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.

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.

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…

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 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.

I can see a buyer walking into this house and being very impressed. It would be easy for a person to envision themselves living there, and not having to do a thing except move in.

I almost skipped looking at the basement of this home because it wasn’t finished. I’m glad I didn’t because there was something weird going on.

Have you ever seen one of these adjustable Lally columns in a basement? Maybe you even have one in your home to help provide some extra support where there is a little sagging.

I have one in my own basement. It helps support a sagging corner in my entryway.

This house had a lot of adjustable Lally columns.

So what does this mean for a buyer? Potentially nothing. I’m not a home inspector, nor a structural engineer. Based on what I’ve heard on various home inspection, these really aren’t supposed to be used for permanent support.

Just a friendly reminder…as a buyer, no matter how pretty the house, please consider having a home inspection conducted by a reputable professional. Not only will they educate you on how to operate your new home, they may also unearth some mechanical, structural, or safety issues that need to be addressed. A pretty house is no good if it’s not a safe place to live.

The home inspection negotiation is an opportunity for you, as the buyer, to have structural, mechanical, or environmental issues fixed, receive money credited toward your closing costs, and/or get a reduction in the purchase price from the seller. I say “opportunity” because there are no guarantees that you will get anything out of it, other than a report telling you about the status of your future home.

Here are my tips for getting more out of your inspection requests…

1. First things first, never insult the seller’s home. They may have years of emotional attachment associated with it and anything negative you say will just start closing the door to an amicable resolution. Pull statements directly from your inspection report and do not color it with your own emotion. For example, say “the furnace is near the end of its useful life” not “the furnace is an old piece of junk.” Be nice!

2. If you are suggesting that the purchase price be reduced or that you receive money to cover closing costs rather than having inspection issues remedied, you should have at least one estimate from a qualified contractor to support the amount you are requesting. Expect the seller to get their own estimates, which may result in a different (most likely lower) amount. Depending upon how different the quotes are, be prepared to negotiate the amount.

3. Support your request for fixes with pictures of the issues. It will let the seller understand that the problem actually exists and make it easier for the contractor to locate the specific problem.

4. Focus on major mechanical, structural, and environmental issues- don’t go after the piddly stuff. A seller is more likely to respect your requests if they know it’s something you can’t easily fix and need the assistance of a professional. If you’re asking the seller to put on new downspout extenders that can be purchased at Home Depot for $3, they’re most likely going to dismiss that request and it will reduce the legitimacy of your other requests.

The most important aspect of your inspection is that you hire a highly qualified inspector that will accurately identify issues. In a slow market, buyers will have an easier time getting their concerns addressed. And if you find that the seller is not willing to address your requests, there are plenty of other houses out there that will probably also meet your needs.

When inventory is high and buyers have a lot to choose from, the ball is in the seller’s court to try and keep the deal together through inspection. Here are a few hints as a seller that will hopefully help ease the inspection process and move you on to the next step, mortgage commitment…

1. Have your own home inspection done before you list your house and have any major issues taken care of before it goes on the market. If the home inspector finds problems with the electrical, plumbing, heating, or any other major system, have a licensed professional come in and fix the issue. Keep receipts of the work performed and provide them to the buyer prior to their inspection.

2. Offer a 1 year homeowner’s warranty to the buyer. If any of your mechanical systems are near the end of their life, a homeowner’s warranty is a great way to give a buyer peace of mind for the first year of their homeownership. These typically cost around $400-$450 for the seller and will be rolled into your closing costs.

3. If the inspector finds mold, have it remediated if the buyer requests it. If you refuse to have the mold remediated and the buyer walks away from the deal, you then have to disclose that there was mold found. This becomes a “material fact” so your agent, and you, must disclose it going forward. Future buyers will most likely either be turned off by this fact and not put in an offer or request that you have it remediated as an outcome of their home inspection. It’s best to just have it taken care of once it’s identified as an issue.

4. Have your furnace serviced and chimneys swept. If you benefited from a year of use (or more) of your furnace and chimney, have the proper service professionals come in and maintain them.

5. Stating that you are selling your house in “as-is” condition may not be enough. The buyer may still request that items be fixed or they have the right to walk away from the deal. I recently had a buyer receive 3% off the agreed to purchase price of a house because major items were found during inspection and he threatened to walk away. Once those major items become known, they become “material facts” to the next buyer. You may need to be able to withstand a buyer walking away or bend to their requests and issue credits or have items fixed.

As the market shifts to favor buyers more than sellers, home inspection becomes another benefit to the buyer. Proactive sellers can improve their chances of keeping a deal together if they follow some or all of the steps above.

Tomorrow I’ll outline some home inspection strategies a buyer can take that will help them maximize the current market environment.

The house is in a very desireable neighborhood in West Hartford. I walked around the first floor and the layout seemed to meet their needs. So far, so good. Then I checked out the upstairs. Good sized bedrooms and a master bath. Perfect, just what they’re looking for. I’m heading for the front door and then realize I should also look in the basement to see if the mechanicals have been recently updated. I turn on the light and a nice surprise, the basement looks finished. Ah, extra square footage, always a good thing. I walk down the steps and as I land on the carpet I hear “squish.” Huh, what was that? I take another step. “Squish.” “Squish, squish, squish.” The basement carpet is soaked.

Swell. Is a pipe broken? What is going on here? The listing office told me that the homeowner is gone for several days, so no one knows about the issue but me. Time to investigate to see if I can figure out what caused it and determine if it’s still actively flooding. Squish, squish, squish. Nope, the pipes seem fine. There are what appear to be older water stains on the carpet and the soaking area is below a basement window. Must be the gutters overflowed during the massive rainstorm we recently endured, directly into the basement window. I trek outside to see if my theory is right. Yep, there is gunk sticking out of the gutters and the mulch around the window well has been completely washed away. At this point I call the listing agent’s cell phone and leave a message for him explaining the issue, as I know the home is vacant for a few days. He never calls me back to acknowledge he received my message or ask me about the situation.

Before I left the house I picked up the Seller’s Disclosures that were provided. They indicate no issues with basement water seepage or dampness. But there was a dehumidifier in the basement, there were older water stains, and I just saw that it was flooded. My disclosure to the other agent has now made this a material fact, which means that, legally, he should disclose this going forward. Will this happen? Most likely not. Did I tell my buyers about this issue? You betcha. If they have any interest in the property I will urge them to get a mold test and ask for monetary concessions to deal with the problem.

This type of situation probably happens all of the time because disclosing an infrequent problem is unlikely to be seen and would only reduce the price a seller can get for the house. This type of deception is illegal, but likely happens on a regular basis because there is a stong financial incentive to do so. I was just fortunate enough to see the problem at its worst, so if my buyers are interested I can adequately protect them. This just illustrates the importance of getting a home inspection in order to further protect your future investment.

It’s becoming more and more common now that buyers are unable to get a home insurance policy on a home with knob and tube. What insurance companies were willing to insure just 2-3 years ago has changed. If your home inspection turns up knob and tube, the homeowner will most likely need to upgrade the system in order to sell the home. You won’t be able to get an insurance policy to satisfy your mortgage commitment otherwise. I’ve seen this issue pop up twice in the past week. The seller now has to upgrade the system before the closing in each case. If you’re a seller, you might want to consider having the wiring fixed even before you list your house for sale. You’ll head off potential issues.

If you’re not familiar with knob and tube, here are two good links that give helpful explanations of how the wiring works and why it needs to be upgraded. Ask The Home Inspector and Wikipedia.