Homebuyers' inspection list
In a nutshell, here are the top 10 things that should be on your homebuyer inspection checklist:
1. Roof condition: Check for any signs of damage, leaks, or missing shingles.
2. Electrical system: Test all outlets and switches, and check for any exposed wiring.
3. Plumbing system: Inspect all pipes and fixtures for any signs of damage or leaks.
4. HVAC system: Test all air conditioning and heating units for proper operation.
5. Foundation: Look for any signs of cracking or shifting that could indicate structural damage.
6. Windows and doors: Check for proper operation and any signs of damage.
7. Exterior walls: Check for any signs of water damage or other structural issues.
8. Interior walls: Check for any signs of water damage, mold, or other structural issues.
9. Floors: Check for any signs of damage or unevenness.
10. Attic/Crawlspace: Check for any signs of water damage, mold, or other structural issues.
Want a one page print out, with check boxes and all? Click here: HOME INSPECTION CHECKLIST
Otherwise, read on for more details on what you/your home inspector is looking for and why.
Look for issues
Buying a new home is one of the most exciting events in your life. It's also probably the biggest financial commitment you'll ever make. The home inspection checklist is a must for all buyers. Some people skip this step to save time or money. However, it'll benefit you in the long run to stop problems from the outset rather than pay for repairs down the road.
Plumbing & HVAC
Plumbing and HVAC systems are critical to your home and to your comfort. Well-built plumbing components and a high functioning heating and air conditioning system will keep you and your family members happy for years to come. As your home inspector begins the process, you can ask permission to stand by as they conduct the inspection. They'll be keeping an eye out for leaky, rusted, or broken pipes. They should also go into every room in the house and stand near the vents. Do you feel steady airflow? If you don't, there's a problem somewhere in the vents or with the heating or cooling (HVAC) unit. It's important to pay attention to unusual smells such as gas. A home inspector will also test the water temp and pressure- the temperature should not exceed 125 degrees Fahrenheit.
Watch the foundation
Your mind will be at ease if you know the foundation is strong and sure. The home inspection checklist is not complete until the foundation has been investigated. The inspector should examine it for cracks or any shifting at the base of the walls and ceiling. Look for standing water or other moisture under the home (if it's a single family house or townhome on a raised foundation). The drainage system should also carry water properly away from the home.
Check the roof
A good roof should last at least 20 years, and some do their jobs for up to 50. Still, don't neglect this part of the home inspection checklist. The home inspector will examine the roof for evidence of missing shingles, leaks or weak spots. Large areas of patching will also be a red flag, and can be discussed further to assess whether repair(s) or a full replacement is recomended.
Eye the electrical
The inspector should spend some time looking at the wiring in the house. The circuit box should also be in good condition and be able to handle sufficient electrical loads. You must not see any exposed wires or splices.
Keep in mind that these are "typical" areas of focus for most residential home inspectors. Special properties, such as condos, or homes that are built on land requiring a well for water and a septic system for waste removal, can require specialty inspections. It's important to work with a Realtor who has great connections with a variety of inspectors to keep you ... and the largest purchase of your life ... safe.
First of all, it goes without saying that no one has a crystal ball nor the ability to truly predict what's going to happen within the Silicon Valley real estate market in 2023 – BUT – we're always looking at data and metrics and other indicators .. from the federal government .. to local trends, to get a sense of what the market might do. With that in mind, here are a few pros and cons of buying a condo/townhouse/single family house this year:
Why 2023 is a GOOD time to buy a home
By now, the economy has mostly recovered from the economic downturn caused by the COVID-19 pandemic, and though there will be lingering effects of the disruption, buying, selling, and open houses are back to normal.
In 2023, the wildcard will be interest rates. As many people shopping for homes know, interest rates shot up in 2022 from 2.5/3 percent to the 6/7 percent range. It looks like we've seen the top and already this year rates have started to decline, so jumping into the buyer pool now means you may be able to snag a home with less competition while other buyers hang out on the sidelines waiting for interest rates to go down further. Yes, your monthly mortgage will go up due to interest rates being higher than the historical lows we saw the past few years, but it's incredibly unlikely we'll see those rates again anytime soon (barring an economic crash); and if/when interest rates do go down, you can always refinance to get a lower interest rate. In the long run, you end up spending about the same amount, because in the Silicon Valley real estate market, bidding wars cause buyers to spend more than they'd like in order to "win" against the competition. So, fewer buyers to compete against balances out higher interest rates. Furthermore, once the threat of recession goes away it's back to business as usual and you could be sitting comfortably in your own (albeit expensive) home while prices continue to rise.
Why 2023 is a BAD time to buy a home
Although Silicon Valley home sales from Nov, 2022 - Jan 2023 have dropped significantly, we don't expect things to stay that way for long. As much as I'd love to see a balanced market, the challenge our area continues to face is a lack of inventory. There's simply not enough (affordable) homes for sale. It is likely that home prices will be higher in 2023 than they were in 2021/22. Additionally, mortgage interest rates could be higher as well, which would lead to higher monthly payments. The main concerns regarding the purchase of a home in 2023 is simply the economy at large – the usually insulated Silicon Valley tech world has begun to see layoffs for the first time in a decade and the stock market has continued its roller coaster ride alongside inflation and whispers of the r-word ... recession. If your income source or overall life plan doesn't give you the confidence of at least 2 years of stability, then buying a home in 2023 may not be the right move for you.
What are the 2023 real estate predictions?
1. More buyer competition: As the economy continues to improve, more buyers will enter the market, driving up competition and prices.
2. Home prices will continue to rise: Low inventory, high demand, and rising costs of materials and labor will fuel further appreciation in home prices.
3. Interest rates will stabilize: The Federal Reserve is expected to keep interest rates lower than the highs of 2022, which will support home purchases.
4. Mortgage lending standards will remain tight: Banks and lenders will remain cautious and only lend to qualified borrowers.
5. More alternative financing options: With more people struggling to qualify for traditional loans, alternative financing options such as rent-to-own and lease-to-own could become more popular in less demand metros.
6. More people will embrace remote working: The pandemic has ushered in a new era of remote working, allowing people to live and work anywhere. This will lead to a continuation of people moving to more affordable and rural areas.
7. More demand for green and energy-efficient homes: Demand for green and energy-efficient homes is expected to increase as people become more conscious of their carbon footprint.
8. More demand for income-producing rentals: A result of people looking for flexible living arrangements and income-generating opportunities.
The holiday season is one of the busiest and most joyous times of the year, so it's hard to imagine tacking on another "to-do" ... let alone a major one such as buying or selling a home. While it might not seem like a good time to take on such a monumental project -- there are benefits for both sides. Whether you're a buyer or a seller, check out the top 3 benefits of a holiday home sale.
IF YOU'RE A SELLER
1) Motivated Buyers
Who wants to spend their free time and holiday vacation touring homes? Serious buyers, that's who. While open house attendance and home tour requests might be lower than the (usually busy) Spring/Summer season, the number of truly motivated buyers will be higher — think quality over quantity. Anyone shopping for a new home between Thanksgiving and the New Year is likely to be a serious buyer — and your house may be exactly what they’re searching for! If you work with an agent to list your house this winter, you’ll be able to get in front of the buyers who are ready to purchase now, in the hopes of making a move before the year ends.
2) Less Competition
Homeowners are typically less likely to list their houses toward the end of the year — and understandably so. We're all busier around the holidays and the majority of people who are thinking of selling their home choose to wait until after the new year when their social calendars are less inundated. As a result, there won't be an endless supply of properties so there's more time for serious buyers to focus on your home. Added bonus: the limited number of available homes means you may be able to command a higher asking price for your property.
3) More Time for Touring Homes
It’s not just less competition that’s in sellers’ favor during the holidays. As busy as the holidays can get, there's also an increased amount of free time as usual commitments are placed on hold and people tend to have more time off from work/school than at any other time of the year. This creates a pool of buyers who may be ready to see your home at a moment’s notice. What's more, most neighborhoods are delightfully decorated and there's an aura of holiday cheer, making buyers feel cozier in your home.
IF YOU'RE A BUYER
1) Less competition
With the market as hot as it’s been, buyers have been forced to act fast. If you're a seasoned buyer you may have felt defeated by the spring/summer bidding wars. Typically, the fervor of multiple buyers and over-list price offers slow down come winter, so the holidays could be your season to buy! In the Silicon Valley, home buying activity remains strong thanks to low inventory and (before the most recent rate hikes) low interest rates. That being said, home buying traffic tends to dip around the holidays, which means less competition and a chance your first offer will be accepted.
2) Potential for Negotiation
Fewer buyers per home reduces a seller's upper hand making it a more balanced negotiation process. Sellers may be more willing to negotiate price, contract terms, and closing date, especially if your offer is the only one around. Home prices tend to be lower around the holidays and then you couple that with threats of a recession and we're seeing sellers offer unprecedented buyer credits and interest rate buy-down options, making it more affordable than ever to be a home buyer.
3) End of Tear Tax Breaks
Yet another boon for buyers: end-of-year home purchases, even at the very end of the year, the chance to squeeze in an important tax write-off. Homeowners can deduct some of the closing costs associated with the purchase of a new home in addition to their mortgage interest on primary residences up to $750,000, along with combined deductions for up to $10,000 of local, state, and property taxes. Other homeowner-friendly deductions, like moving expenses in some states, may also apply.