[N/A] Yes or No on Home Inspection

[ARFlyer]

I have the great opportunity to buy a family home for way below market. The house was built for my great uncle and aunt in the early 80s and sat unused for about 15 years. Since then it's been a rent house. The house needs work and wouldn't pass any inspection, especially electrical.

However, is it wise to get an inspection so I'll have a list of the crap that needs to be fixed or upgraded to modern standards?

 

[AggieMike88]

YES!!!

Watch just about any TV show with Mike Holmes to understand why.

With the right inspector, not only will you get a list of what doesn't meet code, but you can get estimates of the cost to bring it back to code and a little beyond (aka you're much happier in long run).

Then you can use these costs to negotiate the heck out of the purchase price.

 

[citizen5000]

I have the great opportunity to buy a family home for way below market. The house was built for my great uncle and aunt in the early 80s and sat unused for about 15 years. Since then it's been a rent house. The house needs work and wouldn't pass any inspection, especially electrical.

However, is it wise to get an inspection so I'll have a list of the crap that needs to be fixed or upgraded to modern standards?

Never buy a used home without a minimum of a termite inspection. If you want more use a reputable inspection service. Many of them are scamming to get work and will find 'things' that are not there if they are also contracted to fix what they find.

 

[ARFlyer]

YES!!!

Watch just about any TV show with Mike Holmes to understand why.

With the right inspector, not only will you get a list of what doesn't meet code, but you can get estimates of the cost to bring it back to code and a little beyond (aka you're much happier in long run).

Then you can use these costs to negotiate the heck out of the purchase price.

I'm already getting the house for 30% of market. So this will be just for the improvements and fixing crap.

 

[Anthony]

Yes!!! plus one more !

 

[ARFlyer]

Never buy a used home without a minimum of a termite inspection. If you want more use a reputable inspection service. Many of them are scamming to get work and will find 'things' that are not there if they are also contracted to fix what they find.

Yeah, I have a list from the family friend who's doing my mortgage paperwork.

Most of it will be sweat equity between my father, a contractor friend and myself.

 

[Clark1961]

i use an inspector when someone else is paying for it. When it's my dime I'll use tradesmen to give repair or upgrade estimates on things that I can identify.

For a home used as a rental looking at hvac would be major. On the electrical side get an estimate to upgrade the service to 150 or 200 amps. A simple plug tester will tell you the same thing an inspector will tell you about the plugs. Appliances are appliances. They will break when they want to break.

 

[Greg Bockelman]

Even with a home inspection, you can end up with a nasty surprise or two. On our house in Guam, we had a home inspection done and we negotiated accordingly. But we have subsequently discovered that our ENTIRE 1970's era sewer system needs to be replaced. Pretty much killed our contingency fund. Make sure you HAVE a contingency fund.

 

[ARFlyer]

i use an inspector when someone else is paying for it. When it's my dime I'll use tradesmen to give repair or upgrade estimates on things that I can identify.

For a home used as a rental looking at hvac would be major. On the electrical side get an estimate to upgrade the service to 150 or 200 amps. A simple plug tester will tell you the same thing an inspector will tell you about the plugs. Appliances are appliances. They will break when they want to break.

Yeah the electrical work is a disaster. It was done by an idiot. The house has four breaker boxes with nothing labeled. The outside boxes only have have four breakers while the main one is under the house in a unaccessible location...

 

[ARFlyer]

Even with a home inspection, you can end up with a nasty surprise or two. On our house in Guam, we had a home inspection done and we negotiated accordingly. But we have subsequently discovered that our ENTIRE 1970's era sewer system needs to be replaced. Pretty much killed our contingency fund. Make sure you HAVE a contingency fund.

I'm going to get an extra 10k or so on my mortgage for major repairs and appliances. Is that what your talking about?

 

[Clark1961]

Yeah the electrical work is a disaster. It was done by an idiot. The house has four breaker boxes with nothing labeled. The outside boxes only have have four breakers while the main one is under the house in a unaccessible location...

That does sound like get a licensed electrician to give an estimate and see if there are any safety concerns. I wouldn't trust a run of the mill home inspector to know if there was potential for a hot box if the bonding was wrong.

 

[SoonerAviator]

Yeah, I'd be more inclined to want a structural inspection as well as the utilities/termite. It doesn't mean you have to do anything with the information, but if you want to be able to sell it in the future, you should know what will need to be adjusted. Many lenders won't allow purchase without the requisite inspections as part of discovery on the property.

 

[ifly4fun]

If you're financing, especially fha, good luck getting it through an appraisal.. fha will require everything to be up to snuff.

 

[cowman]

Maybe I've just had bad ones but I've never had an inspector tell me anything I didn't already know from using my own eyes. Sounds like you already know it has problems and are planning on doing a lot of DIY work anyway.... so I'm guessing you've got a clue. I probably wouldn't bother.

 

[cowman]

If you're financing, especially fha, good luck getting it through an appraisal.. fha will require everything to be up to snuff.

There is that.

I have a friend who is very capable at DIY home repair and has found multiple homes that have problems he could easily fix and are affordable. Couldn't ever buy them because of that stuff... regulation is always a double edged sword.

 

[ARFlyer]

That does sound like get a licensed electrician to give an estimate and see if there are any safety concerns. I wouldn't trust a run of the mill home inspector to know if there was potential for a hot box if the bonding was wrong.

Yeah. I also want to install a panel for portable gen connection and a whole house one in the future. We have monthly, if not more frequent, power outages.

Yeah, I'd be more inclined to want a structural inspection as well as the utilities/termite. It doesn't mean you have to do anything with the information, but if you want to be able to sell it in the future, you should know what will need to be adjusted. Many lenders won't allow purchase without the requisite inspections as part of discovery on the property.

I'm waiting on our friend to call back with everything I need to start the ball rolling. I know I'll at least have an appraiser to get the current market value.

If you're financing, especially fha, good luck getting it through an appraisal.. fha will require everything to be up to snuff.

I'm hoping to do USDA Rural with a Rural Improvement loan for the repairs.

Maybe I've just had bad ones but I've never had an inspector tell me anything I didn't already know from using my own eyes. Sounds like you already know it has problems and are planning on doing a lot of DIY work anyway.... so I'm guessing you've got a clue. I probably wouldn't bother.

I went and crawled around underneath to get an idea. Basement work will include at the minimum: insulation replacement, wiring work, internet wiring, a/c replacement for possible mold, and water softener replacement. I can do everything but a/c and major wiring repair.

Outside will include at the minimum: all window replacement, front door replacement, sliding door in master replacement, and deck repair. I can do doors and deck. The windows will have to be a contractor.

Plus everything I want to add to the house. Whole house generator, landscaping, watering system, brick mailbox and a stone firepit/grill. I have piles of brick and stone to use that my grandfather and father have amassed over the years.

 

[Clark1961]

If you're financing, especially fha, good luck getting it through an appraisal.. fha will require everything to be up to snuff.

Never had a lender require an inspection. Never had an appraiser require an inspection. Also never have done an FHA loan.

 

[OkieFlyer]

Are we talking rural AR?

If so, don't sweat the code bull crap. That's city boy stuff. Get 'er done.

We have an FHA loan on our home. Nobody inspected anything.


If your city enforces building permits, and you actually have a code inspector, just be sure you get a permit before doing any work that's visible from the street, and I doubt anyone will bother you. Just got to be sure the city gets their required amount of palm grease.

 

[chartbundle]

On a semi-unrelated note that I just learned about. Depending on the panel manufacturer you can get an interlock for your main panel that lets you put a generator breaker in without needing a distinct generator panel. Turn off main, turn off circuits you don't want powered, move interlock, start generator, turn on generator breaker, turn on circuits you want. Far cheaper than a full generator panel as you just need an inlet and a breaker and the lockout. Obviously this doesn't apply if you want automatic load switching.

 

[TCABM]

Would you buy a plane without a prepurchase inspection?

Home inspections like you're talking about aren't pass/fail, but instead to give you an idea of what work needs to be done.

Things to think about are structural, roofing, electrical, HVAC, plumbing/sanitation. Even if it's way below market value and you do all the work, there is materials cost that needs to be taken into consideration.

What's your goal for the investment in the house? Flip, short term ownership, long term ownership, income, investment can each have their own path of getting to there from here. You should really think this through since there are 2d/3D orders of effect in each of the decisions. Also, can you financially absorb the cost of the materials and accept the time it will take you to get to there from here?

 

[ARFlyer]

Are we talking rural AR?

If so, don't sweat the code bull crap. That's city boy stuff. Get 'er done.

We have an FHA loan on our home. Nobody inspected anything.


If your city enforces building permits, and you actually have a code inspector, just be sure you get a permit before doing any work that's visible from the street, and I doubt anyone will bother you. Just got to be sure the city gets their required amount of palm grease.

I'm in rural, will be city in 10, AR. The house is in the extraterritorial jurisdiction of Little Rock. There is currently a fight between us, the county, and the city over who controls the area. Currently we fall under Little Rock Planning Commission and Zoning. I have no idea if we require Little Rock building permits or it's still Get ' er done territory. I'm hoping for Get 'er done!

On a semi-unrelated note that I just learned about. Depending on the panel manufacturer you can get an interlock for your main panel that lets you put a generator breaker in without needing a distinct generator panel. Turn off main, turn off circuits you don't want powered, move interlock, start generator, turn on generator breaker, turn on circuits you want. Far cheaper than a full generator panel as you just need an inlet and a breaker and the lockout. Obviously this doesn't apply if you want automatic load switching.

We did one of those small inline six circuit boxes at my parent's house one weekend a few years ago. However, my father is wanting to upgrade to whole house.

I thought we'd be able to do it at this house. One of the first things I'm going to do is turn off the entire house and go breaker by breaker and map the circuits.

 

[weilke]

I found the home inspectors to be of limited value. They got hung up on 'window counterweight needs replacing' but missed biggies like corroded air-handlers and roofs that are at the end of their useful life.
I got much more useful information from a remodeling contractor who looked at the place and gave me rough estimates of what it costs to do certain things that he thought necessary. An electrician can give you an idea what it tales to make it safe. An HVAC contractor/plumber can tell me what the mechanicals needed. If you look in the smallprint, both roof and HVAC are excluded from a regular home inspection.

At 1/3 of market and after a long vacancy, this is a project home, not a regular transaction. Unless you have a bank or muncipality that requires a 'home inspection', I would directly go with trusted tradespeople to give you numbers.

 

[weilke]

Yeah the electrical work is a disaster. It was done by an idiot. The house has four breaker boxes with nothing labeled. The outside boxes only have have four breakers while the main one is under the house in a unaccessible location...

Was your great uncle the DIY type who had buddies do the work for him ? You'll need at a minimum an electrician to tell you what it costs to update this to code.

 

[ARFlyer]

Was your great uncle the DIY type who had buddies do the work for him ? You'll need at a minimum an electrician to tell you what it costs to update this to code.

More like my grandfather had buddies that did the work on every family house on the land at cost.

My parent's house has two main breaker boxes that power random circuits. E.g. My bedroom main light, fan and three outlets are in one box with one outlet and one light in the other box...

 

[wsuffa]

Termite/Pest - mandatory and will be required by the lender.

If you've bought enough houses and know what you're doing, you can dispense with the overall home inspection as my experience has been that they're more interested in writing up whether the oven thermostat is close to the marked level and they miss the big code stuff. Last house I hired and inspector & specified that I wanted to know about any code issues or the "big" stuff, and he missed on both as I discovered later. Yet his contract was full of language that you shall only use the report for this or that and must use it to renegotiate the price.

In your case, since you know a couple of key areas that need work, get estimates from professionals in those areas for repairs. Electrical, plumbing are the big ones. You might pay a structural engineer to take a quick look to make sure that nobody did something stupid like notch a structural beam or joist. But hidden stuff won't be found by a cursory non-destructive inspection.

If you're unsure, pay the few hundred bucks and get a qualified inspector that's a PE. Don't cheap out or get recommendations from the real estate agents as you'll not get what you need. There are firms that inspect houses under construction and take on builders - that's the kind you want.

As for appraisal, most appraisers won't look, and if they do they won't know what they're looking at. Not all, most. They'll check room sizes and verify square footage. Condition is secondary. Unless the house is really bad, this won't be a major issue. If all else fails, see if you can get a construction loan or bridge loan to do the work & place the mortgage afterward.

 

[Zeldman]

Sounds like the house needs a lot of work. Will anyone finance it knowing it needs a lot of work?

And I agree, an appraiser does not look for discrepancies, but instead is an eye for the lender.

I just bought a house recently with 75% down. Do not tell the bank that the down payment money came from being the best crack dealer in the county....

 

[wsuffa]

I
At 1/3 of market and after a long vacancy, this is a project home, not a regular transaction. Unless you have a bank or muncipality that requires a 'home inspection', I would directly go with trusted tradespeople to give you numbers.

Agree with you. My lender did not require one, neither did the municipality. My insurance company asked for a copy, but did not mandate that an inspection be done.

 

[weilke]

Agree with you. My lender did not require one, neither did the municipality. My insurance company asked for a copy, but did not mandate that an inspection be done.

I have sold to VA loan buyers and they were required to get it inspected. I believe FHA and USDA rural development loans have specific inspection requirements.

 

[weilke]

I just bought a house recently with 75% down. Do not tell the bank that the down payment money came from being the best crack dealer in the county....

Nothing confuses a bank more than a big downpayment. They want the source for every deposit in your checking account, even if it's a transfer from your brokerage account.
They want to avoid that you owe money to 'Luca and Brasi' whom yoy would pay before the mortgage company in an attempt to keep your knee-caps intact.

 

[weilke]

More like my grandfather had buddies that did the work on every family house on the land at cost.

Ah, that kind of deal. Subdivided family farm. Make sure the the 'market price' accounts for location on a family farm and that you don't overpay. That '30% below market' is gone quickly if you need electrics brought to code or if your sewer main runs up-hill.

 

[ARFlyer]

Ah, that kind of deal. Subdivided family farm. Make sure the the 'market price' accounts for location on a family farm and that you don't overpay. That '30% below market' is gone quickly if you need electrics brought to code or if your sewer main runs up-hill.

Actually, the septic tank pipe runs about a foot off the ground underneath the deck and dives into the yard about three feet from the house. I've tripped over that pvc pipe many times growing up.

Oh when I mean deck, I mean the second story deck. The pipe literally runs across the garden behind the house.

This house has frontage on the county road and controls access to the rest of the farm.

 

[Anthony]

This house has frontage on the county road and controls access to the rest of the farm.

Any easements, or right of ways? Any other restrictions that run with the property/land?

 

[ARFlyer]

Any easements, or right of ways? Any other restrictions that run with the property/land?

Every house has easements for the community driveway after my grandfather passed away without a will.

 

[flyingron]

Notwithstanding Mike Holmes (who by the way is in Canada and things are different up there), the Home Inspection industry is one of the biggest scams out there. I've got little good to say about them either as a buyer or a seller, but they are customary now and more often just a bargaining chip more than anything else. I even had one of the better ones I've come across point out how they perpetrate this fraud. Suffice it to say, it's about the same as hobos making marks on your fenceposts if you're an easy mark or kind heart or likely to call the police.

On the other hand, the one thing I would recommend is OWNER'S TITLE INSURANCE. I wouldn't even take the gift of property from my sainted aunt without getting title insurance on it before I proceeded.

 

[James331]

Depends on the inspector.

Find someone who actually builds homes to look at it.

 

[weilke]

Actually, the septic tank pipe runs about a foot off the ground underneath the deck and dives into the yard about three feet from the house. I've tripped over that pvc pipe many times growing up.

Oh when I mean deck, I mean the second story deck. The pipe literally runs across the garden behind the house.

This house has frontage on the county road and controls access to the rest of the farm.

I get the picture ;-)

Which leads me to another question:

Is there anything that affects the marketability of the property if you ever decide to sell. Here are some doozies I have seen with subdivided farm property (subdivided by uncle Billy, not as part of an approve subdivision plat):

A. unrecorded easements for access roads into other portions of the family compound. Why would uncle bob 'waste money on a lawyer' to record an easement if you can just take the dozer and cut a road.
B. unpermitted creek crossings
C. unpermitted wetland crossings
D. Shared septic fields
E. Shared electrical hookups that the coop won't service because Gramps used 75ft poles when the coop requires 80ft poles (and 105 and a 50ft easement if you replace them today)
F. Property Boundaries with ambiguous descriptions that lack reference to a monument.

B,C and D may not be an issue at the county level, but if the state ever wanders on your land you are in a world of hurt. A, E and F may not bother you as it is family, but it would affect the marketability if you ever decided to sell (or if you need a mortgage).

 

[wsuffa]

I have sold to VA loan buyers and they were required to get it inspected. I believe FHA and USDA rural development loans have specific inspection requirements.

Yep. I was (perhaps naively) assuming that wasn't the case here given the circumstances laid out here. My last experiences with FHA in urban areas was that no inspection was required, just recommended.

Notwithstanding Mike Holmes (who by the way is in Canada and things are different up there), the Home Inspection industry is one of the biggest scams out there. I've got little good to say about them either as a buyer or a seller, but they are customary now and more often just a bargaining chip more than anything else. I even had one of the better ones I've come across point out how they perpetrate this fraud. Suffice it to say, it's about the same as hobos making marks on your fenceposts if you're an easy mark or kind heart or likely to call the police.

Not as big of a scam as "home warranty". But yeah, both are bad.

On the other hand, the one thing I would recommend is OWNER'S TITLE INSURANCE. I wouldn't even take the gift of property from my sainted aunt without getting title insurance on it before I proceeded.

Yes, this. Mandatory from my standpoint.

 

[Goofy]

Notwithstanding Mike Holmes (who by the way is in Canada and things are different up there), the Home Inspection industry is one of the biggest scams out there. I've got little good to say about them either as a buyer or a seller, but they are customary now and more often just a bargaining chip more than anything else. I even had one of the better ones I've come across point out how they perpetrate this fraud. Suffice it to say, it's about the same as hobos making marks on your fenceposts if you're an easy mark or kind heart or likely to call the police.

On the other hand, the one thing I would recommend is OWNER'S TITLE INSURANCE. I wouldn't even take the gift of property from my sainted aunt without getting title insurance on it before I proceeded.

This is pretty accurate. Been in the industry for 40 years. Inspectors that screw up escrows don't get much repeat business! Thought it would be the perfect retirement gig but learned the tricks real quick....

 

[Zeldman]

I need to become a house appraiser. He came to the house I was buying, took pictures, spent about 1.5 hours there, then asked me how much I was paying for the house. I added a little to the agreed upon price.

Amazing..!!!! The house appraised for exactly that price..!!!!

 

[Clark1961]

I need to become a house appraiser. He came to the house I was buying, took pictures, spent about 1.5 hours there, then asked me how much I was paying for the house. I added a little to the agreed upon price.

Amazing..!!!! The house appraised for exactly that price..!!!!

Wait until they describe a house that doesn't exist for that price. One home suddenly had hardwood floors and tiled bathrooms in one appraisal I had to pay for. Of course it had carpet and linoleum.