A Home Inspection is not performed to determine if your house passes or fails. A Home Inspection is completed only to provide you with a list of all the observable defects discovered at the time of the inspection. The number one goal of a Home Inspection is to make you are aware of any conditions that may or may not be a financial issue for you, or could pose a possible danger for you and your family. An inspection helps you to avoid, prepare and manage unwanted complications.
If a Basic Home Inspection is done thoroughly and correctly, it should take 1 inspector 3 to 5 hours to complete and 2 inspectors 1 1/2 to 3 hours to complete. The length of time depends on various criteria, such as, the square footage, the amount of rooms, areas, and features in the home, in addition to the total amount of defects discovered at the time of the inspection. Unforeseen or unplanned distractions can also add time to the inspection.
- Basement, Foundation & Crawlspace
- Cabinets, Shelves & Counter tops
- Attic, Insulation & Ventilation
- Doors, Windows & Interior
- Attached Decks, Balconies, Porch, Patios, Stairs, Stoops & Railings
A home inspection helps you to avoid the unknown when purchasing a property. Buying a property, before obtaining a home inspection, can literally result in buying a property for more than it’s worth. Once a property is purchased, it is yours…problems and all. A basic home inspection helps you to avoid those problems. A home inspection can also help you to negotiate a price that can accommodate any costs and expenses involved with any defects you may consider serious. It may even help you to point out defects and negotiate the correction of those defects, with the seller, before you purchase the property.
During the negotiation process, there is a document in Missouri and Kansas referred to as the “Resolution” or “Resolution of Unacceptable Conditions Amendment”. In this document, any defects or conditions that are unacceptable or unmanageable should be listed on this document and submitted to the Listing Agent. This document is normally provided and completed by your Real Estate Agent.
*Word of advice: The only defects that should be placed on this list are items that you will not or cannot afford to pay for on your own or are unable or unwilling to correct on your own.*
A Home Inspection is a “non-invasive” inspection. This means that an inspector will not destroy, damage, take apart or remove parts or items from or within the property, or a system of the property, in order to inspect an area or item. It is, for the most part, a “visual” inspection. The condition or usefulness of a part, system, or attachment of a property has to be determined using the same methods used in everyday procedures and usage. An inspector has to be able to view the condition of the property without having to disturb or move personal property or parts of the property.
If you are the potential buyer of a property, it should be performed at some point before you make the purchase. If you intend to make an offer on the property without an inspection being a “Contingency” to the purchase, we believe the inspection should be carried out before you make the offer. By “Contingency” we mean there is a clause in the “Offer” that states you will only purchase the property after an inspection has been performed and any corrections or remedies of the discovered defects have been completed. This is otherwise known as the “Inspection Period”. Most people acquire a Home Inspection” during this “Inspection Period”.
Some individuals buy properties without the inspection being a determining factor in the purchase of the property. In other words, they do not acquire an inspection and accept the risk. This usually only happens if someone really wants the property and is attempting to avoid having to deal with competition.
The amount of time that it normally takes to complete a Basic Home Inspection report depends on the inspector and what their capabilities are. In most cases, the inspection report is completed within 24 hours. For other inspection services, it could take longer depending on what is being inspected. A Sewer Scope or Radon Inspection can take 2 to 3 days, a Mold Inspection has samples that have to be submitted to a lab and could take up to a week or more to receive the results.
Once a Buyer has received their inspection report, it is normally sent to their Real Estate Agent. The agent then goes over the inspection report with you, in order to help you determine which defects you should add to the “Resolution” or “Resolution of Unacceptable Conditions Amendment”. The Resolution is then submitted to the Listing Agent or Seller.
The Seller receives a copy of the inspection report from their Listing Agent once the “Resolution” or “Resolution of Unacceptable Conditions Amendment” has been sent by the Buyer or Buyer’s Agent. It is sent to the Seller to provide evidence or proof of the defects discovered at the time of the inspection.
How serious a defect is may be subjective to whom the Buyer is. In other words, what one person considers serious, a different individual may not consider it a big deal. It is often based on an individual’s resources and their “home repair” skill level. As a general rule, foundation, roofing, siding, plumbing and HVAC are most often considered the most serious of defects.
Unfortunately, it is very common to obtain a long list of defects in an inspection report. Especially, when it comes to older houses and properties. So please, do not let the list scare you. There are literally hundreds, if not thousands of parts to a house. Over the years, normal wear and tear will happen to some of those parts. Most of the defects will be considered minor defects. Find the items that you believe are too serious or too unmanageable for you to accept or handle. and submit them to the Seller.
No, a Real Estate Agent cannot force you to use anyone or their services. Your choice of an Inspector, Loan Officer, service provider or vendor is totally up to you. Your agent can only make suggestions.
A Radon Exam should be acquired if there is a lower part of the home where members of the household will spend a great deal of time. Finished basements should most definitely always get a Radon Inspection. Our Radon Exam Fee is $100 for properties under 2000 square feet. The Radon Exam is performed over a minimum period of 48 hours. Which is the standard minimum timeframe for a Radon Exam.
Radon is an odorless, tasteless, colorless, radioactive gas created by the natural decay or breakdown of uranium, found throughout the globe. For more information please review “Radon and Your Health”
For more information on the effects of Radon, review “Radon Health Effects”.
A Sewer Scope Inspection should always be performed on older homes and homes with large vegetation, such as trees and bushes. Over the years the “Grade” or ground surrounding the property shifts and changes. In addition, trees, shrubs and the roots of vegetation crack, break and even destroy an underground sewer line. A Sewer Scope Inspection will find those damaged sections within your sewer line. it will also reveal mistakes in the installation. A Home Inspection should also be performed whenever you see signs of a slow drain or water backing up into a basement or foundation, in order to reveal the possible cause of blockage.
Our fee for a Sewer Scope Inspection is $200 for the main sewer line. Additional lines are an additional fee depending on where and what lines we are inspecting.
A mold inspection should be performed whenever you see signs of a mold infestation. A mold infestation usually appears as furry growths or spots, usually in moist to wet areas. The colors may range from black, Brown, orange, green, white and yellow. A mold infestation may also be signaled by a damp smell of must and mildew. Finally, if you have observed an area that appears to have been flooded or show signs of water damage, then this area may also need to be tested. For properties under 2000 square feet, our fee for a mold inspection is $250. This price includes the fees for 3 lab sample examinations.
For more information on mold infestations, review “Mold and Your Home: What You Need to Know”.
Weather does affect how much information can be provided in a home inspection. When it snows during the winter months, the snow can hide defects around the exterior. When the weather is dry, it can hide any potential leaks in a property’s exterior or foundation. Or, when it rains, it makes it very difficult for an inspector to complete their inspection effectively, but it does help find leaks in a structure. Inspectors use a lot of equipment while inspecting a property, such as cameras and electrical devices. Most of these devices do not operate effectively in the rain and can be damaged. So, if an inspection is scheduled during a weather event, it should be rescheduled, if possible.
The cost of a general Home Inspection can range anywhere from 250 to 750. The price usually depends on the square footage of your property, how many sections, number of rooms, areas and types of services requested.
As a seller, you should make sure that any personal belongings are not blocking areas and items that need to be inspected. All areas of the property need to be accessible and unlocked. Check all of your light bulbs, fixtures and hardware, to ensure they are secure and working properly. All of the required utilities also need to be on and operational. A span of up to 5 hours needs to be allotted to the inspector(s) to complete the inspection.
It is always a good idea for a Seller to acquire a Basic Home Inspection to discover any defects before he or she puts their property on the market. It will help the seller to correct any issues before an offer is made and will streamline or expediate the “closing” process. It will help by reducing the amount of corrections a buyer can or will ask for. It will also help to ensure the Seller will obtain the price they’re asking for.
REAL ESTATE QUESTIONS
The minimum credit score required to be approved for a home mortgage loan depends on what type of mortgage loan you are applying for.
CONVENTIONAL LOAN: Most conventional loans can be approved for as low as 620.
FHA LOAN: You can be approved for as low as 580 with a 3.5% down payment. Down payment and closing cost assistance is often provided with special FHA loan programs. Your score can be as low as 500 but may require 10% for the down payment.
FHA SPECIAL PROGRAMS: The FHA usually has many special programs that are available to the public. The programs are available through banks, mortgage and lending institutions, with a focus on 1st time home buyers. The minimum credit score for these programs vary. For more information view Fannie Mae Mortgage Products.
VA LOANS: VA or Veteran loans for current and ex-military have no minimum credit score requirements. Your ability to purchase a home is based on your entire profile. For more information review VA Home Loan Types.
In general, if you are already financially capable today, were able to find your house and put in an offer today, it would take you around 30 days to close and purchase your property. Very often, this does occur. I have also seen cases to where it has taken anywhere from one year to 2 years. It often depends on the status of the market, in addition to where and what you are searching for.
The best answer to this question is “as much time as you need”. Of course, the amount of time you have often depends on your personal circumstances, resources and whom you choose to assist you in your search for a home or property.
You are allowed to view as many houses as there are available to view. As mentioned on another page, it depends on your personal circumstances and whom you choose to assist you in your search for a home or property.
As long as an agent is not participating in any activity that can make them responsible for you as a client, there is no need for a contract. For example, the agent can show you or direct you to a house without a contract. Although, truthfully speaking, their time and gas is worth money. So, that agent may want a contract for showing those particular houses only and with good reason. In addition, once the agent starts giving advice, completing activities or duties for another person, a contract is required and in order. At this point, an agent must make you aware of your current relationship, their duties to you as a client, and their legal requirements as a Real Estate Agent. You can then decide if you want to go through with signing a contract and continuing the relationship.
There is no set time frame for the length of time required to be under contract with any particular agent. The length of time is whatever you and your real estate agent agree to. A contract can be set for as little as one day or one property.
The two most common ways of getting out of a contract is either waiting for the contract to expire, or reaching an agreement between you and the brokerage to end the contract. So, pay a great deal of attention to how much time you have to purchase a home and setup your contracts accordingly. A contract can always be extended.
The amount of money required simply depends on what you desire to purchase. The price of a home depends on the area in which the property is located, the amount of bedrooms, how many features, what type of features and the current condition of the property. So, consider your wants, needs and resources in order to gain an idea of the money you will be required to have.
In most States and situations, the answer is “No”. You do not need your spouse to apply for a mortgage loan or purchase a property. Whom the property belongs to, after purchase, depends on the laws of the state in which you purchased the property. In Missouri we have a saying, “ It takes 1 to buy and 2 to sell.”. So, in Missouri, once you decide to sell the property, your spouse has to also “sign off” on the sale of the property.
Yes, there are additional fees and expenses during the process of purchasing a home. Here is a list:
- Down Payment
- Earnest Deposit
- Inspection Fees
- Appraisal Fees
- Closing Costs
A Down Payment is an up-front payment that reduces the “balance” or amount owed on the property and it also reduces the risk to the bank or lending institution. It is always a good idea to give a Down Payment when purchasing a home, if possible, to reduce the amount of total interest paid and shorten the time needed to pay the loan off.
The amount of the Down Payment required depends on what type of loan you are applying for:
Conventional loans can require up to 20% of the purchase price.
FHA loans can vary anywhere from 3.5% to 10% depending on your credit score.
FHA has special programs that have 0% Down Payment options. Although, you and sometimes the property you intend to purchase have to meet certain requirements, guidelines and specifications.
VA loans do not require a Down Payment.
The most common Earnest Deposits run anywhere from $500 to $2500. The more expensive the property, the higher the earnest deposit usually is. An non-monetary item of value can also be given as an earnest deposit as long as the seller agrees to it in writing.
An Earnest Deposit is an amount of money or something of value given as a guarantee that you will perform your duties and/or complete what is required according to the contract. If the property is not purchased or the deal does not go through and the contract was followed accordingly, then the deposit is returned to the buyer, once everyone has agreed to its return in writing.
No, a home loan is not required to purchase a property. Besides… everyone loves cash! Or, if you have an item considered valuable enough to the person selling the property, then that can be used as well.
No, a Real Estate Agent cannot force you to use anyone or their services. Your choice of an Inspector, Loan Officer, service provider or vendor is totally up to you. Your agent can only make suggestions.
A “Contingency” is a statement or clause in a document or contract that states an event will or will not occur unless a separate event does or does not takes place. As an example ” I will buy a candy bar from you, if my mom gives me a dollar”. Buying the candy bar is contingent on my mom giving me the dollar. Now, of course, Real Estate transactions are somewhat more complicated, but hopefully this gives you an idea of what a “Contingency’ is. A “Contingency Clause” can be a document or a part of a document that describes which event will or will not take place, unless another event does or does not take place.
A loan officer is an agent of a bank, mortgage company or lending institution that specializes in helping clients obtain financing options to purchase a home, property or some other form of assets.
A Loan Officer is an agent of a bank, mortgage company or lending institution who only offers financing options that belong to the institution they represent. A Mortgage Broker has access to multiple financing options from different lending institutions.
These are the items usually required when applying for a loan:
- Current legal identification or State ID
- Proof of income, including W2’s, 1040’s and other forms of tax documentation that provide proof of your income, usually for the past 2 years.
- Pay stubs from your current employer, usually for the past 2 years.
- Bank statements from at least 6 months prior
- A signed document, usually provided by the lender, that gives the lender permission to pull your credit score and credit history.
- Rental history or Lease Agreements
- Gift letters or other documents of current personal value or Wealth that can be used as collateral for the loan.
Yes, you are allowed to put in an application with more than one loan officer or mortgage brokerage as long as it is done within a 30 day period. Applying for multiple loans within a 30 day period will be looked at as a single credit inquiry
The major difference between VA and FHA loans vs Conventional Loans is that FHA and VA Loans are secured and insured by the Federal Government.
Conventional Loans are standard mortgage loans that are not insured by the Federal Government. This means the banks and financial institutions providing these loans take more risk. For this reason, it takes more to qualify for a Conventional Loan, such as a minimum credit score and a down payment of up to 20%. Current day Conventional Loans have made loans more obtainable by requesting lower down payments and adding other benefits.
When preparing yourself to buy a home, put a great deal of your focus in these areas:
- Check your credit and improve your score, by paying off debt, making on time credit and loan payments, keeping your credit balance under 30 to 10% of your total credit line.
- Lower your debt-to-income ratio, known as DTI, to below 43% to 50% maximum. (FORMULA: Total Monthly Payments ÷ Total Monthly Income = DTI(%))
- Do not purchase anything else, during your home buying process, that involves using your credit or putting yourself in additional debt, until after you have purchased the home.
- Determine your home buying budget or how much you intend to pay for a property.
- Save up for a down payment, which could be anywhere between 3.5% to 20%, of the property purchase price.
- Save up to cover home buying dues, fees and expenses. This amount usually ranges anywhere between $1500 to $5000.
- Research loan programs and find the loan program that better fit your resources, credentials, needs and wants.
- Research and put together a list of Loan Officers and Real Estate Agents to choose from.
DTI is “Debt To Income Ratio”. It is a numerical comparison between your monthly income and your monthly payments and expenses. The formula typically used is your total monthly expenses (E) divided by your total monthly income (I). (The answer has to be converted into a percentage, by multiplying the answer to 100. (DTI * 100 = DTI%))
E ÷ I = DTI(%)
PITI is Principal, Interest, Taxes & Insurance. These amounts are or can be included in your monthly mortgage payment.
- Principal – is the amount or balance loaned by the bank or lending institution. It is the balance owed by the borrower or buyer.
- Interest – is the cost of borrowing from the bank or lending institution. It is represented as a percentage and applied to your balance every time you make a monthly payment or installment.
- Taxes – is an annual payment to your local government for the ownership of your property. It is also represented as a percentage and applied to the local government’s perceived value of your property.
- Insurance – is an annual or monthly payment that protects the owner’s home or property from possible damage.
PMI is Premium Mortgage Insurance. This insurance protects the lending institution from possible default by the buyer. It is often required when the down payment is less than 20% of the purchase price.
An Inspection Period is the period of time after you submit an offer and it is approved by the seller. This period of time gives you the opportunity to have the house inspected for defects and evaluated. The length of time allowed depends on what you and the seller agreed to in the offer contract. It is usually set for 10 days.
There are Real Estate documents or a part of the contract document referred to as the “Contingency” or “Contingency Clause” that allows you to back out of the purchase, if you fail to sell your current home.
A basic home inspection is not performed to determine if your house passes or fails. A basic home inspection is completed only to provide you with a list of all the observable defects discovered at the time of the inspection. The number one goal of a Home Inspection is to make you aware of any conditions that may or may not be a financial issue for you or could pose a possible danger for you and your family. An inspection helps you to avoid, prepare and manage unwanted complications.
When you are interested in living in a rural environment or on a farm, applying for a USDA Loan may be your best option. The “United States Department of Agriculture” offers Farm Ownership Loans with up to 100% financing. The USDA is a valuable resource to help both ranchers and farmers purchase or enlarge their family farms. They also help to improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations. The current maximum loan amount is $600,000 and around $300,000 for Beginning Farmer Down Payment), all FSA Direct Farm Ownership Loans are financed and serviced by the Agency through local Farm Loan Officers and Farm Loan Managers. The funding comes from Congressional appropriations as part of the USDA budget.
USDA Loans may also be used to purchase homes in rural areas, in case you are someone who love a farm-like environment but would rather pass on the hard work. The USDA is a very beneficial financing option for either choice of lifestyle.
Reserves are required for certain loan programs and products depending on your credit status or criteria. In some cases, it is what you have left over after you make a down payment and pay closing costs. In other situations, it is simply an amount provided by the buyer to cover mortgage payments, during times of hardship.
For Example: Reserves are more commonly measured in months. So, after you close on your loan, if you have $7,200 in a savings account used for “Reserves” and your monthly mortgage payment is $1,200, you would have six months’ reserves.