How a Proper Home Inspection can Make or Break Your Next Deal
This week at Fresno Deal Seekers, we talked about the importance of a proper home inspection in regards to making sure your that you are getting a thorough and accurate home inspection. This is especially important for investors who are staking their profit on the outcome. When you have your property is inspected, you are trusting that inspectors opinions and depending on them to give you a detailed report on everything that is wrong with the place.
One of the first suggestions I offered is to go with your inspector anytime he is looking over one of your properties. There are many reasons why you would want to do this. One of the main reasons is so that you can watch them do it and ask questions about the process. You will also know if they are performing a roof, attic, or basement inspection. If they don't you should ask them to and if they refuse then you should find another inspector. You may notice other things that they are not inspecting and can inquire about it. Another great reason to join your inspector is so that you see what he DOES inspect and what he is looking for. As you go on more inspections – you will learn more and more about what to look for and what inspectors are likely to point out.
Having this kind of knowledge can come in handy when talking to potential sellers, especially when you are able to spot all the things add or subtract value from the deal. Understanding the how to inspect it can give you greater negotiating power because you can demonstrate that's you know what you are talking about and can give your words more weight. It can also help distinguish the better inspectors from the amateurs.
So what are some of the things that your inspector should be paying the most attention to? I'm going to cover a few of the more important aspects of the home inspection that you should make sure the inspector is paying attention to. Failure to so do could result in an expensive mistake and slimmer margins than projected.
Check the foundationUntil you know that the foundation has not been compromised , you really haven't inspected the house. I cannot stress how important this is. Trust me you do not want to find out you have a bad foundation in the middle of your project. So many things depend on your foundation being solid. What are some of the signs that you may have a compromised foundation? Several things -
<code> Cracks that appear larger than usual in the exterior concrete Cracks in the walls or ceiling Doors that have trouble closing or opening Gaps between the wall and the floor or ceiling Sagging floor or staircases Windows panes are hard to open or have cracked glassAny of these things may indicate foundation issues. Be sure to have them thoroughly check the foundation and get plenty of pictures so that you can see for yourself that the foundation is in good condition.
What kinds of things can go Wrong with your foundation to cause so many problems?
Broken footings that cannot support the weight above it – could be from some work someone did to the house in the past or perhaps they made additions and cut things that they shouldn't have such as load bearing walls and the foundation beneath it.
Cracks in the foundation that continue getting bigger over time -could be due to roots or settling – or even if there was flooding or lots of moisture , the ground may have softened and the weight of the house may have been unevenly distributed causing cracks from overloading.
Broken or missing pier supports that are underneath the floor supporting the girders. These pier supports can also sink down under the weight of the house under wet conditions. The piers may be rotted, infested or previously infested with termites and eaten away, they could be sitting at an angle instead of straight upright – or in some cases missing altogether.
Needles to say – you really need to make sure the property you are buying does not have any of these issues or if they do they need to be addressed before you buy or at least negotiate a better price out of the deal. Foundation work can cost anywhere from $500 - $11,000 with the national average being around $3,965.
The roof is your next most important component of your house. A bad roof can destroy the rest of your house by letting water get into many places where it should not go. Undetected water leaks can cause damage for several years before you realize what has been happening. Damaged rooftops can also allow pests to get in and nest – they also like chew on wiring and wood. Your inspector should be giving the roof a thorough look over with a visit to the top as well a peek underneath it to see if any light is shining through. Light shining through mean water shining through too and obviously you don't want that. Roofs can be free of leaks but still be in really bad shape. Its important the the rafters have not been compromised by dry-rot or infestation from termites. It may have had an issue that was treated long ago – but the damage may remain – and be eve worse now. Most roof problems are fairly obvious – you can see damaged or missing tiles or it looks very worn and weathered – but not everything is obvious – they need to climb into the ceiling to see what it looks like on the inside to be sure everything checks out. Make sure your inspector is taking plenty of notes about your roof and taking lots of pictures. You don't want to be surprised here either. Costs for roof work could run you from $900 for a simple roof repair to $7,500 for a whole new roof.
While sounding fairly obvious – many things on the exterior of the house often overlooked. For example a lot of people miss the facial – which is the board that runs along the roof line of the house- many times this fascia will be rotted and could be a sign of bad drainage or excessive moisture. You also need to look at things like dirt or wood up against the house. These things can cause fungus and dry rot and flourish. I once bought s property that had three inches of dirt up against the wood. When I cleared all the dirt away – most of the wood had been rotted away and need to completely replaced. Rain gutter is resoething else to look out for . If rain gutters are not installed property, in disrepair, or simply not installed at all – you may find areas of the house where water has bounced of the ground and onto the wood of your house, leading to wood rot. Most of these fixes aren't too bad but prices can vary a lot depending on much needs to be replaced. Left unattended however an the costs can go up exponentially. Replacing all the woods mean painting it too – a costly en-devour on its own.
Be sure that there is good drainage and water moves away from your house – not towards it. Look at the driveway – it is going to need to be repaired or replaced anytime soon? Are there obvious encroachments on your property like a shared driveway or neighbor that likes to park on your space ( or your grass). Check around for any soggy areas that could indicate poor drainage or broken or overflowing septic system.
Be sure to look for any signs of previous water damage or leaks, they tend to show up as discolorations on the ceiling or sometimes the walls around windows. They are many times at the edges of walls where the wall meets the ceiling but can also be right in the middle of the living room – they can be caused by rain, upstairs bathrooms, or even from an AC unit that has a broken condensation pipe. The leaks could be fresh or they could have been repaired long ago. In any case, they should be looked into further because there could damage that was never fixed.
Don't forget to check all the electrical outlets in the house as well as making sure all the switches work and what they go to. Sometimes we take it for granted that switches work – but they don't always and you don't want to find out your first night that the lights don't work . Bathroom and outdoor electrical outlets should be GFCI (Ground Fault Circuit Interrupter) made especially for use in moist conditions. Be sure that you have the electrical system looked at by a professional if you have any concerns about anything uncovered in the original inspection. In addition to verifying that every works – also check your service panel – it may be really outdated , overloaded or both. Sometimes amateur electricians rig up some strange brew of their own and they are not necessarily up to standard codes and could pose a danger to the property and its inhabitants. If your inspector notices anything out of the ordinary – it should probably be looked at.
Turn on all the water faucets, showers, the outdoor hoses, and sprinklers if they exist to make sure you a re getting water and that it is a good pressure. Flush the toilets and make sure that nothing backs up into the tubs. Verify that the tub and showers can drain without obvious obstruction. Look underneath the sink to see the condition of the pipes- are they corroded or rusted out? Does the sink have shut off valves? Check the condition of the garbage disposal. These are things that you want to know about before you buy the place.
Heating and cooling are something most people don't take much time to think about until its too late. Does the property your looking at have outdated heating units or is it modernized? Are there air conditioners in the window? If so – its not the end of the world , but make sure they work. Your best bet is to have a newer HVAC system that heats and cools your house. If it comes with an HVAC unit -verify that is adequate for space your are heating / cooling. They come in rating such as 2.5 Tons or 4 Tons – it refers to the amount of air it can process in an hour. The larger your house is – the more tons your unit needs to be. Some people cheap out and buy smaller units than rewarded so they can save money – but what they don't realize is that the units works much harder trying to condition more space and it causes it to run more often and overworks the motor. This leads to higher bills and lower lifespans for the units. A new AC / Heating unit can easily run you from $4,000 - $10,000 depending on the brand and size you need.
As you can see – there are a lot of things that can be discovered in a home inspection that can wring your wallet dry. A property might look good on paper , but once you get a chance to see it in person and really look into the details of it – you could save yourself from making a costly mistake.
If you don't get a home inspection or don't have a good home inspector – you may find yourself discovering one these multi thousand dollar problems that could throw your whole project's budget off track. Be sure to get referrals when looking for a home inspector – ask people you trust who they have used. Your home inspector is a very important part of your investment team – because as you now know, a proper home inspection can make or break your next deal.
Please be sure to check out my others articles on real estate, investing , and crytocurrency ( and some other random dog stuff)
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