Kicking the Tires of Existing Homes
Why You Need a Home Inspection
by Craig Goebbel
President & CEO, LoanTek, Inc.

Two in five of the resale houses you'll tour while shopping for a home will have at least one major defect that could cost you from a few hundred dollars to as much as $15,000 to repair.

Almost every house, no matter how recently or expertly built can have a problem (or problems) that cannot be ignored if the home is to stay in good repair.

The 2000 HouseMaster Resale Home Deficiencies Study of 2,000 inspection reports found roofing, electrical systems, plumbing systems, central cooling, central heating, insulation, structural systems and water seepage problems among those most likely to yield defects.

And based on its findings, the Bound Brook, NJ-based HouseMaster.com also determined the estimated cost of repair to cure the common defects.

• Roofing -- $1,500 to $5,000
• Electrical systems -- $20 to $1,500
• Plumbing systems -- $300 to $5000
• Central cooling -- $800 to $2,500
• Central heating -- $1,500 to $3,000
• Insulation -- $800 to $1,500
• Structural systems -- $3,000 to $1,500
• Water seepage --$600 to $5,000

Pressure to make a quick purchase decision is making it even more important than ever to be an educated home buyer who knows what to look out for when shopping for a resale home. The nominal cost of a home inspection -- $250 to $500 -- can give you some peace of mind. Keep in mind, a $500 inspection fee is three-tenths of one-percent of the sales price, and could protect your from a several thousand dollar surprise.

If defects are found early on, buyers can factor in the cost of repair into the home purchase equation and make sure it fits within their budget - helping to avoid any post-purchase surprises. Buyers can negotiate with the seller to reduce the cost, pay for repairs or deposit escrow money for the repairs.

However, in a superheated seller’s market you may not have the option of asking for inspections.

How do you protect yourself?
Work with a buyer’s agent who is experienced in the local market and knows the neighborhoods you are considering. Buying a home will likely be your most significant financial decision and you don’t want an albatross with a huge mortgage payment around your neck. My advice is to forego any offer to purchase that precludes an inspection clause and always work with an agent who knows the neighborhood.

© 1999 - 2004 LoanTek

Craig Goebbel is President and CEO of LoanTek.com, mortgage loan brokerage.  He is also producer and host of Real Estate Radio Show, a Seattle-based talk show featuring mortgage and real estate news, interviews and listener calls. It is broadcast on KVI Radio AM 570 in Seattle, Washington. Past show are also webcast via the Internet at http://www.realestateradio.net.

Real Estate Radio Sponsor

Real Estate Radio with Goebbel and Gray is the leading real estate radio talk show in the world and is hosted by Real Estate home mortgage expert Craig Goebbel, owner of LoanTek Home Loans and Robb Gray of John L. Scott Real Estate.