Monday, October 28, 2013

5 Things to consider when buying a resale home

The decision to buy a resale home is one of the most important ones your family will ever make. In order to be properly protected, here are 5 things to consider:
 
1. What information is the seller providing in advance?
Sellers used to provide property disclosure statements, telling buyers in advance about the condition of their homes and disclosing problems. Lawyers told them not to do this anymore, because of the potential for lawsuits. Some sellers are now conducting home inspections by a professional home inspection company before they list the property for sale and are giving a copy of the report to any buyer. This has proven to be a benefit to a seller, since they can correct any deficiencies noted by the inspector so they do not have to negotiate with the buyer later after the buyer conducts their own home inspection. Some sellers are also providing home history reports, which can be obtained from homeverified.com or Iverify.com which indicate whether the home has been the subject of an insurance claim for water, fire, flood or sewage backup, and whether the home was ever listed as a grow house or meth lab. The more information a buyer has in advance, the more informed their purchase decision. Still, even with this information, buyers should complete their own home inspection before committing to any purchase.
 
2. Ask the seller hard questions
Ask the sellers or their agent if they have had basement flooding problems, or mould or roof leaks, even if the leaks have been repaired, or any other adverse neighbourhood conditions, whether it is a suicide or murder in the home, or a half way house down the street. Watch how they answer. Sellers are required to respond truthfully to these questions if you ask them directly. If the seller refuses to answer or acts suspiciously, then you need to discuss this with your home inspector and your real estate agent and either adjust your purchase offer or walk away.
 
3. Check with the neighbours
During your home inspection, or before you put an offer in the first place, walk around the neighbourhood and ask the neighbours about the house you are interested and the neighbourhood itself.
 
4. Include the right additional clauses
Make sure that everything you expect to receive on closing is included in your offer. This includes mirrors, closet organizers, window coverings and TV brackets. Ask for 2 complete sets of keys, to get into the home and garage, especially if it is a condominium unit.
 
5. Make sure you can afford it
Get qualified in advance by a professional mortgage broker or your bank so that you know how much you can safely borrow. Make sure your lender will complete their appraisal of the property before you waive any financing condition. Be careful about getting caught up in a bidding war, because if your lender thinks you paid too much, they will not lend you what you may be expecting.
By following these tips, you should be better protected the next time you buy a home.