Should I ask for a home inspection before I buy?

 When buying a home, leave yourself the option to get a second opinion. Consider putting a contingency clause in your offer that allows you to get a home inspection and cancel the sale if the results of the inspection are unsatisfactory. If there are serious problems, a home inspection can prevent some serious hassles.

  • Who pays for the inspection? The buyer usually pays for the inspection, which can cost several hundred dollars. The seller generally wants the inspection completed within a short time period, say five or ten days. For this reason, when you start shopping for a home, also look around for a good home inspector. Ask your agent for several names.
  • Who should attend the inspection? You. You’ll learn a lot about the house that could soon be your home. If it's practical, your real estate agent and the seller should also accompany the inspector. Wear old clothes and comfortable shoes, as a complete inspection goes from attic to basement. The inspector should check for structural defects, plumbing and wiring problems, dampness in the basement, leaks from the roof, termites, lead paint, dry rot, energy efficiency and compliance with local building codes. Any visible and accessible problems should be noted immediately and then included in the report.
  • What happens if the inspection uncovers problems? If you put an inspection clause in the contract, you may back out of deal if serious defects are found. What happens more frequently is the buyer will negotiate with the seller to have the problem repaired or the sales price adjusted.

Click on “Ask Your Own Questions” for answers to other questions you might have about contract negotiation.

What happens after I present my offer?

 When a buyer presents a purchase contract, it is usually the starting point of negotiations, so keep your mind sharp and your pen handy. The seller can accept, reject or modify the contract. Most often changes are negotiated and the sale goes forward. Here are some points to remember:

  • Keep the calculator handy Both the buyer and seller should total up the value of negotiable items, and keep in mind how the price bid by the buyer compares to recent sales of comparable homes. If the bid is already low, the seller may not be willing to pay points or closing costs, but when a home price is a little high, the seller has room to offer financial considerations
  • Try to nail down intangibles Other negotiable items may be hard to quantify, such as including the drapes or a special chandelier, or the 5-year old washer and dryer. Anything pertaining to the sale is up for negotiation and has a value. For example, changing the date of settlement to accommodate one of the families or inserting a mortgage approval contingency can be discussed.
  • Put it all in writing Be sure all changes to the contract are made on the original form, no matter how messy it gets; important items can be missed during retyping.

How does a “drive-by appraisal” help me bargain better?

 If the house you are interested in seems over-priced, there is a new tool to help you get a quick and inexpensive second opinion before you make an offer.

  • Consider a limited-scope appraisal The new, limited-scope appraisals use databases as a source of information to estimate the value of a home. The information comes from prior appraisals, property tax assessments, sale and resale information and, sometimes, a drive-by to come up with a professional estimate in a few hours. The cost is generally under $100.
  • Get less than a full appraisal The more traditional, complete appraisal -- required by lenders for a mortgage loan -- can take several days, usually involves a personal inspection of the interior as well as exterior of the property and costs several hundred dollars.
  • Negotiate a more accurate price Determining the fair value of a home with a quick, limited-scope appraisal before signing a contract may help the buyer negotiate a lower sales price. Also, some lenders now accept limited-scope appraisals for refinancing, thus saving the borrower both time and money.

What are some inside tips to close a deal if the seller won’t budge on price?

 Negotiating is an important part of many home sales. If you have found the home you want, but the price isn’t just right, both you and the seller may have to adjust your expectations to close the sale and get you in the door.

  • Keep searching for common ground If the seller won't budge on the price, perhaps there are other items that can be negotiated, such as closing fees or loan discount points to bring the cost of the home within reach. Or perhaps the seller will add the washer and dryer, drapes or other amenities not originally included in the sale. The key is to keep talking until you find common ground.

We can answer your specific contract negotiation questions. Call or e-mail us or click on “Ask Your Own Questions.”

We’re in a competitive market. What can I do to make my offer look better than another buyer’s offer?

 It takes more than good luck to get the right home at the right price. One advantage you can have on your side is a conditional loan pre-approval. When you are pre-approved your offer is more attractive because the seller doesn’t have to wonder if you can afford to buy. The seller will know in advance that your offer is as good as money in the bank.

  • Pre-approval versus pre-qualification A pre-approval is a conditional loan approval from a lender based on your application. Pre-approval differs from pre-qualification, which is a verbal exchange with a lender about how much you can probably afford. Pre-qualification does not obligate the bank to make the loan, whereas a pre-approval is a conditional loan commitment. Final approval is made when both your finances and the property pass review.
  • Close the deal faster Lining up your mortgage loan before you start house hunting could make buying your new home quicker and easier. A pre-approval can speed closing because most of the paperwork is already in place for the loan. You have already started to learn about the financing process, and any problems will have been resolved.