The Checks Youll Be Writing Before You Close Your Dream Home

Dated: October 8 2015

Views: 842

The Process Of Buying A House And The Checks You’ll Be Writing


Girl with money

The Process Of Buying A House Requires Checks

I’m not  trying to scare any home buyer’s out there who are getting ready to write some checks for a house they expect to own in about thirty days but there are circumstances that buyers need to be aware of especially if cash is tight and doing this more than once is not an option. The process of buying a house does involve writing checks.When you write a check to somebody you expect to get something in return and when it comes to buying a house you’ll have to write a big check if you are paying cash or a fairly big check for the down payment or closing costs etc. But there are other checks you’ll have to write way before the closing and the harsh reality is that you may end up not buying the house and what do you have for the checks you wrote not a lot. I am writing this post because I spent most of yesterday with a home inspector, a septic inspector and a termite inspector who were doing inspections on a recently renovated  house that my clients are buying. The home turned out to be in great shape but without these inspections it would be impossible get a good overview of the property and exactly what had been done and what it might need done later on.

This House Buying Is Expensive-2

While it hurts to write a check for a home inspection that shows few or even no problems, the money spent on the inspection will pale in comparison to the amount of money you could be spending had you bought the house without knowing what was wrong. If the seller won’t fix them you can walk away, it’s not common but be aware that buying a home comes with some expense and some risk. Do your due diligence and employ all the resources available to you. That starts with the first or second time you are in the house, do the floors move, is there mold on the walls, cracks in the foundation, maybe this isn’t the one.

Home Inspector Gets A Check

The home inspector gets paid either up front or right after they get done with the inspection, some inspectors will allow you to pay at closing, but that is a risk most inspectors don’t want to take. If the deal falls through some people might be reluctant to pay for an inspection on a house they won’t own.  The job of the home inspector is to find any defects or problems with the home, so you are paying for the knowledge that the house is either in great condition or at least you know what’s wrong and can ask the seller to fix the problems, either way that is money well spent. Sometimes the home inspector finds a major issue that just kills the deal for the buyer it could be a structural issue or mold or water damage or Radon and regardless of what the seller will do that buyer is done. Often times it’s not just one problem with a house but a number of fairly big issues that combined are too much for the buyer or too expensive for the seller to fix. Examples of these could be the HVAC unit, the roof, major plumbing or electrical problems. What does a home inspection cost? It depends on where you live, the size and age of the property but a ballpark number for an average size home is between $350-$500.

Termite Inspector Gets A Check

Termites can eat a house in a remarkable short time if the conditions are right and there are no preventive measures in place. Most of the time the damage is contained to a small portion of the house, not always and depending on what they have been munching on it could be a costly and time consuming fix. If you pay for a termite inspection and the inspector finds termites that’s one thing but they will also note any damage the termites have caused and this is commonly in the crawl space or where the house meets the ground and replacing these pieces can be costly. All wood used today and going back a while is treated to deter insects like termites but they can get past it to the untreated wood especially if there is stuff stored in the crawl space. A termite inspection typically costs the range of $50-$75.

If you’re buying a house on county or city sewer then skip this part because you won’t be having a septic inspection done. Believe it or not, not every homeowner knows if they  have a septic tank and a lot of people who own a septic tank have no clue where it is, how to take care of it, what not to put in it and have never had it pumped or inspected. This is a separate inspection from the home inspector and while they are only looking at one system in the house it is equally as important as it can be very expensive to fix problems with a septic system. Age is a factor when it comes to problems with septic systems but not solely and new homes can develop problems just as easily, if the unit was installed incorrectly or if the ground gets water logged, improper use and neglect can also cause problems. Most of the time they work fine and I’ve seen them go untouched for decades and they work fine. I’ve also seen them less than five years old and have problems. Do yourself bank account a favor and get a septic inspection done.

A Southern Mansion in Raleigh, North Carolina

Appraiser Gets A Check

It’s not very common for buyers to spend money on an appraisal and not buy a house but it can happen and you need to be aware of how to avoid it.When you apply for a mortgage the bank wants to know that the amount they are lending you is what the house is worth or at least what they would be able to sell it for, so they order an appraisal. The mortgage broker you are using collects the check or credit card from you to pay the appraiser, it is at this time you need to discuss when the appraiser will be sent out. If you suspect the house might have issues with the home inspection you’ll want to have your inspections done before you spend the money on an appraisal.

If the appraisal comes back below the agreed contract price then you as the buyer have to decide if you want to proceed by asking the seller to reduce the sales price to the appraised value. This is common because most people get loans to buy houses and if it won’t appraise they won’t be able to sell it. In rare cases when the seller refuses to lower the price and the buyer really wants the house they end up bringing a check to the table to make up the difference because the bank will only lend you what the house appraised for.

If the seller refuses to lower the price and you the buyer cannot bring the difference to the closing then you paid for an appraisal on a house you won’t own. If you’re using a Realtor they will have pulled comps to make sure the sale price is in line with other similar homes in the area.If the mortgage broker collects the appraisal fee up front and the deal falls through before the appraiser has been sent out you are entitled to a refund. An Appraisal costs between $300-$400.

Get Out Your Checkbook But Only When You’re Sure This Is The One.

So if you’re a home buyer just be aware that buying a house comes with costs that you may incur without buying a home. Most of them are actually saving you a ton of money in expensive repairs if you buy a house with problems. Often the seller realizes they have to fix major issues with their home in order to sell it. If it’s an older home,an estate sale, a foreclosure you might be buying it as is so you need to know what you’re getting. 

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Richard McKinney

I have been selling real estate in South Florida since 1998 with a specialization in homes, town homes and condos in St Lucie and Martin Counties. My service areas include the cities of Port Saint Luc....

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