The process of buying a home involves a lot of people coming together to complete all the different requirements, often with deadlines. While the process can be stressful you can prevent about 75% of it by preparing appropriately and following the process completely. The majority of issues arise when there is a crucial missing "player" so it's important to find the right real estate agent, lender, title officer or attorney, inspector, or insurance agent.
The Agreement of Sale in Pa
The most important and binding part of the transaction is the agreement of sale. This is the legal document that describes the terms and time frames of the sale of the home you are purchasing. This is a legally binding document when signed by all parties and typically comes with some "good faith" monies from the buyer. A good real estate agent can act like a conductor of an orchestra in coordinating all the different people to play their part at the right times to make the final piece come together in a beautiful song/settlement! Contact me now to discuss your upcoming home purchase!
In a typical transaction an agreement of sale is signed that contains the agreed upon rules and guidelines for the buyer to complete inspections. The agreement stipulates the amount of time the buyer has, the inspection contingency period, which has a standard of 10 days but can be whatever the buyer and seller agree to follow. During this period buyer may conduct an inspection of the following areas, as well as any additional inspections agreed upon by both seller and buyer, by a qualified inspector. Please note that during the contingency period you must complete inspections, obtain any inspection reports or results, and accept the property, terminate the agreement, or submit a written corrective proposal to seller.
Home/Property Inspections and Environmental Hazards Inspection
This is what we generally refer to as the "Whole Home Inspection" and covers all the major systems of the home (roof, windows, electric, plumbing, heating and cooling systems, asbestos, mold, etc). The amount of time of the inspection and the cost can depend on the size of the home. Generally speaking on an average home the inspection will take about 2-2.5 hours and cost around $300. This is typically due the day of the inspection or before and you should expect a full report with pictures within 24 hrs. It is highly recommended to attend all or some of the inspection as this enables you to talk directly to inspector while looking at the potential issues. I also recommend using this time in the house to take measurements and plan placement of furniture, etc.
This is more commonly referred to as the "Termite Inspection". This generally costs $50 and is completed by the inspector while completing the Whole Home Inspection. Some types of financing require a termite inspection so be sure to verify with your lender on this as well.
Deeds, Restrictions and Zoning
If you plan to use the home for a special use this is an important contingency. Make sure you check the local zoning or deed restrictions to make sure you are allowed to do what you intend to do BEFORE settling on a home. There's nothing like finding out that you can't put that fence up that you were planning to and that Fido will now be spending the day inside the house with you all day.
If the property has a well on it you can typically conduct 2 inspections. A water quality test will tell you if the water is contaminated in anyway and typically takes a little longer as the water needs to be sent to a lab. A water quantity test can be conducted at the inspection and determines if there is adequate water flow. Generally speaking if there is public water you do not need to conduct this inspection as the municipalities should send annual water reports.
This inspection determines the levels of radon in the basement. Radon is a natural, radioactive gas that is produced in the ground by normal decay of uranium and radium. You cannot smell or see it so if you plan to finish the basement or spend significant time it is worth getting this inspection. Any result under 4 picocuries/liter is considered acceptable by the U.S. Environmental Protection Agency. It costs about $1,000 to install and most systems are guaranteed for life.
If the sewer system of the house is on-lot (Holding tank, drain fields, etc) than this is an important inspection. This can also cost a significant amount of money, $300-$800, so think seriously about this. The seller is actually required, at seller's expense, to locate, provide access to, and empty the individual on-lot sewage disposal system. Inadequate and improperly working septic systems can cost $5,000 to $20,000 to repair or replace so don't let yourself be surprised because you wanted to save $500. Also, please note that if the home has been vacant for a few months or longer the septic inspection company may actually charge you more for the inspection.
Property and Flood Insurance
This inspection allows you to determine the cost of the home owners insurance and determine whether the home is in a flood plain. Flood insurance can be very high ($1,500-$3,000 annually) and doesn't go away. For the most part you can get insurance on any home but the cost may be preventative to some buyers in certain homes.
The boundaries for the property can often be unknown or incorrect when looking at mow lines or fences put up by the homeowner. Property boundaries are not surveyed as a part of the home sale process so if it's important for you to know exactly where the boundaries are you should have this contingency and order a survey. This can easily run you $800 for a standard home and lot.
Lead-Based Paint Hazards
This inspection is only relevant for homes built prior to 1978, when paint containing lead was widely used. The seller is required to disclose any knowledge of lead-based paint hazards and/or records and reports of the same. Older homes with pealing paint can be a more serious danger to infants and young kids who might be hanging on the window sill putting everything in their mouths, including the paint chips.
This subject on the agreement of sale and inspections is far more exhaustive than my explanation here and is one of the many reasons to work with competent real estate agent! Contact me to discuss this in greater depth.