| InvestingInProperties.com

The Necessity Of The Home Inspector

Illustrating the power of the home inspection…

As a real estate agent, I am required to accompany all house inspections for my clients. I like to prepare my buyers for the worst before any inspection. Part of this process is educating them that in hiring a home inspector, he will be going through every problem, big and small, that is wrong with their potential acquisition. As such, the buyer should be ready to hear mostly bad news. However, I tell them that it is normal to feel a bit depressed right after a home inspection. However, I also inform them that there will be loads of small problems, each easily fixed. Most issues tend to be under a hundred dollars in cost. It is the major problems that the home inspector susses out where he really earns his fee. Among these types of issues would be structural problems, leaks, and dangerous aspects to the property – be they environmental or otherwise (for example, faulty electrical wiring, or wiring not up to code).

Creating solutions to found problems

If a major problem comes out in the home inspection, the buyer can then ask the seller to remediate the issue, or, lessen their sales price accordingly. Home inspections should not be used as a device to renegotiate the sale price of an already-agreed to contractual price. Rather, they are done simply for the protection of the buyer. You would never ask the seller to fix minor items…that would simply be tacky. It is only a major problem that should be addressed as a form of renegotiation on any given property.

An integral process…

I have written here before about the inspection process. It tends to be pretty uniform from one home inspection company to another. I have noted in one prior article how “most house inspectors like to start on the outside around the foundation, and then explore a building’s exterior walls up to the roof, on to the walkways, steps and any surrounding retaining walls. They will review with the investor what is or is not catastrophic in nature., in regards to defects with the house. And then they will offer advice on what can be done to repair them, along with cost estimates to correct these potential problems. If, for example, a gutter is found leaking, they will note the cause and effect of the leak: that water can get into the side wall of the house and rot the trim, or actually get into the structure internally. Inside the house, a home inspector will explain to buyers about the heating and electrical systems of the particular property, and how they operate. They will look for obvious problems in all the systems, and will give a generic overview of the entire system.”

A pertinent home inspection example

I recently had a buyer perform their house inspection using an inspector I knew was quite thorough in his work. His forte was finding trouble in locations one wouldn’t expect to look at – or gain access to for that matter. On this particular house, this inspector went through his normal home inspection checklist, then found the tiny opening to the attic space. It was a raised ranch house, and the attic opening was about two feet square, located in a bedroom closet. In this instance, there was a dresser loaded with clothes on top blocking access to the attic opening. Neither I nor my buyers even knew it existed.

Finding the hidden defects

This home inspector not only found it, he neatly moved all the clothes on top of the dresser (had they been placed there on purpose?), moved the dresser out of the way, and managed to open the attic hatch, get his ladder, and somehow squeeze himself in through the opening. Once inside the attic, he ascertained that the bathroom exhaust, next to the bedroom, was not vented to the outside at some point in time (though it was now). He found a large amount of mold in the area right above the bathroom, on the attic’s unfinished wood ceiling. He also took photos and wrote up the major problem in his written report. Naturally, we sent the report to the sellers, who claimed they never knew of the problem. We then asked for the sellers to remediate the mold using a licensed environmental company. And they did so, providing us with proof of the work being completed before the closing.

Part of your crew

This is just one simple example of the myriad issues that can come up in a house engineering inspection. For this reason, and because most buyers are not experts at house construction, it is an imperative that you hire a home inspector to perform a house inspection immediately after agreeing to terms on a new acquisition, and signing contracts on it. It is the singular best way to protect yourself from purchasing a “lemon” of a house. One that could suck you dry financially over time. You’ll find that the home inspection cost of a few hundred dollars acts as a great insurance policy when buying any investment property. The home inspector is yet another one of the invaluable members of your crew you need to add when assembling your team of real estate professionals for your investment property purchases.

Choosing your home inspector

I have also written here about the home inspector selection process. It’s not something to be taken lightly. I have noted that it is best to check that your choice of home inspector be licensed by your state…don’t simply assume they are. In addition, I recommended that “you may also want to check with the local Better Business Bureau to see if there are any complaints that have been lodged against the inspector you’re considering hiring. It’s also good to get several referrals from your real estate agent for local home inspectors they work with a lot. Realtors tend to create an approved list for different craftspeople as well as real estate related fields, including home inspection. Anyone on their approved list will have already been vetted many times over.”

Building rapport

I feel it very important to reiterate previous advice I’ve given on the selection process. In one prior article here I’ve recommended that, “as you build your crew, you’ll want to use your trusted home inspector over and over…Besides possibly obtaining volume discounts from him, you’ll also find another major benefit. You’ll develop something called rapport, and you’ll learn what to ask a home inspector. You’ll be able to trust his insights implicitly. And you’ll also be able to develop a “shorthand” way of communicating with him. The home inspector I stuck with for many years eventually did not need to send me those “boilerplate” inspection reports. He’d send me a shorter version – not the one used for standard home buyers. Communication flowed easily – and he kept me out of danger innumerable times in the process.” I would hope that any property investor, over time, will attempt to create this kind of rapport with their newly-found home inspector. Creating a steady relationship with your home inspector will greatly benefit you in the long run.

Photos courtesy of insurancequotes.com, propertymanagementinsider.com, ajvcgc.com, bestlongislandhomeinspectors.com, aceenvironmentalstl.com, sanjeeda-sheikh.com, beaconlighthomeinspections.com

How To Flip Houses: Choosing Your Agent

The selection process for a great agent

Choosing a real estate agent to help you in your search for investment properties when house flipping is usually a smart move. A good one will be able to narrow your focus, and run pointed searches for potential investment properties you may not be aware are currently on the market. They also can be invaluable in helping to negotiate your transaction once you locate a potential cash cow of a property. In addition, they can point you to the right local lenders that offer flipping money.

However, how do you go about selecting one, and not get stuck with an idiot? Besides the old tried and true method of having family or friends refer a Realtor they’ve worked with and like, then using that agent to represent you, try utilizing these three methods to select a good real estate agent to help you in your locating process when flipping houses…

Acid test #1

Call them. If your reach them, are they engaging, or do they simply not have time to speak with you, and blow you off? If you leave a message, will they return your call (either with a text or a call) within 10 minutes? If not, you’re using the wrong Realtor to aid you in your search for flip houses! Even if a Realtor is showing homes, they can easily text you back a template “I’m with clients right now” just to let you know they got your message. The way they treat you will be an easy indicator of how well they will work for you…

Acid test #2

Ask them to run a search for you. Be as specific as possible about what you’re looking for….include your price range, areas you’re most interested in purchasing in, as well as type and style of properties you’re looking for. They should be able to spit out search results to you within an hour. If not, move on to someone else – fast. Like acid test #1, you’re trying to locate an agent that works hard for your business – and speedy service is a great way to ascertain how willing they are to go the extra mile for you. In addition, speed is a necessary ingredient when locating houses to flip.

Acid test #3

When you locate a great potential acquisition for house flipping, ask them to run a Comparative Market Analysis (CMA) for you. CMAs take a good Realtor a couple hours worth of work to prepare properly. If they are simply using the software program built into their local Multiple Listing Service (MLS) to get their CMA prepared, do not use them! A good agent will take the time to go through and analyze – using their own head – each of many different comparable items (like lot size, building size, date sold, amenities, etc.). Then they will apply an amount to deduct or add to each comparable property relative to the property you’re considering buying (the subject property). It’s this attention to detail that should gain your business – and trust.

photos courtesy of tmgnorthwest.blogspot.com, orlando-mortgage.org, prw.net.au, money.cnn.com

Team Building: Dealing With Selling Agents

How to be very choosy

In trying to figure out how to choose a Realtor for your investment property searching help, it is best to choose a reputable local area real estate agent with a broker’s license. You’re not simply choosing an agent, as I outlined in my last article. In the great debate over whether to use a real estate broker vs agent, the broker is always the one with the heavier experience, greater state-sponsored real estate education – and experience. And by reputable, I don’t mean the one with simply the well-known hyper-local reputation for their salesmanship skills. You know, the one with a plethora of listings, representing many different local sellers. To the inexperienced eye, one might get the impression that these “local legends” of real estate are the go-to people to represent your interests.

Don’t be deceived

Nothing could be farther from the truth. Consider these key elements in your analysis of who to hire as your agent – be it for buying or, when it comes time to sell, as your personal sales rep. An agent who has a ton of property listings is going to be very busy, for sure. Ultimately, how much time can they realistically devote to you as a buyer of investment property? Also, consider that agents that primarily list properties are known as selling agents. Temperamentally, they are more suited towards representing sellers, not buyers. In this same mode, they will be ill-prepared to represent you as a buyer – let alone fully understand your needs as a buyer, and as an investor.

Using their connections

In addition, consider that primarily listing agents, while being well-connected with large numbers of family and friends within a community (probably an area they may have grown up in to boot) may be thought of as a major plus, but there is a downside…a big downside. These same listing agents with the great local reputation for taking listings do just that – take listings. They obtain most of their listings by breathing. Years of family and friends throwing off sellers for them to represent have created what I call a monster. The monster of not thinking much, not being able to think creatively, nor the ability to push hard for those they represent. They are simply used to having listings handed to them.

Beware a stockpile of listings

These same listing agents with their perennial stockpile of listings don’t have to work hard for a living (if you think pushing paper is working hard). They also tend to be removed from the most basic understanding of what they originally had to learn: namely, their local state real estate law. For example, I just ran into one Realtor in my area that was representing a seller. And it has been a very ugly experience. Items on her listing sheet did not match town records. (And town hall and the local building department is the first place a proper listing agent needs to go when taking a listing – to ensure, or at least be able to explain, any discrepancy between town records and what is actually in a home. In my example, she had never checked that town records showed a half-bath in the basement where a full bath actually existed. When I questioned her about it for my buyer, she got extremely defensive, huffy and irate. Eventually she came back to me with a statement that she has never met a Realtor who checks town records. And, naturally, I have never met (until her) a Realtor that did not.

Speed to impress

So be very, very careful when interviewing these “know-it-all” agent types with their large stable of listings. Instead, ask how they would represent you as your buyer’s agent for investment property. What exactly will they do for you, and how often? At the very least, they should rattle of instantly that they will create automatic searches to be delivered daily to your email, of houses matching your criteria you’re looking for. They should also impress you by their speed at getting back to you in simple communications, and their overall investment property knowledge. Without a doubt, you must make sure they know how to read a pro forma income statement. It’s also a good idea to work with someone who regularly works as a buyer’s agent, representing buyers’ interests (whether investor or not). Buyer’s agents tend to be made up of a very different temperament than seller’s agents. They tend to bend over backwards to please you, and are really excellent, by and large, at listening to what your needs list is, and make great suggestions as to how to acquire a property that fits your description.

Filling in another piece to your team

If you look more discerningly as you choose your Realtor to represent you, you will be able to fill in another excellent piece to your overall investment property team. Make sure you ask the right questions, as outlined above. And never go on a Realtor’s local “reputation” alone. It could prove very misleading – and costly in the end for you. This is because you ultimately may miss out on exposure to prime buying opportunities due to their gross incompetence. Make sure the Realtor you select is proactive, and not used to their old way of doing business as usual. It’s just one of the keys to investment property success.

photos courtesy of orlando-mortgage.org, cutcaster.com, starproperty.my, redoaktx.org, yourdictionary.com

Choose The Best Contract Painters

An integral part of your property investing team

Just like the other members of your property investment team, your painting contractor is the one you’ll want to stick with over and over again. The more you utilize one home painter, the more discount you should accrue for each succeeding project that you employ his services. In addition, painting contractors tend to be very linear in their cost approach to estimating a project. That is, after a few projects, you should become quite adept at estimating within ten to fifteen percent of what your local painter will charge you, based on the size of the building, and the general condition you’re buying it in.

Repeat business

Unlike with plumbers or electricians, or even carpenters, estimating your paint contractors cost is much more simplified – and constant from project to project. After a while, I knew just by looking at a potential property acquisition what my painting costs would be for painting services with my steadily reliable painting company. By using the same local painter again and again, not only was I benefitting from a discounted price for repeat business, but I was becoming expert at estimating this particular renovation cost myself when I searched for other investment properties to acquire.

Owing allegiance to you

One of the most important facets of finding a good panting contractor, is to work with someone that can give you his priority when on the job. Many painting companies have several crews out on multiple projects every day. I like to find a painting service that only does one job at a time, and the owner/head painter is on the job with his workers every day. If a painting service is so large that you never have the same crew for each of your projects, you can never develop a rapport with them. And, when it comes time for you to ask your painting contractor for suggestions that will save you money on a project, you never know if you can trust their advice if the crew is constantly changing. Stick with one local painter and never vary. You’ll be developing a long-term relationship, and your painting contractor will become yet another valued and integral part of your entire investment property team.

How does your painting contractor stack up on project one?

Like with other trades, your first project will be the most important one with your choice of a local painter. You’ll be measuring them to see how well they work with the other trades people, which will be critical. Many tines a carpenter says he’ll be ready for the painters to come in by a certain date, and he’s not. Then the painters take another job, and can’t come back to you in a timely manner, essentially delaying your entire renovation schedule. But if you have a painter who works well with other trades people, they can ask the right questions to determine the best fit for their schedule, based on how the project is proceeding. In essence, a good local painter is very aware that time is money – and looks for every way to help keep you on your schedule – not simply fit you in to his.

Bidding a project out

In deciding upon your choice of painting companies, you’ll want to check out their references – and actually visit local paint jobs they have done. Certainly price is a major component. But don’t let it be the lowest bidder wins. Make sure you obtain at least three price quotes when selecting a painting contractor. And make absolutely sure they are all written out, and for the exact scope of work as each other. Otherwise, you’ll be comparing apples with oranges. In addition, ask your general contractor or carpenter who they’ve had good experiences working with in the past. If they’ve already worked with someone they trust and work easily with, chances are their recommendation will be a good fit for you as well. You can also check with family friends and your real estate agent for referrals of local painters. Regardless of the list you decide to winnow down, make sure you obtain those written estimates first, so you can best compare their respective price quotes.

photos courtesy of danielpaintingservice.com, painting-contractors.regionaldirectory.us, indigo-construction.net, pinonpainting.com, paintingtampabay.com

The Importance Of Finding A Good Landscaper

The most underrated member of your team

When looking to renovate or simply upgrade the overall look of your investment property, either to flip or hold onto and rent, I believe the most underrated of all the members of your crew is the landscaper. It is the professional landscaper whose services tend to be the most overlooked, yet can provide the biggest bang for your investment property dollar, for every project. In many ways local landscaping companies provide the metaphorical icing to your extravagant birthday cake. What do landscapers do? Easy: they provide the instant attraction your potential buyer or tenants will have the very second they pull up to your investment property. And it is that attraction that will translate into increased dollars for you – either in a higher sales price, or being able to find the best tenants paying top market rents for units in your building.

Stick with local landscaping

Finding a good landscaper is all about judging talent. Once I found my landscaper and used him for my first project, I was hooked at the magic he could perform. I simply told him my budget for the project, and he offered suggestions as to how best to stretch that budget without running over. Good local landscaping companies are connected – big time. They work with several local nurseries and know where to pick up seasonal shrubs, trees and assorted plantings that will offer the biggest bang for your buck.

Developing a plan for all seasons

In addition, a good landscaper will know how to plan out the look of your plantings for all seasons. This includes, for example, planting evergreen shrubs or trees in the summer, knowing that they will draw the eye’s attention come the dead of winter, as well as create a wind break to your building to help reduce energy costs. Also, your landscaper will offer ideas for a “layered” effect of staggered blooms around the front of your investment property come Spring. For example, he may plant forsythias for early Spring, with rhododendrons to come in and bloom red, white or pink a month later after the forsythias yellow flowers have fallen off. I am no landscaper by any stretch – not even on a purely homeowner amateur level.

I have learned a great deal from years of hiring and observing a master landscaper at work. First, they always come up with a landscaping plan. Besides plantings, grass seeding, etc., they also will make suggestions to help improve your walkways and entry areas. Then comes the implementation of that plan to keep your budget in check. A good landscaper is above all creative, efficient, timely, works well within a budget, and makes suggestions to you without being asked – all to help you get a higher return on your investment property, either from rent or sale.

Finding a good landscaper

Now that you know what to look for, you’ll be able to winnow down the list of possible local landscaping companies to choose from. First, check out their previous and current work to see what they’ve done locally. (Naturally, you’ll be asking for their list of local homes they’ve worked on.) In addition, ask for recommendations from the homeowners of the houses you then visit. Remember to ask the previous clientele of the prospective landscaper if they came in on budget and on time for their project. You can also ask your real estate agent for referral as well. But always be sure to visit several local homes where their work is on display. In effect, you are responsible for recruiting the right talent for your project.

Testing the landscaping waters

After you make the decision to go with one landscaping company, consider the first project you give them as their “test.” How they perform on this test will determine if you’ll continue to use them over and over again. What you’d ideally love to have happen, is for you to forge a relationship with your landscaper much like the one you’d forge with your carpenter of general contractor. This will be another integral part of your investment property team. Make sure you get along with that person very well. You should ultimately feel you can call on your landscaper to help you ideate and show off your investment property in its best light and for the least cost.

How much does a landscaper cost?

And speaking of the expense, you might ask how much does a landscaper cost? Well, landscaping is very labor intensive. So expect the labor component to be high. Also, different plantings will obviously have different costs. But some evergreen shrubs cost far less than others …and to the untrained eye, like mine, a less expensive shrub may substitute well for a more expensive one. Again, I suggest laying down a set budget for your landscaping part of your project (whether it’s a thousand dollars or ten thousand) – then let the landscaper come up with his ideas for how best to meet that budget.

Bid out when starting

If it’s your first project with him, you might want to “bid out” the same budget to multiple local landscape companies in order to find a landscaper. And see what each comes up with that offer the biggest splash with your money. After you’re pleased with using a landscaper once, keep going back to him again and again. You’ll also find that his local nursery connections may afford you more discounts, yielding more plantings for your investment property at the same budgeted price, compared with some other local landscaper.

photos courtesy of diynetwork.com, usnews.com, eliteconstructionva.com, danzafamily.com, easyinsure.ca

Choose The Best Real Estate Attorney When Investing In Property

Choosing among real estate lawyers

The choice of your real estate attorney is probably the single most important crew decision you’ll need to make when you go to buy a house for investment purposes. Your real estate lawyer does not do a perfunctory job. While it might appear this way to the untrained eye, a good attorney will save your from financial ruin. Real estate attorneys, in my opinion, earn their money when things go to Hell in the purchase or sale process, and all parties are losing their minds, going a bit crazy. If you chose a good attorney, you’ll know it. He/she will be the calm voice of reason in the room. The one that knows how to compromise easily – but the one that also fights like a pit bull for your interests. The one that knows real estate law without having to refer back to the books. Oh – and they will also have a knack for explaining complicated legal matters very matter-of-factly, so easily, anyone can understand them.

Handling disputes

On more occasions than I would like to admit, my real estate attorney has bailed me out – many times at a closing. They really earned their real estate salary… Some unresolved issue comes up and – wham – both buyer and seller can’t agree. Notorious are disputes arising from pre-closing house walk-throughs. A leak is discovered, a window broken, an appliance not working. Your attorney can usually fix the situation with a simple negotiation with the other attorney. (For example, when an appliance isn’t working prior to closing, leaving a certain amount in escrow until the seller fixes the problem.)

Title issues

But then there are the major issues – things like title issues and liens that the seller may not have even known about. Many times your attorney (when you’re the buyer) will have to negotiate with the seller’s attorney as well as the title company on how to resolve lien issues. Other times, he’ll have to do further research to see how to correct a problem…all while the clock is ticking to get to a closing date…which all parties are over-anxious to have happen.

The selection process

Selecting your attorney is not simple. Many times, it is a process of trial and error until you find the “right” one. Basically, you’ll want someone that really listens to you. And gets back to you fast. These two things are not to be taken lightly – or for granted. You’d be amazed how many real estate attorneys are what I call “overbooked.” There are periods where they simply take on too much work, have too many clients to represent, and therefore do not give each client their proper representation. Certainly, you can winnow the field down by getting referrals from personal friends, family and most importantly – your real estate agent. They should each suggest several names. Usually, one or two real estate attorneys in any given geographical area tend to pop up over and over again as the “best” in their area.

Evaluating their reputation

There’s one real estate attorney in my area that has a reputation as a “deal killer,” while another one has a reputation for being a deal “problem solver.” Some attorneys are more prickly than other, while certain others are more easy-going. Obviously you’ll want to find the one that works well with your personality. After you’ve used one once or twice, you’ll know if they are a “keeper.” If so, consider yourself lucky – and make that attorney an integral part of your investment property acquisition team.

photos courtesy of oc.hughesmarino.com, infiniteunknown.net, answers.yourdictionary.com

Choose The Best Contractor For Your Investment Property Project

The contractor maze

While selecting the best attorney or home inspector for your property investment team is integral for keeping you out of financial danger, choosing the best contractor is important in order to save you money. Over not simply one project, but multiple ones, finding the best contractor can ultimately save you hundreds of thousands of dollars in repair and renovation costs. If you choose correctly, you’ll find a truly creative soul. He won’t be just knowledgeable in all phases of carpentry and house construction, but someone who can constantly make creative problem-solving design solutions for the hundreds of issues that will surely crop up on any major renovation on a daily basis. He’ll also be someone you can trust to come in on-time, on-budget, on every project. It’s called reliability. Eventually, he’ll earn your trust – and you’ll be looking to him for design guidance after a few projects.

Helping you choose the sub-contractors

A great contractor knows how to save you money on materials, as well as on labor. He can act as your general contractor – calling in sub-tradespeople (for example, the plumber, electrician, floor refinisher, etc.) as they are needed. He will most definitely be a carpenter extraordinaire himself. So he will be technically proficient, trustworthy with your money, and always paying attention to your budget and bottom line. In short, he will become your right hand man – your unofficial “partner.” He’ll also be able to help you choose the best hvac contractor, guiding you through the possibilities for best heating and air conditioning companies (or heating and air conditioning contractors). Let’s face it – heating and ac companies can be difficult for the layman to choose from. Maybe you only need an ac contractor for the job. A good primary contractor can help you choose the best air conditioning contractor as well.

Estimating prowess

Another key feature of your contractor will be his estimating skill set. When you go searching and locating investment properties to acquire, you will naturally be narrowing down the possibilities to a select few all by yourself. But it’s your top pick at any given moment that should garner his attention. You should be able to call him in – free of charge – to offer his opinion as to your top pick – and get his guesstimate as to the range and scope of repair and rehab costs involved with the potential project. Here’s where working with the same contractor over and over again becomes crucial. As the most important member of your crew intent on saving you money, his recommendations (or lack thereof) are crucial to your numbers crunching, and ultimately deciding whether you should even make an offer on a property – and if so, he will help you determine the maximum amount you should possibly be offering on it. A very important position indeed…

Avoid going with the cheapest…

As for choosing the best contractor, like selecting your attorney or house inspector, obtaining recommendations from local friends and family is crucial. So too are referrals from your real estate agent. However, even with recommendations, make sure the contractor you decide to use is licensed. Too many property investors go cheap – and tend to hire local talent that are not licensed. But this can cause big problems down the road. (For example, if one of his workers gets hurt, and they’re not carrying workers comp insurance on their workers, the local building inspector could shut down your renovations until you hire a licensed contractor. And that would be a financial burden to you if you have to wait months for another contractor to free up his schedule enough to clean up the mess your unlicensed one left you in…) It’s also helpful to obtain a list of licensed contractors from your local building department. While they cannot offer referrals, they can supply you with a list of local ones they always work with.

Bidding out your project

Of course, you’ll want to bid out your project. While choosing the lowest price contractor is not necessarily a bad thing, make absolutely sure each bidder is bidding on exactly the same thing. I find it very helpful to produce a punch list of work to be done, and hand it out to all bidders. Then, if they make a suggestion you didn’t think of that will cost extra, make sure they submit their bid with that extra itemized as a separate charge. In this way, you can compare different contractor bids equally. Also compare their payment schedules. Be wary of contractors looking for you to place down payments of the whole project that amount to more than a third down. Ultimately, you’ll want to be able to negotiate a payment schedule that is representative of the scope of the project. If it will be a potential two month project, ask to pay on a weekly basis, leaving at least ten percent to be paid after completion of the entire project.

Are they a good fit?

Once you’ve decided to go with your choice of contractor, you’ll be interacting with them on a daily basis. It will become apparent very quickly if he’s a good fit to your personality and way of doing business. As mentioned above, a good contractor is creative, offering you money-saving solutions to everyday construction issues that arise. The easier he is to work with, the more of a keeper you’ll know you’ve got. And you’ll then want to use him over and over again for all your succeeding projects.

photos courtesy of cbsnews.com, fixandflipnetwork.com, brokersbestmtg.com, money.cnn.com, carterrealtyagency.com

Choose The Best Home Inspector For All Your Investment Properties

Finding a good home inspector

Next to the attorney on your crew, the home inspector is probably the next most important person to help keep you out of potential financial disasters. His main job (and essentially what to look for in a home inspection) is to make you aware of every physical defect in the property you’re about to purchase. In this way, you can best prepare your financial pro forma for expected repairs and major renovations. Without him, it’s like sailing a ship blindly in a storm. And rocks lay ahead.

Home inspection FAQ

Home inspectors are usually fully licensed by their state. However, never assume this. Always check to see that they are. You may also want to check with the local Better Business Bureau to see if there are any complaints that have been lodged against the inspector you’re considering hiring. It’s also good to get several referrals from your real estate agent for local home inspectors they work with a lot. Realtors tend to create an approved list for different craftspeople as well as real estate related fields, including home inspection. Anyone on their approved list will have already been vetted many times over.

Things to look for in home inspection

Additionally, ask for any prospective home inspector to send you their standard “boilerplate” of an inspection report – before you hire them. Some inspectors utilize grandiose, and extremely lengthy reports. Problem is, while they are plugging in the important data relevant to your property, the report is made up of 90 to 95% standardized language – most of which are helpful tips and warnings for different hazardous, generic conditions any house would potentially have. (For example, a helpful tip is to make sure you check that walkways don’t have cracks.) Timewise, I’ve seen some inspectors take three to four hours for some standard home inspections. This is insane. It just means they’re not very efficient at scoping out the house. Normal house inspections should take between one to two hours tops. If the inspector is also running a lot of tests (water, septic, etc.), then allow for a little longer.

Home inspection price

Certainly, don’t select a home inspector on price alone. This would be penny pinching to the highest degree. And very foolish. If the inspector’s price falls within the average for your area (the traditional amount for an inspection varies between $300 and $400), he’ s been recommended by your real estate agent, he has no complaints against him, and he says he can complete your inspection within two hours, then by all means choose him. After one inspection, you’ll know if he’s someone you can work with again.

Choose the best home inspector

As you build your crew, you’ll want to use your trusted home inspector over and over again. In a while, besides possibly obtaining volume discounts from him, you’ll also find another major benefit. You’ll develop something called rapport, and you’ll learn what to ask a home inspector. You’ll be able to trust his insights implicitly. And you’ll also be able to develop a “shorthand” way of communicating with him. The home inspector I stuck with for many years eventually did not need to send me those “boilerplate” inspection reports. He’d send me a shorter version – not the one used for standard home buyers. Communication flowed easily – and he kept me out of danger innumerable times in the process.

photos courtesy of propertymanagementinsider.com, propertymanagementinsider.com, homesinspectors.com, insurancequotes.com