Let me start off by saying that I’m not a real estate guru. I’ve been a home inspector for 18 years. I started out inspecting residential and commercial properties in Houston. Now I’m a professional home inspector in Tulsa. In that time I’ve come into contact with some of the best real estate industry experts in the country. I’ve had the opportunity to discuss home ownership with literally thousands of people. Below are the 7 things I’ve discovered that home buyers aren’t told, or at best it’s minimized when buying a home.
1. It’s Going to Cost You a Lot of Money Being a Homeowner!
We are conditioned from an early age to become homeowners. It’s the ‘American Dream’ they will tell you. And for many of us, it is. But too many people go into home ownership thinking it will be a bed of roses. Then one morning they wake up and realize their home is a black hole in their finances!
Home ownership comes with lots and lots of expenses. HOA fees, taxes, insurance, interest on mortgages, maintenance and repairs…oh the repairs!
An average air conditioner in the Tulsa market can cost 4 to 10 thousand dollars to replace. A water heater can be anywhere from $500 to $1200 depending on where you live. A new roof? Well, start thinking about selling the kids at this point!
As with anything, there are pros and cons to owning a home. A consumer needs to enter into this with their eyes wide opened and knowing fully what to expect.
2. Always, ALWAYS Use a Buying Agent!
Too many times I see home buyers looking at homes and deciding to go at it without using a buying agent. This is a huge mistake!
Why? Well, for one thing, if you’re not using a buying agent, then you have no expert in your corner. No one will be representing your best interest in the home buying process!
“But we’re using the Sellers agent, isn’t that good enough?”
Not in the states I’m familiar with. Here’s why.
In the states I’m familiar with, by law, an agent who listed the home has a fiduciary responsibility to the Seller. That means they must keep the Sellers best interest at stake. Even when representing both Seller and Buyer. They’re supposed to negotiate for the Seller’s best interest. Not the Buyers.
On the other hand, if you have a Buyers agent, they are required to be working for you and your best interest!
What’s better, is that they are FREE! So why wouldn’t you use one?
3. Renting is a Viable Alternative to Owning a Home
Yeah, I know. I wouldn’t make a living if everyone rented. But the truth is, renting is a better alternative to home ownership for some people. Remember, this article is about what’s best for you, not for me!
Sometimes it may take years before you start to see an increase in the value of your home. If you end up moving in a few years, you may be leaving a lot of money on the table and hurting yourself financially.
Military families and professionals who must move a lot come to mind. Some of them will be moving in 2 years or so. In some regions, a home hasn’t had time to appreciate in that amount of time and little has been paid off of the principle of the mortgage (remember those expenses we talked about above?)
Renting, on the other hand, has its advantages.
For one thing, you typically don’t have to pay property taxes, insurance (unless you want renters insurance, which is usually a lot cheaper than homeowners insurance!), in some cases you don’t have a yard to maintain and you don’t get stuck with expensive home repairs!
4. Never, EVER, Rely on the Home Inspector Recommended by Your Agent
This one is huge and it’s a mistake I see so many home buyers make. I know, on the surface it seems like a good idea, right? I mean, who else should know a good home inspector than your agent?
Here’s where the problems start.
I, along with many other professional home inspectors, have always thought it was a conflict of interest for real estate agents to be recommending home inspectors. Or for any other vendor when the sale of the home relies on their findings (termite and inspectors come to mind)
Many professional real estate agents also understand this and will not recommend a home inspector for this very reason. Not to mention the liability.
Unfortunately, in my 18 years of being in this business, I see that a majority of agents have a list of 3 to 5 “preferred home inspectors.” What they don’t tell you is that the only requirement to become a “preferred vendor” is paying their office an advertising fee to be on their “preferred” list.
I’m bombarded constantly by agents and offices wanting me to advertise on their marketing materials.
I can’t tell you how many times I’ve watched an agent try and minimize my findings on a home in order to prevent their Buyers from walking away.
At the end of the day, agents stand to lose a lot of money if a deal falls through. This is why many have a list of home inspectors they recommend. Inspectors who typically do ‘soft’ inspections in order to avoid upsetting the real estate agent so they can rely on more inspections from that agent!
Oh, what a wicked web they weave!
5. It’s Okay to Walk Away From a Home
I can’t begin to tell you how many of my Clients over the years walked away from a deal on a home only to find a home they liked even more.
Your contract should allow you to walk away from a deal no matter the reason. I’ve heard that some contain a clause that the purchase is contingent on the home inspection. When I purchase a home, I make sure there’s a clause where I can walk away for any reason. Even if that reason is because it’s Thursday and I didn’t like how Thursday smelled.
I’ve had Clients walk away over all kinds of reasons. Some were because of my findings, some were just because they had a bad gut feeling. I had one Client end the Inspection because the staircase was pointed toward the front door. She said that the home’s energy would flow out the door. She was serious.
I had wondered why she didn’t notice the direction of the staircase before they signed the contract. Come to find out, they were from out of state and her husband had picked out the home and she had flown in for the inspection. Eventually, they found a house where the energy didn’t flow out the front door!
No matter the cause, you should have the option of walking if you don’t feel comfortable moving forward with the transaction.
6. New Home Buyers Need Their Own Inspector
This is another huge mistake I see home buyers that are purchasing a newly constructed home make. I guess I can understand somewhat. I mean, you’d think a new home wouldn’t have problems wouldn’t you?
Unfortunately, that isn’t true.
Newly constructed homes have just as many, if not more, problems than existing homes.
I’ve inspected thousands of new homes in all phases of construction. I’ve inspected homes where the Sellers bought them new and sold them down the road. Many of these homes had major issues that the Sellers were never aware of until I found them. Guess who gets to pay for those repairs?!
Many Builders and a lot of real estate agents will try and convince you that you do not need to hire your own independent home inspector because the city or county has sent out their own inspectors.
Remember us talking above about agents losing lots of money if a deal falls through? Builders have lots to lose too if you don’t buy their home, so many try and steer you away from hiring your own Inspector.
The truth of the matter is, for a few hundred dollars you can protect your investment by hiring an independent home inspector who has knowledge of new home phase inspections.
7. Home Warranties Aren’t Always As Good of an Idea As They Sound
Home warranties seem to be a standard item nowadays. It seems nearly every contract I see has listed that the Seller will provide some type of home warranty. Don’t get me wrong, I think this is a great idea. Just be aware that home warranties are not what they’re all cracked up to be!
Unfortunately, home warranty companies have a bottom line to watch out for. I had a home warranty on a home many years ago. My A/C evaporator coil went out. So I called the home warranty folks. Guess what, it wasn’t covered and I still had to pay an upfront fee to have one of their vendors come out and tell me it wasn’t covered by my warranty.
I know others that have had entire HVAC systems replaced by a home warranty company.
Researching home warranty companies and reading reviews will help. Just don’t expect to find any with 5-star reviews! Even among the same companies, it seems some will pay out for this repair and deny the same type of repair on the home down the street.
When it comes to home warranties, it really is “Buyer Beware.”