Making an Offer on a Home

[Captroop]

Hey, Huddlers!

So the wifey and I are about to make an offer on a home, and we're a little nervous. I figure collectively there's centuries of experience here, so some of you probably have some good insights. Any advice you guys could offer to some first-time home-buyers?

How much were you comfortable spending relative to your income? Stretch your budget or not? Build in an escalation clause?

Anyone waive a home inspection? Why? Why not?

Thoughts on furnishing and yard care? Did you get consultants or just wing it?

How much of the square footage percentage-wise should be committed to my Panthers man-cave?

[Anybodyhome]

Spend what you know you can pay- not what any financial institution says you can pay or says you're qualified for. Their number is always bigger than yours. Keep in mind your mortgage payment will include PMI, local real estate taxes (city & county or county only if you stay outside the city limits), etc.

Rates right now are around 3.125. We just started our re-fi process last week, locked at 3.125 down from a 4.2 rate. No more PMI, new rate and a 20-year instead of 30 will cut almost $300 off our mortgage. 

Never recommend skipping the home inspection. Especially if the state requires the inspectors to be licensed. He'll measure water temps from the hot water heater, check the HVAC system, crawl under the house and check humidity readings, etc. Any issues he finds are negotiating tools in the price. Either the owner agrees to fix them, reimburse you at closing or renegotiate the selling price of the house.

Wife and I do most of our own yard work and I've painted the entire interior of the house myself. We've remodeled the kitchen, master bath and we're doing the fireplace mantel and surround now with some added built-ins.

Panther man-cave? Trust me, there will be seasons where it's no bigger than a broom closet and other seasons you may need to convert the garage. Keep in mind that as far as resale value, you'll need to make all the poo disappear for an open house.

[Inimicus]

Do NOT waive the home inspection and even insist on a sewer/septic inspection.  Your main sewage line is a quick way to spend 30k if the situation is bad enough.  (suspiciously specific for a reason)

[Captroop]

Thanks for the great feedback so far! Yeah, we're definitely getting the inspection. We had just heard in this "sellers market" that waiving the inspection is a way to make your bid more "competitive." But yeah. fug that noise.

And it's on public sewer. No septic tank. Thank god!

We're looking at 2.67 rate. Wow! Paying out the nose for the friggin house, but are more than gonna make up for it in how much we are saving on the mortgage.

[LinvilleGorge]

Why would you ever waive the inspection? Anyone pushing you do that is giving you horrible advice.

 

[Anybodyhome]

49 minutes ago, LinvilleGorge said:

Why would you ever waive the inspection? Anyone pushing you do that is giving you horrible advice.

 

Flips, investment properties, rentals, etc. do it all the time. But never for a primary residence.

[LinvilleGorge]

16 minutes ago, Anybodyhome said:

Flips, investment properties, rentals, etc. do it all the time. But never for a primary residence.

That's what I meant since that's what Captroop is buying here.

[Captroop]

She just floated it as a possiblity. As soon as we asked her what she thought, she agreed in having the inspection. 

I'd have really been concerned if she suggested waiving it. 

[cookinwithgas]

We are in the middle of selling a house as executors of an estate and the home inspection thing is just no fun. A cracked brick on the patio is a hit for this inspector. We're fine with replacing the 6 missing shingles, stuff like that, but this ticky tack crap is making us rethink the sale to these people. We had 3 other people making offers, it's a fantastic house owned by a meticulous person.

[Captroop]

Can I get this inspector's number?

[Anybodyhome]

10 hours ago, cookinwithgas said:

We are in the middle of selling a house as executors of an estate and the home inspection thing is just no fun. A cracked brick on the patio is a hit for this inspector. We're fine with replacing the 6 missing shingles, stuff like that, but this ticky tack crap is making us rethink the sale to these people. We had 3 other people making offers, it's a fantastic house owned by a meticulous person.

As a former real estate inspector in Virginia and a current housing code inspector for a larger city in NC, it may seem ticky-tack, but the reality is home inspectors get sued all the time because they missed something, despite the fact the contract and state laws usually protect the inspector since we can't go tearing into walls or ripping up floors to see what's underneath. I carried a $1M liability policy for each inspection I did just for that purpose. Most states that license home inspectors usually require minimum amounts of insurance.

But for every issue I found, I provided a photo and referenced the applicable building, fire, plumbing, electrical, or mechanical code. I provided them a bound final inspection report, complete with pictures, code explanations and all of the readings I took. Hot water temp from each faucet, from the water heater, gas pressure tests, HVAC pressure, coolant and temp readings, duct inspection, crawls space, attic, roof, etc. My inspection took anywhere from 1-2 hours up to 4-5 on larger homes. Then I spent another 4-5 hours on the report, printing and binding it once everything was laid out properly.

I get it and I've been on your side of that inspection as well, so I know what you're going through, but think of it this way- a cracked brick on the patio may become a trip hazard and when the guy down the street does just that at your daughter's birthday party in the backyard after he's had a few, guess who's going to pay? I know it sounds extreme, but trust me, I've been doing this long enough I've seen it all.

Again, the inspection does nothing but provide information to the potential buyer. Is a cracked brick going to stop the sale for this buyer? If it does, they didn't want the house to begin with. There's negotiation to be done- you agree to fix some things, other things you may agree to drop the asking price by a few hundred or by whatever estimate you have. It's a compromise on both sides. They may come back and tell you if you fix this, that and the other, they'll take care of the rest on their own. You're not expected to fix everything and you don't have to, it's a give and take. 

[hepcat]

For the love of Christ and all that is holy, get an inspection.

[LinvilleGorge]

The other thing I'll add about inspectors, be wary of inspectors enthusiastically recommended by realtors. Good inspectors kill a lot more deals than lousy ones.

The inspector we had was a retired structural engineer. That's why I wanted him. I'm concerned about foundation issues, structural issues, major electrical/plumbing stuff, etc. I don't care that a receptacle doesn't work or that a window blind is broken. He found foundation issues in the first house we were under contract on. He suggested getting a soil engineer out and doing a bunch of other testing, we just bailed. He passed the house we bought with flying colors.

When we sold our house this summer, the inspector they hired rolled up in a franchise truck and hopped out and immediately asked me how old the roof was. I replied that it was five years old. He looked relieved and said "Whew, good. That means I don't have to climb up there." I just chuckled and wished him good day. He flagged some minor nit picky stuff and that was it. There were some other things I knew about that he missed. Nothing major, just stuff I expected him to flag. He didn't flag a single thing I expected to see flagged. LOL!

[hepcat]

3 hours ago, LinvilleGorge said:

The other thing I'll add about inspectors, be wary of inspectors enthusiastically recommended by realtors. Good inspectors kill a lot more deals than lousy ones.

The inspector we had was a retired structural engineer. That's why I wanted him. I'm concerned about foundation issues, structural issues, major electrical/plumbing stuff, etc. I don't care that a receptacle doesn't work or that a window blind is broken. He found foundation issues in the first house we were under contract on. He suggested getting a soil engineer out and doing a bunch of other testing, we just bailed. He passed the house we bought with flying colors.

When we sold our house this summer, the inspector they hired rolled up in a franchise truck and hopped out and immediately asked me how old the roof was. I replied that it was five years old. He looked relieved and said "Whew, good. That means I don't have to climb up there." I just chuckled and wished him good day. He flagged some minor nit picky stuff and that was it. There were some other things I knew about that he missed. Nothing major, just stuff I expected him to flag. He didn't flag a single thing I expected to see flagged. LOL!

you want a bad inspector when you sell the house, a good one when you're buying