After 19 years as a home inspector, I’ve seen everything imaginable during the home buying process, including one suicide and a homicide. We’ll leave those tales, which thankfully are the exceptions, for another time.
More frequently, I see buyers, agents and sellers haggling, sometimes bickering, over the terms of purchases. Of course, each item bickered over can mean an additional $500 or $5,000 out of pocket for one of the players. Many of my experienced buyers refer to this as the “game.” Some are expert game players, but most are ill prepared. Some lose their life savings.
The primary rule of the game, of course, is to understand your risks and protect yourself. But it’s helpful to have a knowledge of some of the subtler, unspoken rules too:
Rehabs always take longer than you think. It always costs more too. Promise yourself that you will hold onto your existing property for at least a month beyond the promised move-in date and allow for extra spending.
Use hardwood flooring professionals. More than any single item, I find, hardwood floors are neglected in condos and lofts. In lofts especially, these floors were installed to be durable, not pretty. Many retain their original character, along with cuts, bruises and gouges when refinished. Insist upon floors free from these defects. People start families in these lofts and a poorly finished floor can lead to unnecessary injuries.
Shop around. This obviously holds true for the home you buy, but it’s also good advice in looking for a mortgage, real estate agent and home inspector. Mortgage rates and fees can vary from one lender to the next and so can the level of service provided by real estate agents. Many home inspectors are referred by real estate agents and because they’re dependent on the brokerage community for their livelihood, they may be reluctant to point out problems that could stymie a deal. Find an independent inspector and ask about his credentials.
Avoid cheap attorneys. A reasonable attorney’s fee for an average closing begins around $500. You also should negotiate an hourly rate for any additional work that might be required beyond the basic service. Spending a little more money on a good attorney is well worth the cost when it means having $5,000 or $10,000 of deficiencies addressed.
Find an agent you trust. In theory, if you’re working with a real estate agent, he or she should be looking out for your best interest. In reality, some agents will attack, belittle, or threaten anything that gets in the way of the property closing – the event that seals their checks. Never forget that your real estate agent’s commission is a percentage. Should your agent encourage you to “up the price” in a bidding war, consider the fact that he or she will make additional money from the increased purchase price.
Get a certificate of occupancy. The city requires such certificates before new developments are considered habitable. The City and lenders will let you waive your rights to this document, but if you’re smart, you won’t move in without it. Why? Easily half of the new condos and townhouses I inspect have features buyers never bargained for: construction debris blocking exits, uninstalled sprinkler systems, leaking or incomplete roofs, filthy interiors and fresh coats of polyurethane emitting fumes no resident should breathe, especially not children and pregnant women. Some of the features that often are not present include secondary exits, emergency lights and exit signs.
Don’t schedule movers. At least, never tell developers or real estate agents that you have scheduled movers. Anything that indicates a time frame in which you must move can be used against you. The sellers and their agent may learn that both a signed contract and the sale of your real property are pushing you into the deal. The warning is especially apt for new construction. Developers and contractors rarely finish on time and routinely request that buyers move in without a certificate of occupancy. The residents are then stuck with whatever deficiencies exist and may have a tougher time getting the work completed.
Thomas Corbett is president of Tomacor, www.Tomacor.com, a professional property consulting company specializing in commercial and residential property inspections and expert witness work. Questions can be emailed to TCorbett@Tomacor.com.