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Wednesday, September 22, 2010
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30 comments:
So we're going to see a house today with a Redfin tour agent. We saw it at the open house a couple months ago and a recent price drop has us thinking we'll probably make an offer. Any guidance on what types of things to look for or ask our agent about during the tour?
Jeremy-
My guess is that the agent likely will not be that useful. I toured with a few redfin agents and although nice they did not know that much about housing and what houses were worth.
Yeah, we don't expect any input on price from the agent. Mainly I was just looking for last minute advice on things to specifically look for (like touch the basement walls to look for moisture). We've already got an offer price in mind, and our max price.
this $499K N Arl REO charmer posted here before is now UC - the same house that forced me to declare N Arl is toast....
I don't know for sure, but suspect that Redfin uses more junior people for tours. When I called to schedule a tour a few weeks back, the guy they scheduled was not one of their listed agents for the area. Am guessing you only get one of those folks if you put a contract in thru them.
I wound up not doing the tour so can't say more about that agent's skills.
Jeremy, I gotta say the benefit of a conventional agent (in my case) has been working with a guy who has been in the business for decades and actively looks for signs of the sellers covering up problems. He tells us we can figure out what we like about it, and he'll tell us anything (he sees) that can cause us headaches. It's saved us from a number of painful mistakes. From what I've heard, though, we have an abnormal agent who is trying to get us into a good home or no home, not just make a sale.
You might know all the stuff below, but here's what I've learned through the process I've been through. Depending on the house, some things to look for would be cracks running through blocks (cement or brick) instead of step-wise down them, as that indicates a more serious environmental problem than simply settling. Use your nose - if the house smells moldy that could be a problem, but if it smells really good (not just neutral) they could be covering something up. Note a very cold basement - that might be to chill mold out and isn't a good sign. Check copper pipe (if the home has copper pipe) to look for corrosion. If the home is older and has a basement, ensure there is a sump pump present or be willing to take the hit to install one yourself. Look for both cracking in the ceiling and also for popcorn ceilings (the bumpy ones) that can cover up a multitude of sins. Cracks aren't problems if they've been addressed, only if they haven't. Note if the windows are newer or older - windows are expensive to update and you want to know what kind of hassle you are taking on there. Make sure floors are level and look for any problems with trim around the floors (if it's detaching, you want to know why). I've run into people who've had serious foundation issues in homes they've purchased that they should have noticed as they felt themselves tilting while walking around! If there's an attic, look outside to see that it is vented properly.
As I said, there's a likelihood you knew some or all of that, but hope it helps. All the best on your offer.
Obviously, you know what you are doing and you will include a home inspection contingency in any contract. Also, have radon testing and look for any dead trees on the property.
housebuyer said...
I toured with a few redfin agents and although nice they did not know that much about housing and what houses were worth.
Sounds like agents in general. Pretty useless and overpaid.
Ace,
Any scoop on this Arl Ridge land that is being foreclosed on?
Katie,
In my experience our conventional agent from last spring was a salesman and nothing more. Robert is right that the home inspection contingency should catch any real problems - but it would be really nice if we caught them even earlier in case they were big enough to affect our decision to make an offer at all.
I don't know how good an agent would have to be to make up for the 1.5% you get back from Redfin, but I doubt many actually are that good. I don't think conventional agents are any better at pulling comps than the Redfin agents, or than I am for that matter since all the data is online these days. The days of realtors as gatekeepers to MLS data are long gone.
Jeremy, Katie, et al.
just thought i'd chime in here with one very quick point - i once worked with an agent who's also a longtime builder in Arl/FC whose solid reno/new build work i've seen in person, so was very resourceful & knowledgeable when we looked at REO & older houses, however, no matter how good/bad he was, in the end it all comes down to this - he's paid by the seller and working on a commission of the sale.
MM, it's a really run down house. I suspect that a builder (Troutman) who has been doing a lot of houses in 22202 may have a contract on the property, or someone who is buying it will hire him to tear down the house and build their dream home on it.
Jeremy, in general I would run far, far away from a conventional agent. All but my agent and one guy I've talked to at an open house have given me the creeps. What I trust my agent to do is tell me what's wrong with a house (and that's just this guy) as much as he can without being an inspector and also have mad negotiating skills. I know about the latter from the 5 or 6 recommendations from close friends for him. I'm pretty sure he's an anomaly.
I haven't worked with a redfin agent, so I can't speak to the negotiating skills over there. If they're good, might be worth it. From what I've seen at open houses hosted by redfin - not impressed.
Hope it goes well! Don't forget to scope out the neighbors for annoying barking dogs or other possible irritants.
Also, if you are planning on little kids soon---it is really, really nice to have eat-in kitchen space and a small room or little corner of the main living space for a toy/play area. We don't have the eat-in space now and it is really, really a drag.
eta-and its a good idea to go around rush hours/commuting times to get a feel for how the traffic is in and out of the neighborhood and if you are on a busy street. You may already know this from visiting before. :)
Jeremy, I second Robert's advice on making the contract subject to a home inspection. However try to find one on your own who is not affiliated with either your or the listing agent (lessen the temptation for them to fudge the results to keep getting work).
Also, FWIW I wouldnt necessarily say that any defect you find should prevent you from making a bid. In my house, we noticed some strange brick archway in the basement/crawlspace that appeared to be supporting the first floor. This structure was in horrible shape, crumbling away in fact. I figured the home almost certainly wouldnt pass inspection, but I bid anyway (thinking I could use the thing as leverage).
Well it turns out, the place did pass. Neither the inspector (nor anyone I have spoken to since) has been able to tell me what the crumbling structure was (probably built in the early 1800s), but despite its appearance it was not actually supporting the floor at all. It was also not tied into the adjacent wall either, so despite its appearance, it is an essentially free standing structure providing no support whatsoever. As such, the fact that it was crumbling was a complete non issue.
Long story short, what seemed like an obvious flaw was actually a complete red herring. If anything, it helped keep competing bids to a minimum (I bought in 2001). So if the place is otherwise "right" I would not let a potential flaw keep you from making a bid.
Good luck either way.
I decided to look at the inventory graph for the first time in a week or two and was surprised inventory
After 3 months of basically being flat inventory has started to increase pretty quickly in September. I thought this was the time of year that inventory normally starts to decrease, because people delist after the summer. Perhaps I am looking at the uptick to closely and this is just noise and inventory will start falling soon. If it doesn't MOI will likely increase significantly due to the lack of buyers.
For those interested, we visited the house and tried to inspect it more closely than a couple months ago at the open house. It seemed to us like much of the home maintenance and updates was "do-it-yourself" type work. For example the cable run to each room was run outside the house with a hole drilled in the wall and cable through the hole - no wall plate for the cable jack. The paint and wallpaper were all DIY with lots of painted over blue painters tape still on the walls. Several windows were missing screens, and a couple of light fixtures in the basement had the power wires run behind a wall and then came out a hole to plug into an outlet (I know this doesn't pass code).
We will still make an offer, but want to make sure we get a good home inspector and will ask for many things to be rectified. Supposedly many of the major updates have been done since 2005 (roof, HVAC, sump pump, siding, deck, gutters) - we'll see what the inspector says if we get an accepted offer.
Thanks for the tips and will keep everyone updated.
Good Luck Jeremy. Most of the stuff you listed was cosmetic and minor. Do get a home inspection and ask for the warrenties on the upgrades. Just a word of caution since you have been shopping for awhile, don't assume you are the only interested party since the price dropped. Make your offer as simple and clean as possible meaning don't nickle and dime them with minor stuff espically if the house is vacant.
Any advice on earnest deposit money - 1%, 2%, more? And who usually pays for the septic inspection? I know we pay for the home inspection.
We won't nickel and dime over any of the little things I mentioned before. I think I can easily fix those myself and do a much better job. I would like them to fix a broken window and a few spots on the wood floor where they had plants that now have water damage or rot/mold. Also anything the inspector says won't pass code.
The house is vacant, well except for all the stink bugs. Why do you say "especially if it is vacant?" Just because it is a pain for them to go back and fix things if they don't live there anymore?
Jeremy..yep you are on the right track..windows and screens..they should fix..water/well.septic the seller pays for but your contract needs to have these conditions written in. Vacant could mean they are out of state. The water spots now this gets kinda hairy. How do you propose they fix them? Refinishing the floors? They might techically sand and reglase and it really doesn't match the finish but its fixed. I don't know how bad or how deep they are, rot sounds serious where you have to replace the wood you definitely will need to refinish and restain. Oh yeah..termites..don't forget that and they pay for it, another contigency. With water damage/wood..termites love wet wood. Your home inspector should be aware of your concerns here. Deposit..as a recent seller..it didn't much matter to me what the deposit was, $1,000, $1,500..I had one 10,000 so just give a deposit as small as possible and shows serious intent.
Thank you Arkey. The Redfin agent is calling tomorrow to finalize the offer details and your posts have been very helpful.
Jeremy I am not sure the age of the house you want but some things might not have to be up to current code. I had home inspections on 3 houses we sold recently that were built in the 1960s and 1970s. One of the inspectors who was not very good said all the electrical outlets had to be changed to meet current code requirements. (I say he was not very good, because he could not correctly identify the Amps in the panel box even with a label containing the information. He also insisted we had an electric heat pump and electric dryer and there was a gas pipe going directly to the furnace and the dryer.) If you use the contract most realtors use in Northern Virginia, this is not the case. Unless a kitchen or bathroom has been renovated, these changes do not have to be made. The requirement is that the item be in normal working order for the code requirements when it was built. After the home inspection, divide the items you want repaired into the walk-through items which the seller has contractually agreed to repair and the home inspection items. The seller has to make the walk-through repairs at least. Your agent can explain the difference but basically walk-through items are mechanical (heating, air conditioning, hot water heater, appliances) and home inspection items relate to the structure (roof, floors, gutters, downspouts). Also if anything was added to the house like a porch, fence or deck, ask the owners for the building permits. Good luck.
Arkey,
wow I never knew a $1K deposit would be OK for a seller. first house we bought we put down $15K for a $300K sale, second and third contracts we put down $25K for houses in the $600K range.
after we walked away from the last contract i was really worried that i wouldn't get my full deposit back...
reecon,
The house was built in 1984. I guess we will want safety code problems fixed, like the regular light plug run inside a wall I mentioned before. The inspector will have to tell us what to reasonably expect them to do I guess.
Arkey and MM,
We only put 8k earnest deposit, but I told our agent that we could do more if that was a concern. Also, she found out from the listing agent that there are no other offers so maybe its not an issue right now.
Thanks again everyone for the help. I thought I had done a lot of research reading this blog for the past year, but I guess I didn't pay enough attention to the conversations when people actually bought vs. the ones where we all argued about prices.
MM..I've bought a few in various states..4 in Va., Ks, La. and my last place here in Ar. and have never offered more than 3,000 deposit. It goes into an escrow account managed by the real estate broker. If the seller wants more they will ask..belive me..but they generally only do that after you have seriuos negoiating. I have actually lost a house to a court battle..we were at closing when we were sued..we were the buyers and occupying the home and lost. Ask around among real estate lawyers..earnest money is seldom lost or kept by the seller..to many contigencies almost makes it a non-issue to a seller.
UPDATE: It looks like we will not be able to come to terms with the seller on the house we were looking at. They don't want to come down in price at all and are trying to offer seller financing to get the price they want. We will pass. Our offer was higher than all the comps our agent could find, and 113% of tax assessment when all houses in the neighborhood sold in the last year averaged 106% tax assessment according to frankly. This one did not have an updated kitchen or finishes, just a new-ish fridge and ovens.
We are happy to rent and save, and I'd be lying if I said I won't smile every month when that house is still sitting on the market this fall.
Jeremey..excellent..you should have confidence in yourself because you made a solid decision. Owner fiancing..whoa..big red flag that they know it will not appraise for what they want. For an older non-updated home, you made a good offer. They are a-holes in my opinion.
Jeremy, it sounds like you made a perfect, rational decision. I only hope if we end up making a lower offer (like we're planning) and the seller comes back with similar terms that we'll be as strong. Good work.
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