What to expect from a Home Inspection

The home inspection provides buyers with a critical opportunity to uncover faults in their dream home before they make a purchase. When done correctly, it gives buyers insight into the home so that they have a realistic idea of its condition.

It also provides an opportunity for the seller to fix any problems or to negotiate pricing so that a fair deal is reached.

Before any of these can take place, a home inspector must be selected. Chances are good that the buyer hasn’t had to do this before. Your Realtor may have some reliable suggestions since they have certain inspectors with whom they have worked in the past. However, it also doesn’t hurt to do your own homework so that you can be certain that you’re comfortable with the home inspector’s qualifications.

Questions to Ask When Looking for a Home Inspector

It isn’t wise to simply hire the first inspector that you find when you do an online search. The more carefully you do your research, the more likely you will be to find a well-qualified inspector in whom you have confidence.

Ask prospective inspectors about their training, qualifications, certifications and years of experience. You’ll want to ask about any related work experience the inspector may have, and question them about their knowledge of local building codes. Also, don’t forget to ask for references and referrals. Check these before proceeding.

It’s critical, and in many instances required, that people purchase home insurance policies. While your chosen home inspector is performing a basic review of the property, it might make sense to ask for some extra checks to try to score some discounts on the price of home insurance.

Check with your current or prospective insurance company to ensure that your inspector’s findings will be acceptable to use for this purpose. Some insurance companies want to send out their own inspector to perform this task, but others are willing to accept the conclusions of any qualified professional who produces a thorough report.

An inspector who’s looking at a home for insurance purposes is seeking to identify any opportunity to increase safety and security within the home. This means locating any liability risks or potential fire hazards. The inspector also will look for mold or the signs of previous water damage.

Moreover, the insurance inspector will look at the roof, windows, plumbing, heating and electrical system. Even the quality of materials used in the home’s construction will be considered.

If all appears to be in order, then you’ll probably be in line for some substantial insurance discounts. It also may be possible to address any issues and request a supplementary inspection to obtain discounts at a later date.

The Main Parts of a Home Inspection

The inspection is your last, best opportunity to discover defects on the property and to try to induce the seller to fix them. In general, home inspections focus on these elements:

-Roof
-Structural
-Electrical

Basically, the inspector is reviewing things like structural components, the foundation, plumbing, HVAC system and the electrical system. These are where the most common and potentially costly problems are likely to be found.

Normally, inspections do not include looking for certain more specialized things. For instance, a basic home inspection is unlikely to look for the signs of an infestation of wood destroying organisms. These inspections also are unlikely to test for radon or asbestos, and the inspector probably won’t examine fireplaces and chimneys.
The detection of mold problems or the presence of lead piping or paint typically also are not included. It further may not fall under the inspector’s purview to look at septic systems and wells.

Four point inspections, which typically are carried out by inspectors working on behalf of insurance appraisals, also are not included in the ordinary buyer’s inspection. This four point inspection takes an in-depth look at the HVAC system, the roof and structure, plumbing and electrical systems. Generally, this inspection is not as thorough as the one undertaken during a buyer’s inspection. However, it may be necessary for insurance purposes.

What Happens During the Home Inspection?

Expect for the inspector to remain on site for between two and four hours, depending upon the house’s size. The inspector will make a considerably detailed review of the structure, and he will probably need to access all areas of the home including the attic, basement, garage and any crawl spaces.

The inspector will check the roof for damage and the plumbing for any signs of a leak. He’ll check to see that the windows are properly aligned and that the siding isn’t damaged. All the while, he will be making notes of any problems or unusual items that he finds.

Typically, a full written report will soon be available for review by the buyer, seller and their Realtors.

Should Buyers Be Present for the Inspection?

It makes sense for the buyer to be onsite during the inspection. You may want to take photographs of damage or potential problem areas. This also could be your best opportunity to ask some questions.

What Should the Report Look Like?

You don’t necessarily need to be alarmed if the report seems long or appears to list dozens of problems. Many of these issues are minor and don’t need to be addressed with the seller. However, you’re looking for problems that may be deal-breakers or for issues that you’d like to ask the seller to fix before a purchase is completed.

Leverage the Inspection for Negotiations

The findings of the home inspection can be used to negotiate a lower price or to get the seller to fix problems before the purchase. The seller may make counteroffers, and it’s up to you, relying on the advice of your Realtor, to decide when it’s time to compromise and when it’s time to walk away.

The home inspection is a critical part of the buying process. Choose your inspector carefully, and use their report to leverage your negotiations with the seller.

Most Common Home Inspections

Full Home Inspection = A home inspection is a visual evaluation of a home’s condition. Home inspectors typically provide inspection services to determine the performance of the home. The inspection is not just about identifying problems with the house but helping you become more knowledgeable about your home.

Wind Mitigation = During this inspection, our inspector looks for key features and add-ons that will reduce the amount of damage on your home in the likely event of a hurricane or the occurrence of strong winds. If a home receives these protective features, the homeowner will qualify for an insurance discount, up to 40%, on the insurance premium.

4 Point Inspection = A 4-point inspection focuses on 4 main aspects of a home: HVAC (Heating, Ventilation and Air Conditioning), Electrical wiring and panels, Plumbing connections and fixtures, and Roof. The inspection report will describe the condition and age of these elements. This inspection is important because insurance companies have resisted to issue Homeowner Insurance Policies on older homes (25 years old or more). Their concern is that there may be conditions in an older home that could become a liability to them.

Mold Inspection = Mold inspection is, for the most part, a visual inspection of a house. There’s no special equipment involved aside from a good flashlight and tools that are sometimes needed to access restricted areas (like removing grates to inspect HVAC ducts). Some mold inspectors may use cameras. A moisture meter might also be useful in determining if a particular area is wet, especially after remediation.

Mold Testing = In a mold test, an inspector will go in a test for any possible mold spores or microbial growth above and beyond the safe moisture levels. Many times a mold inspection will include testing, but make sure to ask the inspector if they offer both combined or as two separate inspections.

Wood Destroying Organism (WDO) = A proper WDO inspection looks for evidence of infestation by termites (both subterranean and dry wood types), wood decay, wood devouring beetles, as well as evidence of past infestations, damage to wood, or conditions conducive to infestation; and evidence of past treatments. This inspection is required by FHA, VA and HUD mortgages.

Major Systems and Appliances

Item 

Average Life 

Average Cost

Roof 

15-25 years 

$8,000-$25,000

Exterior paint/siding 

4-10 years 

$2,000-$10,000

Furnace 

15-20 years 

$1,500-$4,000

Central air conditioning 

5-15 years 

$4,000-$9,000

Water heater 

10-15 years 

$500-$1000

Septic system 

15-25 years 

$6,000-$20,000

Dishwasher 

5-12 years 

$400-$800

Garbage disposal 

5-12 years 

$150-$250

Refrigerator 

15-20 years 

$800-$2,500

Stove 

15-20 years 

$600-$1,500

Washer/dryer 

8-12 years 

$500-$1000/each

What the heck is going on in the Orlando real estate market? (My Rant)

So today I am going to be sharing a little bit about what is going on in the real estate market. OK, we have had a crazy amount of inventory issues in Orlando, and I know we’ve seen this throughout the entire United States, but really, Orlando has taken a huge hit. We’ve had a lot of people coming from the northeast and the West Coast, relocating to Florida and making it really difficult for Floridians to purchase a home in their own backyard.

I wanted to go over a few stats that have happened just from Friday till today. CNBC reported actually that in the US there were nearly half as many homes for sale at the end of February compared with a year earlier, according to a new calculation by Realtor.com. Now, a pullback from sellers resulted in roughly 207,000 less homes that were newly listed for sale in the first two months of 2021a compared with the average the same period over the last four years.

That’s a big chunk of inventory that’s missing from our market. Now, in January, prices were up just over 10 percent year over year. Now, that’s according to CoreLogic. So let me give you an idea what this looks like. We have yet to see a price dip or decrease in the last 11 years. That’s not normal because of real estate cycle typically is about seven to nine years and then it kind of shifts. We haven’t seen that downturn, which we’re hoping the market, which it does, will correct itself sooner rather than later.

We don’t see a bubble of sorts… It’s not going to look anything like it did in 2008. It’s just not going to happen in that same way. We don’t have the same elements that were going on back then. That’s not what’s happening here. It’s people just aren’t moving. I’ve lived in the same house for eight years in August. That’s crazy. I have never lived in a house longer than two years in my entire life, which I know is not the norm.

It’s not the usual. However, my age demographic typically was the one that would be we were forecasted to be hopping from house to house in the tiny home kind of community, basically just not staying still, which ironically has flipped the script because our generation is showing that while traditionally you would see people resell within five to seven years, we’ve seen that number increase from seven to 10 years and some even higher. So it’s very interesting to see that people are staying put longer, especially in this market.

I mean, come on, even if you purchased a few years ago and you have equity, where are you going to go? There’s no inventory. Homes are crazy expensive. So even if you wanted to, are you really ready to take on a mortgage that’s double what you have now or almost like starting all over, even if you have a good down payment and you’ve got equity in your current home? People just don’t want to take that risk and then potentially go into a property that the bubble is going to pop or something’s going to happen where they’re going to lose equity.

So those are issues for real that are going on now. Higher mortgage rates are going to be cutting further into affordability and could mean fewer bidding wars as a spring market progresses, according to the MLS here in Orlando. I looked this up literally today, 2,514 homes in all of Orange and Seminole County are for sale. I don’t know if you guys understand how few home those how few homes those are, but that’s crazy. So Orange County, for those of you that aren’t from Orlando and don’t know, Orange County is where Disney, Universal, SeaWorld…etc.

That’s the hub of Orlando; downtown Orlando is there. And Seminole County is a smaller county right northeast of Orange County it pretty much hugs the northern side of Orange County. And it is just north of UCF area and it goes across all the way to the Apopka side being east Orange now with this county.

We have those two counties combined over twenty five hundred homes, which makes it very difficult for the influx of north, east, north and west coast people that we have coming in, including those that have been renting for a few years, saving up money to try to buy the first home that live here in central Florida. So it’s really difficult. Now, what I did was I looked at where I live in Oviedo, Chuluota, because we share a zip code with for part of Oviedo and all of it.

We don’t really we have 45 homes for sale. Now, those are just homes. Those are condos and townhouses. That’s it. And that can range anywhere from the smallest minimum to over two, three, four million. I think the most expensive was like four million. So that’s the gamut. By the way, there’s only like one four million dollar house in all of Oviedo and Chuluota, so that’s not the average. The average price point in Oviedo is $350,000, which is really high for an entry level first time homebuyer.

It really has increased. It has increased over one hundred thousand in the last few years, which is a huge jump. According to GoBanking Rate and MSA from the Consumer Financial Protection Bureau, they were stating that some cities, including Orlando, are actually going to be vulnerable to a housing downturn more than others. So they did a poll with 40 different cities and what they realized was Orlando was one of them. I’m going to give you the stats on Orlando.

So Orlando, the total housing units in all of Orlando is one hundred and thirty eight thousand four hundred fifty six. Now, the percentage of mortgages in Orlando that are delinquent between 30 and 89 days is 2.1%. So two percent of all of those hundred thirty eight thousand homes are delinquent between a month and three months. Now, the next percentage is even sadder. So over 90 days delinquent, we have one percent.

Three point one percent of homeowners are delinquent in Orlando on their mortgage. They’re waiting for foreclosure because foreclosures have been unable to happen because of Covid and all of the delays, because of legislation that’s in place and regulation title has not been able to transfer to the banks and banks have not been able to foreclose. Those continue to accumulate because there’s going to come a point where banks have to foreclose. They’re losing every single minute that these are delinquent and there’s delinquent ones that I’m not even counting into the mix of this, that whatever the bank has worked out with those individuals, families, et cetera, aren’t in this mix.

These are ones that are basically waiting for foreclosure. That translates to one in every six thousand four hundred eighty one homes are in foreclosure or will be in foreclosure. So the homeowner vacancy is six percent. While finding a home right now seems like an impossible proposition to buyers, there may be more possibilities in the future. The condition of those homes uncertain. Typically, foreclosed homes are they are distressed homes. We just don’t know what level of distress they’re in, but they are going to be more opportunities for buyers in the future.

It’s a rough market out there. It’s really challenging for buyers that are trying to look for their very first home. And I wish them well in their search. Appraisals are coming back pretty steady, but many of them are coming back a little bit lower. Where we have seen a challenge is in VA loans. That’s the only place that our brokerage has actually seen issues with the appraisal. But outside of that, cash offers don’t need it and conventional, we’re not seeing as many, but I have heard from lenders and other Realtor friends that they are seeing a dip in the appraisals.

Appraisals are coming lower. We’re in a very weird market where traditionally a seller will lower the purchase price to match the appraised value. But because there’s multiple offers, what a lot of them are doing and we’ve done this in the past as well, because we work for the seller when we take a listing, is that we make the buyers pay out of pocket a percentage or X amount to meet up either in the middle or cover what the appraised value is to the purchase price.

It’s not to the benefit of the buyer because they are paying above above the appraised value of a home. But in this market, it really is difficult, especially people who need to move, have been dying to move or for whatever reason, just really want that house.

That’s what we’re seeing. If homes are on the market longer than a week or two, be careful because homes are flying off the market.

Within the first two weeks, 55% of homes are being sold. They’re under contract within two weeks. In Orlando, it’s actually much shorter. We are seeing that houses are flying off within three or four days. If you see on the market for six days, I will tell you it’s only because they’re waiting for the multiple offers situation and they’re kind of reviewing all of the offers together. That’s what’s happening. This is what the market looks like.

I try to keep people updated as much as possible. Inventory still low. So it is what it is as we continue, as we see legislation change, foreclosures start coming on the market, we’re going to see a little bit more of an ebb and flow in the market. But right now the demand is incredibly high, supply is drastically low, so that’s where we’re at right now. If you guys have any questions ever about the market, you can always give us a call at 407-801-9914.

You can visit our website at WaypointeRealty.com. You can comment on YouTube and we will respond to your questions, concerns, request anything you want to talk about. But please continue stay tuned and we will be doing a first time home seminar just to kind of give people understanding of what the process looks like in this market and in any market, really like what it looks like to purchase a home from beginning to end so we can always be educating our consumers every chance we get.