Before you begin marketing your property, we suggest you think in terms of the requirements that a potential buyer's insurers or lenders will have. Turning your attention to the bigger picture helps you market and close your home with confidence. These tips lead to better results for all parties at closing.
Not everyone is a cash buyer. For buyers who may need a loan, take time to look at the requirements they face to close. Roofing, plumbing, electrical, HVAC, and building conditions are the most common areas of concern to lenders and insurers. Let's look at them one at a time.
Roof.
Most insurance companies require a roof to have 3-5 years of economic life. They will require a flat or torch down roof to be replaced every 10 years. Minor repairs extend the life of a roof, including replacing boots around bathroom vents, making sure flashing is installed correctly, removing tree branches that touch the roof, and keeping the roof clean from debris. Contacting a state-certified roofer for an opinion is a good idea.
Electric.
And it's not just plumbing to look at. There are electrical requirements, too. Aluminum wiring, cloth wiring, non-grounded outlets, missing GFI outlets, and dangerous panel boxes show up on the list. Panel boxes bearing the names of Federal Pacific, Zinsco, Fuse, Sylvania, Challenger, Pushmatic, and Murray should be replaced. Knob and tube wiring found in older homes must be replaced throughout the home, which includes removal in the walls and ceilings. To be fair, many homes built in the 20’s and 30’s still have knob and tube wiring with no issues. The problem comes when a new buyer has to obtain a homeowner’s insurance policy.
Building.
A critical look at the building conditions is also a good idea. Do-it-yourself changes like
Inspections. new decks, enclosed porches, stair railings, and changes to walls, are often completed without city permitting, and therefore, may not meet local city code requirements. A common violation are decks without proper spacing of the railing spindles. The removal or relocation of load-bearing walls is another huge code violation, often inviting a structural weakness and possibly danger. If you are not able to evaluate building conditions, reach out to a state-certified contractor or engineer.
Inspections.
Do inspections do a good job of identifying potential issues? They vary. The “WDO” required for VA Loans is focused on evidence of wood destroying organisms in the home like termites or beetles. The appraiser that the buyer’s lender sends over will evaluate the overall picture of the house relative to the rest of the market with a goal of judging if the price is competitive. A Four-Point Inspection helps insurers see potential liability in the four major components: roofing, electric, plumbing, and HVAC. The forms of 4-point reports vary one from another, but most are completed by licensed professionals and deemed reliable.
Of all the reports and inspections in a real estate transaction, the Buyer's Home Inspection is usually done during the inspection period and is a tool for buyers to quickly decide to proceed. These reports can be unreliable and misleading, so your buyer should read it carefully. Home Inspectors are not usually state-certified, licensed professionals like the ones that write 4-Point Inspections. Often replacement or repairs are recommended that are typical of similar homes in the same climate built about the same time. If and when you decide on major repairs, three estimates are customary practice.
Summary.
What are the steps to a successful closing? Know thyself, or at least what you are putting on the market. Want to sell “As is?” The buyer can buy homeowners’ insurance without updates, but premiums and deductibles will be higher. Early on, talk to an experienced real estate agent before you list.
You want a smooth and satisfactory closing. The team at Linda Strickland Realty has the xperience, connections, and is ready to assist you from start to finish. Call us today at 904. 881.4811