Senior Loan Officer | NMLS #316198
Branch NMLS #1270689
Posted On July 18, 2019
It’s easy to fall in love with a home at first sight – there’s a reason they call it curb appeal! Looking beyond a beautiful exterior could help you find costly dangers lurking within. Some of the common reasons home sales fall through include pending permits, undisclosed insurance claims, pests, water damage, and structural damage. A home inspection should unearth most potential problems but doing your due diligence before you make an offer can also protect you from falling for the wrong home.
A new kitchen or bathroom sounds like a plus, especially if the home was due for an upgrade anyway. Without the proper permits, those upgrades may actually be illegal. State and local jurisdictions require permits before remodeling that involves new electric or plumbing to ensure the structure’s safety. Once the remodel is complete, a licensed inspector is to review the upgrade and “close” the permit confirming everything is up to code. Some homeowners may skip the permit in the interest of cutting costs and pass that risk onto the next home buyer. In the worst-case scenario, the previous homeowner’s work will not be up to code and the inspector will require you to undo the work and start over – at your expense. If you’re looking at a home with an “open” permit, discuss this with the seller. Find out when they plan to close the permit, if they hired licensed contractors, and when the work will be done.
Undisclosed insurance claims
To obtain a list of the past seven years’ worth of home insurance claims on a home you are looking to buy, request a CLUE or Comprehensive Loss Underwriting Exchange. Property disclosure statements will detail issues like lead-based paint or asbestos, but the CLUE report will shed light on occurrences like fire or flood damage you need to be aware of before you buy the home.
Pests, water damage, and structural damage
Make sure you check the basement! Anything wrong with the home’s foundation will eventually hurt the rest of the home. Basements can shed light on potential pest problems, existing water damage, and ongoing structural issues. Horizontal cracks in the foundation, musty smells, or stains on the wall are all signs of water damage. Touring the basement also gives you the opportunity to examine any beams that run the length of the home. Wood beams, found in older homes, are especially attractive to carpenter ants and termites who love moist wood, and steel beams can rust if exposed to too much water.
A little landscaping goes a long way. You may be in love with a home from the outside, but the inside is another story. Protect yourself by working with the right real estate teams. Realtors or real estate agents who work in your area are familiar with many of the homes for sale and may know things that you don’t. Home inspectors specialize in a number of areas and are there to protect you. If the home you love does require extensive work you have the opportunity to walk away from the sale or negotiate with the seller to either have the work fixed in advance or lower the price to account for the costs you will have to incur to fix everything. Remember, you’re not alone in your home buying journey!