Laws in most states favor buyers in cases where you find a major defect in your new house, but pursuing actions with sellers after you have moved into your new home is time consuming and inconvenient.  Assuming the problem is not major enough to void the contract, you may be stuck with a home with a flaw you would not have accepted had you only known it existed.  A simple way to prevent most dilemmas like this is to request a house inspection as a contingency of your offer.

Since the 1980’s, when a California courts case required real estate agents to disclose to buyers any known defects and ones they should have known about through due diligence, most other states have enacted laws requiring agents to disclose material defects.  This turn of events gave the home inspection business a shot in the arm.  Home inspections became the norm for how buyers, sellers, and agents can share knowledge about the condition of the home.

Some states now require home inspectors to be licensed.  Many inspectors belong to trade associations such as the American Society of Home Inspectors (ASHI) or the National Association of Home Inspectors (NAHI), as well as state associations.

If you are looking for an inspector, it’s best to ask your real estate agent, who can offer a referral, or talk to recent buyers in the neighborhood who have used a particular firm.  The credentials a home inspector has are important, but the mark of a good home inspector is thoroughness.  You want a home inspector with a good track record of finding property defects during the inspection so that you do not discover them later.

The inspection will cover what can be seen in major systems from roof to foundation.  Separate inspections may be necessary for termites, septic systems, or other specialized things like spas or pools.  It is not designed to critique aesthetics or lifestyle. 

Ideally, when the inspection takes place, you should be there, but the seller should not.  The seller needs to provide access to all parts of the home and have the utilities on.  The process might take several hours.  If you are unable to be there for the whole inspection, try to come at the end so the inspector can walk you through the house and explain his findings before preparing his report.

When the inspector discloses his findings, you may have some decisions to make.  How serious are the flaws he found? How much will it cost to fix them?  What is the priority to fix them?   If the problems are serious enough, you might not want to complete your purchase.

Depending on the findings, your real estate agent may be able to use them to help you negotiate on price.  If the seller already mentioned a problem before the inspection and set the price based on that, it is unlikely he will further drop the price based on that.  If the flaw is a minor one or one that a sequence of previous owners have lived with, the seller may give a little to sell the house in this buyer’s market, but your agent can guide you as to what is reasonable to expect.

At Bandy Homes, we will guide you through all phases of the home buying process in Denver.  We also offer great tips for pricing your Denver home for sellers.

Marianne Bandy

FHA Great News:  Loan amounts have been increased by HUD in many areas!  In the Denver metro area, the new limit is $406,250.  This means the benefits of FHA (lower down payments, lower credit score requirements, make-sense underwriting, etc) will be available to more homebuyers!   (note: this number is not right)  This new higher FHA limit means that a qualified buyer with a 3.5% down payment could finance a home up to this amount.

FHA Not So Great News:  Minimum credit score requirements.  Most of the major FHA lenders will be requiring a 620 credit score starting 3/2/2009.  Recently, the minimum credit score has been 580.  For first time home buyers hopeful of using the $8,000 home buyer tax credit good through December 1. 2009, this means some quick analysis of the credit report is in order.  While major credit score killers like bankruptcy, foreclosure, repossession, and a long history of delinquent payments can't be fixed quickly, some other areas can be  improved in the short term.  A person can make sure that all information on the report is correct, make sure payments are on time, and pay down credit cards so that only 30% of the limit is in use. If a potential homeowner takes these steps, he might be able to improve his score by 30 points in a few months - a good move for qualifying for financing from FHA or any other lender.

Our BandyHomes website has many helpful tips for buyers, as well as many affordable properties in Aurora.

Marianne Bandy

Relocate to Denver

Median home prices are down an average of $57,000, nationwide, from what they were in 2006, so homes are becoming more affordable for people.  Some sellers may long for the good old days of higher prices, but when they step out as buyers to purchase their replacement home, they will enjoy the new affordability as well.

Spurred on by the $8,000 new homebuyer tax credit, renters who have never owned homes or former homeowners who took a break from ownership have an incentive to buy before December 1, 2009. The estimate is that the stimulus will lead to 900,000 additional home sales this year.

Even those who don't qualify for the stimulus will still benefit from low mortgage rates in the high four - mid five percent range for a 30 year loan - rates considered "historically low."  Recent provisions of the stimulus bill have raised FHA loan limits to $406,250 in the counties making up the Denver metro area, so a buyer could conceivably buy a home with 3.5% down and finance it at great rates.

By year's end, NAR predicts that the supply of homes could equal an 8 month supply while the housing market in many areas will be stronger.

Denver sellers, prepare to meet your buyer!  Denver buyers, get ready to find your perfect home!  Call the Bandy Home Team today.

Marianne Bandy

Relocate to Denver