Home Buyer Guide Part 5

Home Buyer's Guide Part 5

The Inspection Process

When you make an offer on a home, your Purchase Contract will likely contain provisions allowing you various inspections of the property. The purpose of these inspections is to educate you as to the physical condition of the property you are purchasing and to provide valuable information to you as a Buyer. It is important to remember that your Purchase Contract may provide for withdrawal from the contract if these reports are unsatisfactory to you, but inspections should not be considered an open door to renegotiate the purchase price.

Structural, Pest Control Inspection:

Often referred to as a "Termite Report," the Structural Pest Control Inspection is conducted by a licensed inspector. In addition to actual damage, the Pest Report will indicate any type of wood destroying organisms that may be present, including Fungi (sometimes called "dry rot"), which generally results from excessive moisture.

Section I Conditions:

Most Pest Reports classify conditions as Section I or Section II items. Section I conditions are those which are "active," currently causing damage to the property. Generally, Section I items need to be corrected before a lender will make a loan on a home.

Section II Conditions:

Those that are not currently causing damage, but are likely to, if left unattended. A typical Section II item is a plumbing leak where the moisture has not yet caused fungus decay.

Who pays?

Your Purchase Contract will specify who is responsible for the cost of the inspection and making these corrections. This is a negotiable item and should be considered carefully. I will advise you as to what is customary and prudent.

Physical Inspection

The Physical Inspection clause in your Purchase Contract, when initialed by both parties, allows you the right to have property thoroughly inspected. This is usually done through a General Home Inspection. While Home Inspectors are not currently required to have a license, most are, or have been, General Contractors. The inspection and the resulting report provide an overall assessment of the present condition of the property.

What gets Inspected?

The Home Inspection covers items such as exterior siding, paint, flooring, appliances, water heater, furnace, electrical service, plumbing, and other visible features of the property. This is a general inspection and will often call for additional inspections by specific trades, such as roof and furnace inspections.

Further Inspections

If conditions warrant, the home inspector may recommend a Structural Engineer's Report. Such a report would identify structural failures and detail recommended corrections.

Who Pays?

Typically, the buyer pays this inspection.

Geological Inspection

You may also elect to have a Geological Inspection to educate yourselves as to the soil conditions at the home you are purchasing. This inspection is performed by a Geotechnical Engineer and involves not only physically inspecting the property, but also researching past geological activity in the area. The primary purpose of Geological Inspection is to determine the stability of the ground under and around the home.

Who Pays?

Typically the Buyer pays, but as with other inspections, this is negotiable according to contract.

Home Warranty

Home Protection Plans are available for purchase by both Buyers and Sellers. Such plans may provide additional protection of certain systems and appliances in your new home. I will provide you with brochures detailing companies and options.

Steve Mun, Silicon Valley Realtor
www.stevemun.com

It's official: we are in a buyer's market.

If you would have asked me a year ago, I would have told you it was not possible. Let me put in a caveat, however: the numbers do not represent all areas, only the county as a whole. Real estate is a micro climate business, so what is happening in your neighborhood does not necessarily reflect what is happening a few mile away in another town. Some areas are still hot and others are doing horribly.

What am I rambling about? It is called absorption rate: it measures the number of months it would take for the current inventory of properties to delete itself. According to NAR, a buyer’s market is represented by 6 months or more of unsold inventory.

Calculating the absorption rate, as I do every month tonight, I realized that we are at a monumental threshold: 5.83 months of supply as of today. This means if you were to put your house on the market today, you would be competing for buyers with 5.83 months of unsold supply of single family homes in Santa Clara County. We are technically in a balanced market and heading towards a buyer’s market at the current pace by next month. Now that’s food for thought for qualified buyers out there.

Steve Mun, Silicon Valley Realtor
www.stevemun.com

Home Buyer's Guide Part 4

Our Professional Relationship

Putting me to Work for You

If you see any home that interests you, ask me about it. Whether it is advertised by sign, in the newspaper, listed with another Realtor, or even seen at an Open House, or not even on the market – I am able to best represent you in the pursuit of that property.

If you have any questions about how I work, please ask. Our professional relationship is critical to the successful purchase of your home.

Skilled Service

A large part of my work is performed "behind the scenes;" previewing homes, researching comparable sales, gaining market knowledge, evaluating changing legislation, and maintaining my professional credentials. For every hour spent showing you homes, I have spent up to ten hours preparing. I am constantly acquiring information that will help me to better serve you.

How I am Compensated

I am not paid a substantial salary: I work on commission and I am compensated only when all of your needs have been satisfied and you take ownership of your new home. As the buyer’s agent, my commission will be paid by the seller at close of escrow.

Your Commitment to Me

I will invest substantial time and effort in locating your home, and will represent you with unequalled integrity throughout the purchase of that home. In return, I request your loyalty – a commitment that you will work with me, exclusively, in selecting and purchasing your home.

My Commitment to You

I am a full time professional Realtor, I am educated in the legal aspects of real estate practice and licensed by the State of California to provide real estate services. As a member of both the California and National Associations of Realtor, I abide by a strict Code of Ethics to provide you with the highest level of service. As an associate with Re/Max, I am part of one of strongest and elite networks of real estate professionals in the Bay Area and nationwide. I earn my living by serving the needs of homebuyers and sellers with integrity.

Steve Mun, Silicon Valley Realtor
www.stevemun.com

Home Buyer Guide Part 3

Here is a flow chart of the Home Buying Process as discussed previously.