Buying a Home? Questions to ask before removing Inspection Contingencies

Buyer Questions & Purchase Preparedness
Questions you should ask prior to removing Inspection Contingencies

I have been asked by multiple buyers what they should know or what questions they should ask when buying a new home.  The home buying process process can be overwhelming so it is always a good idea to have a list of questions to ask both prior to making an offer and especially prior to removing your Inspection Contingencies (17 Days from Contract Execution)

Below is a list you can utilize when inspecting your next home.  Please check back with this article as we will add further information periodically.

I. Current Structure & Condition

1. Age of your home.  A newer property should have less problems (theoretically).  For instance, a 15 year old water heater, a 40 year old roof, 10 year old appliances, 25 year old heating unit are all at the end of their useful lives so be sure to look at all of the items in the home that may need to be replaced:  Items of Concern should be:

- Roof age and what type of roof it is.
- Solar Panels - Age, Installer, Warranty info with panels, is it leased or owned by the owner?
- Water Heater Age?
- Applicance Condition?  Do you like them or will you replace them? How old are they?
- Flooring - note condition, type of flooring, costs to repair or replace?
- Have their been any insurance claims in the last 5 years
- Kitchen Cabinetry - How old and what is the condition?
- Plumbing - How old are plumbing fixtures?  Has the house been replumbed? Are the pipes copper?  PEX? Have they been religned?  Have they had any slab leaks?  (Certain areas like Laguna Niguel have very Hard Water which means there are alot of minerals in the water which can create pin holes in your copper plumbing and a slab leak.
- Bathroom Condition - what is the condition of the bathrooms?  30 year old Tile Flooring? Old school fixtures? Or is it super upgraded?
- Attic - Be sure to get into the attic.  Is there alot of space?  Is there proper insulation?  Any water stains visible?  Condition of AC Ducting and the unit itself.
- Air Conditioning & Heating Unit - How large is the AC unit with compared to the sqft of the home?  How old is the unit? Some units may not be large enough to cover the entire house.  Is it Dual or Single Zoned?
- Repairs - Be sure to ask for a list of any repairs and receipts of work done from the owner.  Alos check to see if the owners have been using a Home Warranty Plan to see if any repairs have been done through their vendors.

II. Inspections.

Here are a list of inspections you should think about utilizing during the buyer inspection process (Typically 17 days from contract execution).
Tip # 1 - When making an offer you should be sure to not give the seller a bottomless list of questions prior to going into escrow.  You need to be aware of what you are looking at but the bottom line is getting your offer accepted.  Once you are in escrow you can start your due diligence.  Form experience I have seen so many buyers lose a potential home because there are trying to answer all of their questions prior to getting into escrow.  As of 1/6/22 it is a SELLERS MARKET with low inventory.  If a seller perceives that a buyer will be difficult to work with and they have other offers they will likely accept another offer

- Home Inspector.  A good inspector typically has been a building contractor at some point.  They will check the whole house, appliances, attic as well as under the house for any outstanding issues.  You will be given a report (Typically a list of items that should be reviewed together with the buyer, inspector and your agent.)
- Plumber  Have a plumber go out and scope the house (run a video from the Clean out to the street).  You can see if the sewer line has any breaks in it that would prevent or restrict proper flow to the sewer.
- Roofing Contractor - Have a roofer check the type of roof.  Age and condition.  What is the expected remaining lifetime of the roof.
- HVAC Contractor - Have a licensed specialist check out the condition of the AC and Heating unit.  Also have the check out the flow of air through all of the vents.  A new AC unit or Heater can be expensive.
- Flooring Specialist - Thinking of replacing the flooring?  Be sure to get a quote for replacement as this can get quite expensive depending on the size your your new home.
- Electrician - Be sure to have an electrician take a look at the Master Panel.  Be sure it is up to code.  Also you want to look at the current lighting in your potential new home.  Is it old school lighting or do you need to replace it with more modern lighting.
- Termite Inspection - Termites are everywhere in CA. Depending on the construction of your home you want to have a licensed inspector look for termite droppings, wood rot & damage and get a repair estimate for Section I Termite Clearance
- Mold Remediator - If you find 'mold' issues or if there is water damage in the home it may be necessary to have a Mold Remediator do an inspection.  They can take samples and send then to a lab to have them tested.  If you need a good Mold Consultant we can refer you one.
- Geologic Inspector - If your new home lives on a lot with a view or is in a community with alot of hills be sure to call the city to make sure there have not been alot of 'Slides' in the area.  Depending on the Soil Condition some areas are more prone to having land movement so it is never a bad idea to have a Geologic Inspector to view the property.  They will have access to other reports in the community which will be a good indication of whether land slides are prevalent in that community.
- Pool / Spa Inspector - Buying a home with a pool?  Be sure to have an inspector go out to check on the pool or spa as well as the related equipment.  A leaky pool can be costly.

Tip # 2 - Don't forget to ask for all the utility bills.  If you see that the watrer bill is $900 per month then there is likely a slab  leak.  If the electric bills are $600 a month you need to get an electrickan in to figure out what the problem is..

Tip # 3 - UNCOVERING PROBLEMS TO YOUR NEW HOME IS NOT A BAD THING
- You will make a REQUEST FOR REPAIR during your inspection period.  You can ask for repairs or a dollar amount to cover the repairs.  Typically I would suggest you estimate what the cost would be to fix the repairs and find your own vendors to take care of these items once Escrow is completed. 
Secondly when handling a Request for Repair Do NOT given the owners a list of 60 items to repair.  Telling the owner to go through the whole inspection report and make every repair is a sure fire way to piss off the seller and not negotiate with you on a realistic repair credit.

III. Home Exterior & Lot

Check out the size of your lot and what is in your backyard.  Many of the inspections above could apply to what needs to be reviewed such as the pool condition or the stability of the hill behind your house that provides you with an awesome view.  Items to think about;

- Lot borders and fencing - What does the fence look like?  Is it stable?  Is there a Zero Lot Line?  Can you tell where your lot ends and the next lot begins?  What is the fence condition?  If it needs work you should get an estimate for the repair cost.  
- City Permits & can you expand?  Always a good idea for you to go to the city to see what permits or any other files you can find on the property.  Also find out what the zoning is and if you have any desire to add a pool or an addition to the home you better find out what the details are from the city on how much sqft you can add to your home based on your specific lot size.
- Exterior of the home - What is the condition?  Stucco crack by the way.  Dont be too worried about stucco cracks but be sure to address this with your inspector.
- Sprinklers - Do they work?  Do they cover the whole backyard effectively
- Cement pads for the paito. Are their major cracks that are bigger then an inch in heighth differential?
- Driveway - What is the condition?  Are there significant cracks?  (Cracks are not bad in the driveway as concrete does crack but you want to make sure they don't lead under the home)
- Stains - Do you significant staining or mineralizing on the stucco or on the garage flooring or driveway?  That may be due to water intrusion so be sure to verify with your inspector.
- Got Grass? - If you are concerned about utilities and if you have an 1/2 acre of grass then it may cost you some money every month to keep it watered.  As I said before be sure to review a full year of Water & Utility Bills.

IV, Condos & Associations

If you are thinking about buying in a Condo Complex or you are buying in a community that includes an association, once you are in escrow, you will receive the CC&Rs.  It is alot of boiler plate information and can be boring to read but there are some items you should understand when reviewing CC&Rs.

- HOA Dues - How much are they?  How many HOAs are there?  In Irvine some communities have 3 HOAs they are paying dues to.  Typically there are 2 HOA's, The first is the community HOA itself and the next would be a Master HOA.  These dues will be listed on the MLS listing but it is always a good idea to verify them.
- Mello Roos - Does your community have Mello Roos?  These are additional costs to an owner who buys typically in a newer community.  It is a bond set up by the developer to cover the infrastructure of the community,  If this bond is costly I suggest you find out when the Mello Roos expire
- Taxes - What are the Taxes to your home?  This goes hand in hand with any Mello Roos fees.  Interested in finding out what the Taxes & Mello Roos are?
Go to: the Orange County Tax Assessor at http://tax.ocgov.com/tcweb/search_page.asp
You can type in the address of the property you are interested in, drill down and you can see what the exact Taxes and Mello Roos, if any, for that property.
- Assessments & Lawsuits - Check the CC&Rs, talk to the listing agent, call the Association Management company as well as the City Building Department to see if there are or have been any Assessments or Lawsuits in the community.  Often times you will see that many properties in a community have had similar plumbing or roof issues which affected alot of the owners due to how a condo complex was constructed.  In this case there could be a lawsuit to receive funds from the builder to repair this issue.  In other cases I have seen Assesments where everyone in the community had to pay for an upgrade to the community.  You can even have a city create an assessment to certain homeowners.  Currently in Newport Beach on the peninsula there are assesments to each owner to have the communication lines be rerouted underground.  So be sure to check with any association management company as well as the city to find out if the communty you are buying in has ever had any assessents or lawsuits associated to it.  If you do find out there are currently lawsuits filed against a community that could very well affect whether you can get a loan on the property.
- Owner Occupancy Ratio - One of the first question you should find out when buying in a condo complex is what is the Owner Occupancy Ratio?  This is the ratio of current owners who live in a complex vs. how many are rented out.
For instance if you have 200 homes in a community and 100 are owner occupied then the owner occupancy ration is 50%.  For people getting a loan, many lenders do not want to see over 50% rentals.  The higher percentage of owners who live in the complex the better with respect to getting a loan.
- Styles & Improvements - Most associations have rules and regulations of what you can do to your property.  Obviously with Attached condos you cannot paint your property a different color.  However you also will need to verify if you can make improvements to the property or add a shed in the back yard or a myriad of other changes you may want to do to your property.  Another expample is where HOAs will not allow 'Work Trucks' to be on the street (They have to be in the garage).  Some HOAs can be very stringent with the application of their rules.
- Utilities - If you are buing in a condo complex, are the individually gas metered?  or is it Sub Metered?  Get a copy of all utility and HOA monthly bills and review them.

V. Neighborhood Comparables

Do your homework & know the recnt community sale trends and everything else about the community.

- Know the previous sales.  How long did they take to sell?  Have prices been going up over the last year, 6 months or last 90 days. 
- What is the owner occupancy ratio in the community you are buying in?  
- Preview - How many properties have you seen in this community?  Have you seen multiple floor plans?
- Condition - What is the condition of your house vs other houses recently sold?
- Location as compared to other sales. - Is it a corner lot?  Do you have views? Is there potential for upside?
- Rental Survey - Good idea to know what your home will rent for should you decide to move out and keep as an income property.
- Law Enforcement - Call the Local Police to find out if there is recent criminal activity in the area.  Check the database for Sex Offenders: 
https://www.meganslaw.ca.gov/mobile/Disclaimer.aspx
-Drive the Community - Be sure to go back to your home at multiple times during the night and on weekends.  Take a look at who is in the neighborhood and how much activity there is.  Dont be afraid to knock on a couple of doors to find an owner to see what they think about the property and how tight the neighborhood is?
- Sale Turnover - Are there alot of sales or not many on a yearly basis?  A low turnover rate is great.  However some areas have higher turnover rates because prices have escalated quite a bit so this is a good ratio to look at.

VI Negotiation Advice

Lastly, know how to negotiate! Depending upon the sale cycle and amount of inventory available, how you write your offer and further negotiate will define whether you purchase the Home of Your Dreams!  Some things to think about:

- Choose you agent wisely!  A brand new agent does not know nearly as much as an agent who has worked through multiple Real Estate Cycles.
- The Brokerage your agent works for does matter.  There are online brokerages right now that hire alot of agents with high agent turnover (Purple Brick for instance) They hook you by saying you will get a 'Discount' when using their brokerage.
Simply put - You get what you pay for.  Dont save $3,000 to lose $20,000 due to poor negotiation.
- Clean offer - Write an intelligent, clean offer 
- Expireds - Be sure your agent does their homework on recent sales and also find out if there are any recently expired, cancelled or just off market properties in that community as well that you may be able to make an offer on.
- Agent Bonding - Some agents actually CALL other agents to discuss a an offer they are submitting on a property where most agents currently TEXT other agents that they have submitted their offer for review.  
This is a relationship business. 
Your agent should be doing everything they can to separate your offer from any other offers that the listing agent is receivng.  For instance I have listed properties where I get 5 offers but only 1 agent called me to let me know about the offer status and their buyer.  I have had Redfin agents submit offes and not follow up.  If your agent is not getting any commission for assisting you in the purchase of your new home how much do they really care about what you pay for a home?  Dont become just a transaction to an agent.  Your agent should be invested both personally and financially in making sure that you as their client are getting the best possible results.
- Tips on Writing your Offer and Going through the Negotiation Process - I would like to talk to you you more about how we will write up your offerand properly negotiate you into your next home! 

Text 'Negotiate' or Call Patrick direct at 714.401.0893

Click Here to Set up an Appointment with Patrick

Sincerely,

Parick Schwier 
Schwier Group Real Estate - REMAX One
Click Here to find out What Your Home Is Worth today.

Experience Matters
Real Estate since 1990