Recently I had a phone conversation with a buyer who was putting the final dots and dashes on the terms and conditions of a purchase contract. Good cheer was evident. It appeared that all the parties involved were satisfied with the outcome.
I could sense the buyer's anticipation grow now that the countdown had begun to closing and moving. But whoa, I said to myself, tell them what they've won, Johnny! Yes, there's more!
Indeed there is. Some of the most important decisions in the home-buying process still must be made, beginning with the selection of a home inspector.
As fate would have it, soon after I told my client how to find and select the right home inspector, I checked my email to see a message titled "Finding the Right Home Inspector" from the publishers of RisMedia. The information covered simply and comprehensively the essentials every buyer should know about the selection process.
To start, ask your agent for a list of home inspectors who are members of the American Society of Home Inspectors (ASHI), an organization that ensures its members adhere to a rigorous set of standards set by the national board and enforced by successfully passing a variety of exams. Since the standards and practices of home inspection vary from state to state, with no common authorized legal entity charged with regulating their practices, members of ASHI have become the de-facto standard that Realtors® use when suggesting inspectors for the job. If nothing else, it significantly reduces the likelihood of there being a "Bubba" on your job.
Following is a list of questions every buyer should ask when interviewing an inspector. Be sure you fully understand what the inspection will cover and verify the inspector's experience.
1. Is the inspector a member of the American Society of Home Inspectors (ASHI)?
2. What does the inspection cover? Make sure the inspection and the resulting report meet all applicable requirements and comply with the ASHI standards of practice.
3. How long has the inspector been practicing the home inspection profession and how many inspections have they completed? ASHI members are required to have completed at least 250 paid professional home inspections and passed two written exams that test the inspector's knowledge.
4. Is the inspector specifically experienced in residential inspection? Related experience in construction or engineering is helpful but is no substitute for training and experience in the unique discipline of home inspection.
5. Does the inspector's company offer to do repairs or improvements based on the inspection? This is against the ASHI code of ethics because it might cause a conflict of interest.
6. How long will the inspection take? The average for a single inspector is two to three hours for a typical single-family house; anything less might not be enough time to do a thorough inspection. Some inspection firms send a team of inspectors, which results in a shorter time frame.
7. How much will it cost? Costs vary dramatically, depending on the region, size of the house, scope of services and other factors. A typical range might be $300-$500, but consider the value of the home inspection in terms of the investment being made.
8. Does the inspector prepare a written report? Ask to see samples and determine whether or not you can understand the inspector's reporting style.
9. Does the inspector encourage the client to attend the inspection? This is a valuable educational opportunity, and an inspector's refusal to allow this should raise a red flag.
10. Does the inspector participate in continuing education programs to keep his or her expertise up to date? One can never know it all, and the inspector's commitment to continuing education is a good measure of his or her professionalism and service to the consumer. ASHI members are required to complete at least 20 hours of continuing education every year.
This Week's Tip: Shopping for a mortgage
Finding the right lender for your financial situation and the home you're buying isn't hard, but it does require some understanding of the types of lending institutions and their financial vocabularies. In your search, you'll hear terms like "points," "closing costs," "interest rates," "mortgage insurance" and "loan servicing." And you'll have the opportunity to choose from banks, savings and loans, mortgage companies, credit unions and even online companies to find the right lender.
A mortgage payment is made up of two parts -- the principal and the interest. If you purchase an $80,000 home with a $5,000 downpayment, the principal amount of the loan is $75,000. The more substantial figure, however, is the interest. By the time you've finished paying your mortgage -- typically in 30 years -- you will have paid perhaps twice as much in interest as you did in principal. For that reason, selecting the loan with the most favorable interest rate is an important decision. The choice you make will affect your payments for many years to come.
STEVEN J. LOWENSTEIN, a native of Cincinnati, is a Realtor with Coletta & Associates Realtors. He's a graduate of the University of Cincinnati and holds a Master's degree from North Texas State University.
