Discovering problems before you buy

HOME WORK

April 03, 1993|By Karol V. Menzie and Randy Johnson

Question: What do Carole King, Rudolph the Red-Nosed Reindeer and prospective old-house owners have in common?

Answer: They all have to go up on the roof.

Well, maybe not all. Carole King can sing her way up to the roof, and everybody knows how Rudolph gets up there.

But the home buyer may have a little more trouble. We know people in the home improvement business who don't like getting up on roofs, so it may be impractical to expect every buyer to do so. But you can get someone to go up there for you to inspect the condition and make suggestions for treating any problems.

You may be expecting to get a home inspection as part of the purchase process. Banks require it, and there are good reasons for that.

But that process doesn't kick in until you've put in a contract on the house and it's been accepted. By that point, you've given the broker or the owner a deposit, and you've given the bank money to start the credit check and appraisal of the property. You're committed.

But suppose there's a serious problem? A major water problem in the basement, or an old tile roof that can't be repaired? A heating system that simply doesn't work, or old galvanized metal plumbing pipes that are virtually clogged?

Any of those problems could cost thousands of dollars to fix. If you add that cost to the cost of the house, it could just put it out of your range.

You may want to adjust the price you offer; at the least, you need to know how you'll pay for repairs. Banks generally have some limits on the loan-to-value ratio -- that is, they may not loan 100 percent of the value of the property. (Some government programs may be exceptions to this.) They may loan only 80 percent, or 90 percent. The price of the house plus the cost of the repair may be more than that limit. Where will the money come from?

To protect yourself from such a situation, you are going to have to do some work.

Study up a little, check out a few books, learn to identify the parts of a house. (You might be amazed at how many people offer a contract on a house without even knowing what kind of heat it has.) Be informed.

And be organized. As you shop for a house, list good points and potential problems so you can evaluate each house. If you know what you're looking at when you first go through the house, you'll be able to spot potential problems: water on the basement floor; poor water pressure in the second-floor bath; stains on a ceiling or in the attic that indicate leaks.

If you think there may be a problem, but aren't sure how big it is or how much it might cost to repair, you can do two things. Both could cost money -- but not as much as ignorance might cost.

First, you can get an expert to look at the problem, tell you whether it's major, minor or in between, suggest ways to repair it and offer estimates. If the water pressure is bad, you might have a plumber check out the water pipes. Replacing pipes in the basement may not be expensive, but ripping out walls and floors in upper areas could end up costing a small fortune.

Second, consider hiring an independent home inspector. The cost may be on top of the regular bank-mandated inspection, but if it turns up a major problem, it can save money in the long run -- and you'll be able to adjust your bid before you offer a contract. (If there is a bank involved already, ask if they'll accept this inspection. If the inspector or the firm is well-known, they might.)

Whether your home inspection occurs before you put in a bid or after your contract has been accepted, you can still do a lot to make sure the inspection suits your needs.

What distinguishes a good home inspection from a bad one? Simple. It's your participation.

You can't be busy that day. Don't let the inspection take place without you. It may seem so easy to turn the responsibility over to the real estate agent . . . but while the report you get back will be "complete," you'll miss a lot of information if you're not there asking questions. Remember that you, the buyer, are paying for the home inspection -- it's probably about $250 -- so get your money's worth. Check your notes, list your concerns. Prepare for the home inspection as you would for an exam -- only this time you get to ask the questions.

.` Next: Questions you might ask.

Mr. Johnson is construction manager for Neighborhood Housing Services of Baltimore. Ms. Menzie is a feature writer for The Sun.

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