Month: April 2012

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5 Key Times To Get Your Home Inspected

If you’re a homeowner, you can save yourself a lot of headache by knowing when to get a professional home inspection. Most people mistakenly think of a home inspection as something you only do when purchasing a home.

Unfortunately, I have seen numerous occasions where a home inspection would have been well worth it for the homeowner. Professional home inspectors find things that even the most observant and savvy homeowner may not notice.

Here is my take on key times to get your home professionally inspected:

1. Buying a home – even a new home

It goes without saying that you should get a home inspected when buying a resale or used home, but it’s just as important when buying new construction. Building a home is very complex, so even when working with a very reputable builder, issues can come up. I always recommend people get a home inspection on new construction and I have yet to see a perfectly clean inspection report. There is another huge benefit to having an inspection done at this time: you can take all the items found and give it to the builder as a punch-list for your final walkthrough.

As a side note, another thing buyers sometimes don’t realize is that they can have a real estate agent represent them on the purchase of new construction (so we can advise you on things like this).

2. Before your builder warranty is up on your new home

New construction typically comes with a builder’s warranty – a period of time during which the builder is responsible to repair any defects. If you didn’t do a home inspection before moving in, it would be a good idea to have one done before the end of this warranty period. There could be latent problems that don’t become obvious until after the warranty period.

3. After a major renovation

Similar to new construction, there may be things that got missed by the contractor on a major renovation. It’s best to know about these things right away so you can call the contractor back out to take care of them.

4. Pre-inspection before listing your home

The most important reason to do this is that there are likely problems with the home about which you’re not even aware. Being able to address the problems ahead of time increases the chances that everything goes smoothly with the buyer’s home inspection and that you make it to the closing table. You can also use the fact that you’ve had a pre-inspection as a selling point to prospective buyers.

5. Have owned for many years

It’s possible that problems have crept in over the years or that you’re on the verge of needing repairs. Plus, there may be updated safety standards since you purchased and a home inspector can point these out to you.

All of this boils down to the fact that it’s far better to know about a small problem or potential safety issue as soon as possible. Finding out the hard way can either mean a much larger repair bill or losing a sale when a major unknown item comes up on an inspection report. Don’t wait for a problem to occur – usually preventative maintenance is a lot less expensive.

In Flagstaff, you can find reputable home inspectors who will do a full inspection for a few hundred dollars (depends on the size of the house) and provide you with a very detailed report. This is money well spent. Having seen countless home inspections during my real estate career, I have never seen a home inspection come back with nothing wrong.

Featured image ©iStockphoto.com/malerapaso

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Bank of America Allows Select Few to Stay in Homes And Lease Back

Bank of America recently announced a program to allow some struggling homeowners to sign their deed over to Bank of America (similar to a deed-in-lieu) and then rent the home back for up to three years. This pilot program, called “Mortgage to Lease,” will initially be tested in only Arizona, Nevada, and New York and will be offered to less than 1,000 of their customers. Bank of America will hand select the participants and reach out to them. Unfortunately, there is no way to apply for the program as indicated on Bank of America’s press release, “there will not be any opportunity for customers to volunteer or apply for consideration.”

According to Bank of America, those who successfully complete the program will be forgiven of their mortgage debt. They will then be expected to rent their home back at market value, which would presumably have to be less than their current mortgage payment for their participation to make sense.

It’s a very narrow scope of who would qualify for this program. The loan must be delinquent for more than 60 days, the home must be owner-occupied, foreclosure seems inevitable, no second liens, you have to be able to afford the market rent payment, and the loan has to be owned by Bank of America (even if you currently make your mortgage payments to BofA, they may not technically own the loan).

My assumption is that we’ll likely not see this in Flagstaff, at least not initially. I’m guessing they’d want to stick to a few large markets to get the administrative efficiencies of dealing with fewer property managers and analyzing fewer rental markets. I’d be curious to hear from anyone in Arizona who’s solicited for the program outside of the Phoenix area.

Keep in mind that Bank of America is only offering this to 1,000 people, which represents a very small fraction of all their customers facing default. Even if a homeowner isn’t contacted for this program, it’s important that they know there are often better options than foreclosure. Many people could still be eligible to do a short sale and avoid many of the consequences of foreclosure.

Sources:
Bank of America Press Release

Distressed Property Institute

Special thanks to Alex Charfen of the Distressed Property Institute for keeping us CDPE®’s up to date on these issues.

As a disclaimer, this is not intended to be advice, legal or otherwise. It is also not intended to be an official or comprehensive guide to this program, as their terms could change. See Bank of America’s website for more information.

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Home Sales and Prices Climbing in Flagstaff – Shortage in Some Segments

The Flagstaff real estate market appears to be heating up and there’s even a shortage of homes in some segments!

The number of homes sold in March jumped up 69% over February of this year and 18% over March 2011. The inventory of homes available for sale remains lower than usual and almost a third of the homes on the market are under contract, which is higher than it’s been in quite some time.

The above figures are for all of Flagstaff and the immediately surrounding communities. If you look at just Flagstaff city limits, the market is showing even more signs of improvement, to the point where it leans slightly more towards a seller’s market.

One of the most in-demand segments of the market right now is townhomes. As of this writing, there are only 74 townhomes on the market, with 30 of those under contract! Given the current pace of townhome sales, this equates to 4-month supply of available townhomes – solidly in the territory of a seller’s market. Certain price segments are also in the 4-month supply or better!

The trailing average price has risen for 10 of the last 12 months, for a total increase of 6.3% in the past year. It’s possible that prices had over-corrected downward and are now adjusting back to where they should be based on current supply and demand.

If you think you can’t sell if you’re not in a short sale or foreclosure, think again – over half of all homes sold were not “distressed” sellers and, again, the inventory (your potential competition) remains lower than it’s been. Please contact me for further info on what the current market conditions mean for you and the sale of your home.

Source for Statistics: Northern Arizona Association of Realtors MLS – Flagstaff area residential home sales.