider different bedroom and bathroom configurations. The more options you are open to, the more likely an opportunity will come your way.

3. Be ready, willing, and able to react.
Every now and then we come across a property listed in the MLS that’s a good buy. We tell as many of our buyer clients about it as possible, but most of the time it’s not a good fit for their needs or the timing isn’t right.

For example, last year there was a home in a popular neighborhood in West Hartford that turned out to be a very good buy. According to the group of agents who visited it with us on broker’s tour, it was initially listed about 10% too high. It was also listed late in the spring market. The sellers quickly lowered the price to the point it was fair, but nothing happened. Buyers had checked out for the summer and there were no offers. After lowering the price to about 8% below was we all initially agreed was fair, they got an offer. The property ended up closing more than 12% below what we thought it was worth, and more than 20% below the initial asking price. It was not a distressed home, just one that got lost in the shuffle due to poor timing and pricing.

4. Focus on more than just the price.
Most of the homes in Greater Hartford are more than 25 years old, which means that their original mechanicals are approaching the end of their useful lives. Time for a quiz! You have the choice of buying two houses that are virtually identical. Choice A is a home with fresh, tasteful paint, but older mechanicals. Choice B is a home with hideous wallpaper and shag carpet everywhere, but new windows, roof, and furnace. Both have dated, but functional, kitchens and baths. Both have the same number of bedrooms, baths, and total rooms, and both have the same asking price. Which do you prefer?

Most buyers gravitate towards the tasteful and pretty. They overestimate the amount of time, effort, and money needed for cosmetic issues and underestimate the value of the mechanicals. Not only will newer mechanicals allow you to avoid the cost of replacing them, they will also operate more efficiently and save you money every month.

The average real estate buyer and seller is much more knowledgeable today than ever before. Information available via the internet and traditional media sources help them understand the sales process and pricing, which in turn makes the overall market more efficient. Finding an unbelievable bargain is a real challenge. Most buyers are focused on making sure that they get a good buy if a property needs work, and at least pay a fair price if the home is in move-in condition. The key is to know what else is on the market, so you know if the price is right.

Nice Chimney!

Home inspectors almost always find something wrong with chimneys. They’re just not a part of the home that owners think about on a regular basis, so routine maintenance is often ignored. Sometimes they simply need to be cleaned, other times the outside needs repointing, and on occasion there are major structural issues. So when representing buyers, we’ll always sneak a quick peek at the outside of the chimney to see if it might lead to trouble. Here’s a quick quiz … which chimney has been recently been rebuilt?

Answer: The chimney on the left was recently rebuilt. All of the bricks are the same color, as is the mortar between the courses. There is no mortar missing, and the courses are lined up very neatly. The chimney on the right has a lot of things going on, starting with the plant life.

Beyond the visible portion, there are other ways that chimneys can need attention. Interior bricks experience the same decay as those outside the house, though less so since they are not exposed to the elements. There can also be problems with the flue, like cracked tiles, objects falling into the flue, or build-ups of soot and creosote.

Our three most recent deals all had issues with the chimney, and in each case the buyer asked the seller to address the problems. The cost of fixing chimneys can vary widely depending on what needs to be done and the location of the problem area. The work is labor intensive and may require building scaffolding or mechanical lifts if it is on the upper portion of the home. Fortunately, there are no moving parts to a chimney, so once it is properly repaired it should remain in good shape for years to come.

You may not have paid much attention to chimneys in the past, but I bet now you’ll take a quick look every now and then.

Inspector Shortage?

When a buyer purchases a home, they have the right to have certain inspections performed within a specified timeframe after the contract is signed. In our market, the window to have inspections conducted is typically anywhere from 7-14 days. Buyers want their right to understand any issues with the house and sellers want the review conducted as soon as possible so that they know the contract is continuing forward towards closing.

Often my buyers look to me for home inspector recommendations. When asked, part of my job is to provide a list of competent professionals that I know will look out for my buyer’s rights and do a thorough and professional job. Over the years, I’ve found some top notch inspectors that I greatly respect. They take their continuing education seriously and know the latest about changing building and mechanical system standards, safety, and environmental issues. They thoroughly inspect each home from top to bottom, whether it’s hauling themselves into tiny, sweaty attic crawl spaces looking for roof leaks and adequate ventilation or dragging themselves under decks to check for structural stability and evidence of insect infestation.

One of the trends I’ve recently noticed is that all of the inspectors that I normally recommend are scheduling about a week in advance. Previously my buyers could arrange to have their inspections conducted within 2-3 days of a contract being signed. Not now. They’re all booking well in advance and have been for weeks. Most have been doing their 2 inspections a day, 6 days a week and don’t see a let up any time soon. They all notice that the trend this year has been smaller, first time buyer starter homes, rather than the larger move-up houses.

So what does this mean for my buyers? Once they’re under contract I suggest they start calling inspectors as soon as possible to arrange for their inspections. We only have a limited time to get them completed and then submit requests for repairs to the sellers.

Meanwhile, I’m in the process of finding more inspectors to recommend, which is easier said than done. My expectations are very high, as there is a lot riding on these home inspections for my buyer clients. If something isn’t found during their inspection it can become a major surprise for them down the road, when they’re living in the house or when they need to resell. No one likes surprises when it comes to houses.

So I continue my search to expand my list of true professionals that I feel comfortable recommending. Hopefully the situation won’t get any worse because we’re already cutting it a little too close for my taste…

Planning Ahead for Outdoor Projects

Although the frequent snow and ice storms may suggest otherwise, spring will be here soon enough and bring with it the outdoor construction and renovation season. Towns in the Greater Hartford area and the State of Connecticut have a number of ordinances in place that homeowners need to be aware of as they plan this year’s projects. Whether you’re a weekend warrior or planning to hire a crew, make sure that you comply with any local, state, or national Historical Preservation Ordinances, the State Digging & Excavation Laws and your town’s general Licensing and Inspection Laws. Just a little up-front planning can prevent major headaches both during the work and after the project is complete.

Historical Preservation Ordinances

If you live in an older home that is within a Town, State, or National Historic District, you may need to follow Historical Preservation Ordinance guidelines when performing exterior renovations. For example, most of the homes in my neighborhood in the West End of Hartford are included in a National Historic District. There are multiple historic districts in the neighborhood, each representing a different style, size or age property. In an effort to preserve the historic and architectural character of the community, the City of Hartford established the Historic Preservation Commission to review work done on homes that are within national, state or local historic districts. All projects that are visible from the street and require a building permit need to be approved by the Commission.

One of the goals of the Preservation Ordinance is to help homeowners understand their options for maintaining their property in keeping with its original character. The City put together a set of historic preservation guidelines recommending the type of work that should be done on Hartford’s historic buildings. They cover entrances, masonry, paint, porches, roofs, siding, sites and windows, and can be downloaded from the City website. Most projects are expected to be approved by the commission’s staff, and to be turned around in a few days. More complicated projects are heard at the monthly Commission meetings, where either the homeowner or contractor presents the plan. Minutes posted online from recent meetings show that the Commission is willing to require changes to “finished” projects, so property owners that do not get preapproval for their projects proceed at their own risk.

Despite the potentially heavy handed regulations, the ordinance should provide two primary benefits to West End homeowners. It will help extend the life of our homes, and will help maintain the unique feel of our neighborhood. The Ordinance also considers the possibility that historical preservation may be too costly in some cases, allowing economic hardships and precluding work to be required that raises the cost of an improvement by more than 20%. All of this information and more can be found here.

Check with your town’s Historic Preservation division for specifics related to your neighborhood and home.

Digging & Excavation

After the planning is complete, be sure to find out where the buried utilities are located before the project begins. State law requires that the utility companies be notified before anyone uses equipment to dig on their property.

The homeowner first marks the project area on the ground using white paint or flags. The utilities companies will then mark the locations of the various services in a color (the website has a key for the color coding). At least two full working days notice is required, so homeowners need to plan a little in advance.

In Connecticut the company to contact is called “Call Before You Dig” and can be reached at 800-922-4455.

City Licensing & Inspections

Finally, most renovation work (both external and internal) needs to be reviewed and approved by your town. Since contractors will (hopefully) apply for permits on the homeowner’s behalf, the important point to remember is that an inspection is needed to close out all permitted work. Try to get the inspection done as soon as possible so that there is no confusion or uncertainty months, or years, later. See your local town’s website for the details or call the town hall’s Licenses & Inspection division for more specific information related to your projects.

I’ve had a number of interesting conversations with both sellers and the folks at Hartford Licenses & Inspections as I tried to understand the official status of projects. After working through the process a few times, I would strongly recommend keeping a list of contractors that have done work at your property and the inspectors that closed out the job. This information could be very important when you eventually try to sell.

Regular home maintenance and periodic upgrades are a fact of life for any homeowner. As you think about your next project, make sure that you are following any necessary Historic Preservation Ordinances, the Digging & Excavation Laws and the Town/City Permitting Laws. It may require a little extra time up front, but it will save time, money and energy over the long run.

Radon Testing My Home

Whenever my clients have a home inspection performed, I always recommend that they also have a radon test performed.

Radon is an odorless and tasteless gas that is released when uranium decays in soil and rocks. It is just about everywhere, at varying concentration levels. It can enter a home through cracks in the walls and floor of your foundation and collect indoors. It can also be released by building materials or well water. If people are repeatedly exposed to high levels of radon, it can lead to lung cancer. Radon is actually the second leading cause of lung cancer in the US and every year between 15,000 to 22,000 people die from lung cancer associated with radon. Scary stuff.

For some reason when I purchased my home, my agent never suggested a radon test, nor did the home inspector. Huh. So this past week I called up one of the inspection companies that I frequently recommend and asked that they perform a radon test on my own home.

Right now I have a continuous monitoring machine running in my basement, actively taking samples of the air every 5 minutes. After 48 hours, the inspector will come back and immediately give me the results.

The inspector could have alternatively performed a passive radon test with a charcoal canister. The cannister tests are somewhat less reliable and need to be shipped off to a lab for analysis. Also, these types of tests do not indicate if a homeowner left windows or doors open, interfering with the test results.

A continuous monitoring test alerts an inspector to interference. Not really an issue in my case for testing, but something to think about if you’re a homebuyer requesting one of these tests.

Tomorrow when the inspector drops by to pick up the machine and give me my results, I’ll be hoping they are below 4.0 picocuries per liter (pCi/L). Anything below 4.0 is deemed “safe” by the EPA. Anything 4.0 and over needs to be retested and, potentially, a radon mitigation system may need to be installed.

Keep your fingers crossed for a sub 4.0 reading, please…

UPDATE: Our radon test results came back at 2.1pCi/L, so no issues for the time being. Also, thanks to a loyal reader for a link to the Connecticut Department of Public Health’s list of radon mitigation professionals. The document also contains some good information on how radon mitigation systems work and a range of installation costs.

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