QUAD CITIES REAL ESTATE WITH RE/MAX

SERVING THE ENTIRE IOWA AND ILLINOIS QUAD CITIES ............................................................

DAVENPORT - BETTENDORF - ROCK ISLAND - MOLINE AND SURROUNDING COMMUNITIES

TOM & CYNDEE BROWNER - CRS, ABR, GRI

BROKER ASSOCIATES SERVING IOWA & ILLINOIS - 319-332-9900 EXT 225

Call us on our private line at 332-1130 - RE/MAX RIVER CITIES, or Contact us at tom&cyndee@quadcitiesrealestate.com Have a real estate question? The answer is just a phone call or E-mail away. Buying or Selling a home is an important financial decision. WHEN YOUR MONEY MATTERS, be careful and check out who you are dealing with. You deserve the best information and service available. If you would like to know what you should expect, check out our Buyer Representation or Seller Representation pages.

SHALL I GET A HOME INSPECTION?

Truth is, there is no perfect home, not even a new home. Second truth is no one wants to spend more money than they have to. Especially first time buyers with limited savings. Third truth is that appraisals only verify to the bank that you are not over paying for the property, that what is being lent in the mortgage is covered by equity or equity and private mortgage insurance. They in no way warrant that the home or mechanicals are in good condition.

Home condition can create hidden cost to the purchaser. Cost that they may not have budgeted for. Therefore, condition may be a critical consideration in your purchase of a home. Low interest rates and rising home prices in this area make most want to lock in the home price now before it goes up any further and the low interest rate to guarantee the lowest payment possible. This is the time to capture your piece of the American dream, your own home. The best time was three or four years ago, but having missed that opportunity, today's rates are still a percent lower than 25 years ago, and look to go only up in the future.

The National Association of Realtors, say's that many factors are creating this climate for home-buying opportunities. With home affordability at 132.0 (December 1997), the Association says that half the families in the nation had at least 132 percent of the income needed to qualify for the purchase of a home with a median price of $125,800.

The following is from a home inspection organization called House Master. I thought it made some sense, and thought I would pass it on with acknowledgement to the source.

"("Today's real estate market is indeed wide open to first-time buyers in many parts of the country," says Kenneth Austin, chairman of HouseMaster, North America’s premier home inspection company. "But they need to be aware of some of the lesser-known, hidden factors often involved in a first home purchase.

A home's condition, he says, is one area of potential concern that many who are new to the home-buying process are unaware of. "For example, the condition of a house is not taken into consideration by the mortgage lender, so it isn't factored in with fixed expenses."

This can become a problem, considering the fact that two out of five – or 40 percent – of homes for sale have at least one serious defect when they go on the market. Those defects, Austin adds, can cost anywhere from $500 on up, depending on the particular situation.

Austin, whose U.S. and Canadian network of more than 270 home inspection offices that inspect residential properties for buyers and sellers, cites the following as a sampling of common defects found in resale homes and what they typically cost to repair or replace:

• Asphalt shingle roof, between $1,500 and $2,200

• Electrical service upgrade, between $600 and $1,200

• Shower pan, between $900 and $1,600

• Warm air furnace, between $1,500 and $1,800

• Inadequate attic insulation, between $800 and $1,100

• Air-conditioning compressor, between $800 and $1,200

Condition is becoming a major factor in determining how good a deal a particular home actually is, Austin says. "It becomes even more important for first-time buyers who are often stretched to the max financially after putting up the down payment."

Many young couples who buy their first home are often unaware of what to look for with regard to the mechanical systems, structure and foundation in a house. "And unless they've availed themselves of a pre-purchase inspection," he says, "their first inkling of a problem comes during a rain storm or cold snap." A better scenario, Austin advises, is for the Realtor and the seller to inform a potential buyer of existing conditions and what is involved in correcting them. If sellers have their homes inspected at the time of listing, they can – in a factual, rather than emotional way – explain to the buyer that either the price has been adjusted to reflect the cost of the repair, or, that the owners will make the repairs.

"A home inspection ordered by the seller at the time of listing can give the seller an added advantage because it allows a buyer – first time or move up – to make a more realistic comparison between homes they are considering," he adds. "The more educated a buyer is, the better it is for everyone in the long run."

And condition is a factor in homes of all ages, says Austin, even in homes that have been well maintained. HouseMaster's technical staff has compiled data on resale home defects based on the age of a home compiled from the 750,000 home inspections they've performed.

For example, basement water penetration is the most common problem found in homes of all ages: Making the necessary repairs can cost anywhere from $600 to $800 to install a sump pit/pump, to $3,500 to $5,000 for waterproofing. Mixed plumbing – meaning a combination of materials, such as copper, brass and lead – is found in 44.2 percent of homes 30 years and older, but rarely in homes less than 12 years old.

"In today's economy, most families have little room in their household budgets for surprises, particularly costly ones, which home repairs often are," Austin says.

"The old expression that the three most important factors involved in buying a home – 'location, location, location' – has been changed, meeting today's realities, to 'location, location, condition'.")"

For more information you may want to check out their site at http://www.housemaster.com

Actually, I would disagree with his location, location condition. The National Association of Realtors has said that Price is the most important factor for the past two years. So price, location, condition would to me seem more appropriate.

Realtors have the duty to be honest and point out material defects of which they have knowledge. However, they are not required to look for or find every material defect in a home or give information beyond their expertise and license. Disclosure forms are another source of information and when materially falsified, have been used in court to gain compensation for problems hidden by the owner and not discovered by the buyer until after purchase. This aside, many homes may have immediate problems, five to ten year problems or 20 or more year problems. Home inspections are not used to verify a perfect home. They are there for you to understand what the problems or potential problems might be and possible cost, and to learn what you need to do to keep a property in top condition for your enjoyment and future resale.

Again, there are no perfect homes, and any home older than forty years is probably going to have a moist spot or worse in the basement. Any home whose major updates are over 15 years old will soon need a new furnace, air conditioner and roof. How soon and how much might be important to you in figuring your long term cost of ownership.

Just remember, as a tenant, your landlord will charge you enough to pay his mortgage, property taxes, repairs, and a profit. In the long run you will still pay the mortgage, property taxes and repairs on your own home, but the profit is your savings. The principle reduction, appreciation from rising home cost are yours.

So there is no perfect home and no home without repair cost, not even a rental.

IREAL ESTATE MAIN MENU - BUYER REPRESENTATION - TOCYNBRO HOME PAGE