Ask Brian is a weekly column by Real Estate Expert Brian Kline. If you have questions on real estate investing, DIY, home buying/selling, or other housing inquiries please email your questions to [email protected].
Question. Brad from Oregon writes: Hi Brian. My wife and I started looking for a house to buy a week ago. We’ve done the down payment saving and mortgage preapproval part and are ready to seriously make an offer. Surprise! I should have seen this coming but it hadn’t occurred to me how many moving parts there are in a house. After looking at four houses in two neighborhoods, it’s clear to me that we’re not buying a new house where everything is expected to be new – just out of the shipping carton. I discovered that I have no idea how old the roof is or if the plumbing is in good condition or if the electrical is safe or if we’ll need to purchase a new refrigerator next year. Brian, how do we get these types of questions answered before we put our money on the line?
Answer. Brad, great question that needs multiple answers. Your best approach is in stages. First, if you’re considering a new built house, you can indeed expect everything to be “just out of the shipping carton.” The builder almost certainly warrantees everything. You shouldn’t need to do much more than ask for a copy of the warranty and read it entirely (including the fine print). You might also want to contact another homeowner that has bought one of the builder’s houses recently and ask how he/she has been about taking care of any warranty claims. Otherwise, you’re probably good to go.
But… most people buy homes that have been lived in before. This is when you need to be more diligent. Your real estate agent can help with your initial questions. Once you find a house you are interested in making an offer on, start asking questions before writing an earnest money check. Just from looking at a house, you probably know if it’s about 5 years old or 25 years old. Start by asking your agent to verify the year it was built. If your think it’s more than a few years old, ask to have the seller describe in detail any major work, remodeling, repairs, additions, new appliances, etc. that he or she is aware of. Also, read the seller’s disclosure report. You also want to know how long the current owner has been in the house so that you know how much history they should know. You can even ask if they have information from any previous owners (although this information begins losing reliability). Your agent should be able and willing to help you with this.
If that first review is satisfactory, be sure your purchase offer has a good contingency clause for a professional home inspection. No home inspector can tell you exactly when a major system might fail (electrical, plumbing, roof, foundation, A/C, etc. but not usually appliances). However, the inspector will verify if the systems are working properly. Often (but not always) they can inform you about approximately how much life remains in a system or if there are indications that it is close to failing.
You won’t be given a “pass or fail” report. You will still have to make an educated decision. But there are a couple of things you can do to improve your educated decision. First, your questions to the current owner or the disclosure report may have already brought an issue or two to your attention. Make sure your professional inspector is aware of these and ask that he/she is particularly diligent in these areas. Second, the report will certainly turn up areas for at least mild concern. Have a discussion with the inspector to go over these areas from the report line-by-line. You can usually get more information from a discussion that simply from written words or photos. Finally, the inspection can be reason for repairs or further negotiations on the purchase price. Brad, you might be interested in this article: Tips for Negotiating After the House Inspection.
And one more way to protect the biggest investment of your life. Ask for a home warranty policy. You can either purchase this yourself or ask the seller to purchase it. Be sure to read the policy before purchasing it. This is not the type of appliance insurance you might have seen advertised on TV. It is also different from home owner’s insurance (liability and disaster insurance). It is also different from title insurance. A home warranty is similar to what you would get if you bought a new home from a builder. These are primarily intended to warranty major systems (electrical, plumbing, roofs, etc.).
Brad, I hope this helps with your house hunting and that you feel more confident making this big decision.
Please comment with your thoughts and experiences about avoiding buyer’s regret. Our weekly Ask Brian column welcomes questions from readers of all experience levels with residential real estate. Please email your questions or inquiries to [email protected].