Ready to list your home? Are you about to buy your next one?
It is typical for houses to have a few issues, and buyers and seller need decide what they are comfortable with in order to create successful sale or purchase.
1. DAMAGED FLOORING
Flooring sets the tone for the entire home whether or not you realize it. It’s one of the first things a potential buyer will notice when they tour your home. If there’s anything wrong with your flooring, potential buyers will notice. Cracked tiles, carpet stains, or scuffed hardwood floors are enough to change buyers’ minds and could affect the appeal of buying your home. Flooring sets the precedent for the rest of your home, so it’s important to make a good first impression.
if you're buying: Hire a licensed home inspector to evaluate every aspect of the property, including the flooring. If everything about the house is perfect for you, but you discover major flooring issues that require repair for replacement, estimate the cost and use those numbers to negotiate a lowering selling price.
If you're selling: Repairing or replacing your old flooring may be expensive. However it will improve the look of your home, increase its resale value and help you sell the home faster.
2. FOUNDATION DAMAGE
A home's foundation is vital. It's the core of the structure, and if there are major problems in the foundation, it's more likely that there are other issues looming in the home. Signs of potential foundation issues may include:
Uneven floors
Doors and windows that stick
Dampness in lower levels
If you’re buying: A formal, expert inspection can help pinpoint how serious a house’s foundation damage is, and what it would take to repair it.
If you’re selling: Be willing to either repair it or lower the asking price substantially, so this doesn’t have to break the deal.
3. FLOODING
Flooding issues can plague a property for a lifetime. Not only are the repairs expensive, but if the home has a history of water damage, obtaining adequate flood insurance coverage may be difficult and may be expensive, too.
If you’re buying: There are ways to deal with water intrusion. They might include putting in new drainage systems or waterproofing foundations. These can be expensive solutions, though. You'll want to get an estimate before you move forward with your purchase.
If you’re selling: If a house has a latent history of constant water damage occurring, that could cause a property to face its largest reduction in value. However, you can improve the situation by doing some repairs. It might sound counterintuitive to repair a home that you’re going to sell, but doing so can actually make the whole process a lot easier for you.
4. PEST INFESTATION
As a homebuyer, it’s important to shop around with a sharp eye; you want to look for signs of pest problems on site. Some obvious clues might be droppings left by rodents, in addition to actual live or dead pests like ants, flies or cockroaches.
If you’re buying: Before you buy, make sure you ask the seller or realtor when the last pest inspection was done on the home… and then schedule one of your own for absolute peace of mind about your potential purchase. Pest damage isn’t necessarily a deal-breaker, but it can be costly to remediate if it’s been allowed to go on for years unchecked. Be sure to negotiate remediation into the bid you make.
If you’re selling: Have your pest control documentation to present to potential buyers, detailing your preventive and proactive measures to keep your home and property pest-free. If you have a routine pest service in place that you’re happy with, share this with the buyer, who might want to continue the service by assuming the cost of continued service.
5. ROOF REPAIRS OR REPLACEMENT
Roofing is a major structural element that can protect the home or leave it vulnerable to damaging leaks. Old roofing may need a full replacement (which can be pricey), but even minor damage such as missing shingles should be addressed quickly.
If you’re buying: Have an inspector check the roof and estimate how many years of life are left in it. New roofs can be expensive depending on the size, material and your location. If it’s a year or two away from replacement, this might be a deal-breaker unless the seller will negotiate.
If you’re selling: If small repairs are needed, make them so you can reasonably set a higher asking price. If the roof is nearing replacement time, be ready to negotiate the cost of a new roof into the deal.
6. OLD ELECTICAL SYSTEMS
Pay close attention to the electrical systems of a home, especially if it's an older property. Old electrical systems can be a fire hazard or may not supply sufficient service for your needs. Updating an electrical system is expensive, but it's important for your family's safety.
If you’re buying: Hire an inspector to confirm that any electrical work over the years has been done according to building codes. If repairs will be needed and you can't afford them, consider changing your offer, asking the seller to complete the repairs or walking away. Many insurance companies will refuse coverage on homes with electrical systems that may be old and not up to code.
If you’re selling: Know that buyers will either walk away from a home with bad wiring or will ask for a lower price. This happens because insurance policies won’t cover electrical systems that don’t meet code, which can lead to the buyer’s lender refusing to okay the deal.
7. UNPERMITTED WORK
If you discover that any of the renovations or changes the prior owners have made to the home were done without permits, it should likely lead you to walk away immediately. If you buy a home that has unpermitted renovations, the liability of that renovation is then passed onto you, whether you knew of the renovation or not and that could lead to fines, penalties and a reassessment of your taxes.
If your buying: If your home inspector or real estate agent finds that work was done without a permit by the previous owner, schedule an inspection contingency. Buyers have the right to demand that a seller obtain the proper permits retroactively and remove or fix the unpermitted addition before signing the purchase agreement. If needed, buyers might negotiate repairs or terminate the agreement based on the home inspection results.
If your selling: You can sell a house with unpermitted work. However, you're obligated to disclose any unpermitted work done in the home to buyers before they begin the home buying process. While small, unpermitted projects (as long as they’re clearly disclosed to buyers) might not affect the value of your property, when it comes to large-scale unpermitted work, you may have to consider a lower asking price for your listing, since the buyer will have to assume responsibility for the work that was done.
There is another route you can take. You can go back to the city or county and obtain a permit retroactively on already completed projects.
The cost associated with retroactive permitting will depend on the scope and value of the construction. Before going to the city to obtain a permit, you might want to hire a contractor to examine the existing work. They’ll be able to ballpark the cost of bringing it up to code and have an idea of how much is already built in accordance with the existing code requirements.
