Whether someone is getting a completely updated house or a fixer, what are the most important things to have in good shape, when buying a home?
The major systems are the most important items. The major systems are the plumbing, electrical, roofing, foundation & the heating/cooling systems. These are the basic components and the most important parts of a house. They are also the big-ticket items if you have to repair or replace them and are a gauge of your future costs in maintaining the property. Look at the "guts" of the house. If you were buying a used car and it had a new paint job, that would be great but you would really want to find out about the engine, brakes and transmission. It's the same with a house - find out about these 5 major systems and see if they were upgraded along with the rest of the house.
When considering a house, what some items a buyer should look at that are red flags?
1) Moisture stains on the ceilings, walls or flooring. Moisture is the number one enemy of any structure. It not only causes damage and deterioration to the property but can lead to mold growth and other issues. It's a big red flag for potential bigger issues.
2) Un-permitted work. All construction work to the property is supposed to have permits from the city. Un-permitted work is not going to be done per building department standards and is generally of inferior grade. Many times it is done in an un-permitted fashion because it cannot meet building and safety standards and be passed by the city. If the un-permitted space is not on city records and included in the square footage, banks may not lend on it, and therefore the loan may be less.
3) Sloping floors and other indications of the house shifting or sinking. Older homes are going to have some settlement and be somewhat out of level due to their age, but when it gets to the point where windows and doors are not working or have been severely altered to fit this could be an indication of foundation issues. Foundation issues can be varied and include grading and drainage problems, they are expensive to fix. If the house is not square or level or it feels like you are walking downhill when going through a room, the foundation must be fully checked out as it can be an indicator of bigger problems.
4) Poor maintenance to the property in general as shown in things like peeling paint, worn roofing and windows that don't work. Poor maintenance usually extends beyond the things you can see. If the owners are not fixing the visible things, they are probably not going to fix the things that you can't see.
When a home is upgraded, what are some hidden problems that buyers should look for?
Any upgrade to a property should include the major systems. And if they were not fixed then the house wasn't fully upgraded. Too often the buyer is impressed by how pretty it looks and doesn't realize that if the basic components of the house are not changed; they are buying the same old house with new paint on it. Hidden problems include old rusty piping in the walls, deteriorated underground sewer lines, damaged chimney structures, roofing at the end of its useful life, worn out heating systems, older cloth covered wiring in the electrical system and older foundation systems that do not meet today's seismic (earthquake) standards. The buyer should have professional inspectors assess the true condition of each of the critical systems. Another factor with recently upgraded homes is that the systems may not have been in use so were not tested in real life conditions. Many times when subjected to actual living conditions, problems show up that were not evident before.
When a house is a fixer, what should a buyer beware of?
Anyone buying a fixer needs to understand the magnitude of the repairs that will be needed to bring the property to a new standard. Even experienced contractors can underestimate what it is going to take to fully upgrade a house. It is common to uncover hidden problems and unforeseen costs during the course of a "fixer" upgrade. Such things as the cost to comply with new code upgrades and various job delays add to construction and carrying costs and eat into the profit margin. Sometimes a fixer can seem like such a good deal but keep in mind that all of the costs need to be figured in and then a contingency added on at the top. If you are tight on money, this may not be the property for you.
What are 3-5 good tips you can give a buyer?
1) Team up with a good real estate agent. They should be looking for the right house for you, not just trying to sell a house.
2) Do a full inspection of the property. Include inspections of the sewer line and the chimney. These are hidden from view and can be expensive to fix. Any money spent on inspections will save you from unforeseen expenses later on - don't skimp on them.
3) Go to the property you are looking at buying more than once. Go to see it at various times of day, at night or in the morning or even on weekends. Walk around the area a little when you go there. This may help you find out if there are neighbor issues (such as loud music at night) and give you different perspectives on the property.
What are the biggest mistakes most buyers make?
1) The first mistake is buying with their heart and not their head. It's easy to fall in love with the million-dollar view but they should also be falling in love with their major systems.
2) The next mistake is not getting sufficient inspections or hiring a discount inspector that is not a qualified professional. You should hire the best you can get to tell you about the property and you should check out all of the components of the home, including things like mold and other potential hazards, before buying. Saving a few hundred dollars on inspections may cost you thousands in repair costs later on. Real estate is a huge investment and should be treated as such.
When buying an older home (say anything over 20 years), what should a buyer know?
No home is perfect. There are going to be flaws and little issues. Don't let them detract from your enjoyment of the house. And realize that older homes may take a little more maintenance as things will wear out. Budget for these and maintain your house. It will make it easier for you to sell when you are ready to move.
Written by John A. LaRocca; John is a member of the California Real Estate Inspection Association (CREIA) and a licensed general contractor. For questions contact John at (818) 951-1795 or www.LaRoccaInspect.com.