A few weeks ago, in a column titled "The Importance of the Right Inspector," I described how to go about selecting a qualified professional to give your soon-to-be-residence a complete physical. I can't recall a time when the inspector pronounced the dwelling to be in 100 percent prefect health.
Inevitably, there's something wrong -- a broken seal on an obscure bathroom window or a closet door that doesn't close like it did upon installation. It might be something the homeowner is totally unaware of -- for example, the inspection reveals a rarely used utility sink in the basement has a slow leak at the elbow joint underneath when filled to half capacity and allowed to sit for half an hour.
Often it's an item that by the sellers' standard was considered a minor gaffe that had little if any effect on their day-to-day activities or quality of life. Consequently, it was simply ignored or relegated to the "honey-do" list for completion at some future undetermined date.
But to the buyer, that inoperable wall outlet in the garage that the current homeowner never used might be absolutely, totally and completely unacceptable. It's a gotta-must-have essential because that's where the buyer will be plugging in the amplifier for his guitar.
Viewed from another perspective, the intent of a home inspection is to clearly outline and define within reason what you're purchasing, warts and all. It'll include what's good and what's bad about the home and allow you to balance what you can and can't live with.
While not absolute, inspection reports are tools that lay bare a home's soul, stripping it of the pretty pictures and dramatic language that impressed you the first time you looked at the Multiple Listing report. It's at this juncture that a buyer's questions morph from location, distance from work, quality of schools and the like into "Is this what you want, what you really, really want?"
In order to shave a few bucks off the closing costs (typically $300-$400), some buyers will ask if it's acceptable to forego the inspection contingencies as outlined in the contract -- a practice I strongly advise against. Buying anything sight unseen or without a clear understanding of the mechanics and subtle details involved might be acceptable behavior when buying a book or CD online, but the dollars involved in buying a home should make clear the necessity of knowing everything you can before you sign on the dotted line.
Next week: Inspection Contingencies 101 and what the purchase contract specifies
THIS WEEK'S TIP: During the course of shopping for a mortgage, you may encounter some unfamiliar terms. One is "mortgage insurance." Generally, buyers who make a downpayment of 10 percent or less will be required to carry mortgage insurance. The theory is that buyers who don't have as much cash into their homes are more likely to stop paying the loan. Therefore, lenders obtain mortgage insurance to protect themselves in case a low downpayment buyer stops making timely or complete payments.
Another term used in lending jargon is "points." A point is a fee equal to 1 percent of your loan that, in effect, allows you to "buy" a lower interest rate. You may find an 8 percent interest rate with 1 point or an 8.75 percent interest rate with 0 points. The points you select are payable at the time you close the loan.
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.
