So, they Buyer has accepted your offer/Counter offer, you've signed back, and you think its a done deal.
It's not a done deal.
The Financing shouldn't be a problem, you've been pre-approved. Talk to your "mortgage guy/girl" and send him the offer paperwork. Your lawyer will need this too. (more on the lawyer soon, no worries)
Now is a good time to tell your Mortgage guy the details (send him a copy of the most recent offer), so he can get the ball rolling. Its also a good time to inform your lawyer. (more on this, as well as closing costs, on two posts from now.)
You now have your Conditions.
Not sure if you've ever watched Holmes Inspection (with Mike Holmes)... but Honest to God, It's like you're Sherlock Holmes and Watson going through someones home for clues. Its a little bit creepy, but your curiosity gets the better of you as you snoop through someone elses home.
We used Nook n' Cranny Home inspections (twice!) And Darren was Amazing, and I honestly can't put in words how much grief he saved us! If you're in the Hamilton grimsby/Burlington (maybe even oakville) area, He's the man to call.
We "bought" that house after 5 offers/counteroffers just to have the building inspector find a bunch of glaring issues with it that caused us to invoke our inspection condition/clause and walk away. Our Realtor didn't see the issues as a big deal, But It was a tough decision that left Megan Crying, She and I arguing, and me feeling like I had stepped on and killed a 4 year olds' 12 week old puppy. Ultimately, You have to realize that A Steady, Monthly Mortgage payment is one thing, but $10,000 dollars to fix a leaking, moldy basement is another.
Ultimately, I knew Megan was just invested emotionally to getting a house. There would be others, and she would see this (and she did) I "pulled rank" on Megan and walked away from a VERY expensive potential mistake. (She did eventually forgive me... I think.)
(By "pull rank" I pulled the "But I'm the one who's going to have to fix all this, and we're going to have to delay our wedding to afford to fix all this")
Other than the issues with the house, another thing our inspector did was look at the listing vs. what was actually at the house, to ensure it was accurate. It said Vinyl Roof on the listing - Nope. It had a nearly worn out Shingle roof. No idea where vinyl came from. (vinyl roofs generally are down south, but are not great for cold climates - they get brittle) There was a bathroom fan, at chest height, In the wall of shower!!! (electrical hazard much?) it also said all new windows. Maybe 50% of them were "newer".
And the Mud icing to the cake: A dirt Crawlspace, which was mud, covered in a tarp held down with bricks. As an asthmatic, This was the last straw. There was also horrible wiring (main fuse was 15 feet away from the fuse panel... Fuse panel rated for 125 amps, Main fuse rated for 100 amps, and also it was broken with no cutoff switch... just exposed, 100 amp wires asking for someone to kill themselves on...
So really... Just a lot of money to be spent that we didn't have.
Now, Look at the issues he found, vs what we saw in the house:
The house was cute, showed well and looked updated. it had potlights, new carpets, nice hardwood floors, a new fireplace, nice gardens and a beautiful backyard.
The Inspector's job is to look past the pretty clothes, and look at body of the house. When I put it that way, it sounds like a glamours job... But its not. Lots of crawling around in attics, Dank Basements, Hot roofs, electrical hazards. Darren was kind of like the Steve Erwin (Crocodile hunter) of House inspections, Finding all this dangerous and costly stuff you wouldn't have ever dreamed of catching.
He did this VERY well, and what Megan and I couldn't see, He did. He showed me everything I NEEDED to see, even if I really didn't want to. I sat down with him and I told him the price, and I asked his honest recommendation as to if this house was worth it. He said walk, so I did.
Listen to your inspector. They are the only person who are 100% on your side and can always be trusted. You pay them ($350-$450) regardless if you get the house or not, so they have NO ulterior motives to cover anything up. (and for that reason, I'd recommend find your own inspector (or use Darren), rather than one the seller (or even your Realtor) recommends)
Its pretty much mandatory to go with your inspector when he does this. Its not very often you have a super knowledgeable person to go through your house and show you how it works. He'll show you your Furnace How it works, A/C, things that you should look at replacing fairly soon. Safety items, etc. He'll give you a Report at the end of it all, Prioritizing various issues. The big one for us on the house we bought was the electrical panel and retaining wall. After some research, we saw that the panel was 800 bucks to replace, and the retaining wall was owned by the people behind us, so if anything ever happened regarding it, it would be a pain int he ass, but we wouldn't be liable, they would (its a case of "we were here first!")
BEST 350-400 dollars you will ever spend. Trust me.
If a seller refuses your Inspection clause, Walk away. They're hiding something.
So, if your inspector found a few small issues, but you still want the house... You have two options:
Continue the Tango (Counter offer), or just buy the house as it is.
If you decide to counter offer (again!) Know that the seller can then at that point take in other offers. You are Killing off your current offer on a condition, so your agreement to buy the house is now void. Get the details from your Realtor and find out if they have any other people interested in the house. If nobody is in line, you are "more safe" you can use your inspection clause and make a counter offer, but there's always the chance someone could slip in, resulting in someone else now owning "your" house.
With our current house, the inspector discovered the rear side of the roof is fairly worn. The front looks perfect. It'll have to be replaced in the next few years. Between that and the bad electrical panel we invoked our inspection condition and pulled our offer to knock $5000 dollars off the asking price. They countered with $2500, and we accepted. Its not the cost of a new roof, but every bit helps. We didn't want to push our luck, because we knew we were the first ones in line, and other people wanted to buy "our" house.
The knowledge that the current owners needed to move ASAP allowed us to haggle a bit more. If we Pushed our luck too much, The sellers could have shut the door on us and gone with the next offer in line, since we technically invoked our Inspection clause to try and haggle more for the cost of replacing the roof and electrical panel. We gambled, and won.
Bottom line: Get a house inspection. Really, you're spending a quarter million dollars. 400 bucks for an inspection is NOTHING compared to the world of hurt you could be in if you miss something critical.
Next post: Houses to "walk away" from.
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