What's Up Homebuyer — Sample Chapter

What’s up Homebuyer consists of 11 chapters, appendices a, b, and c and a bonus section that is created to guide the serious homebuyer toward a more successful home purchase.

Contents

Foreword    7

Introduction   17

A Word About Home Buying in a Transitioning Economy    19

Chapter 1 Home Buying Basics   24

Chapter 2 Ownership Types & Deeds    40

Chapter 3 Loan Shopping    54

Chapter 4 Negotiating Your Home Purchase    80

Chapter 5 How to Select a Real Estate Agent/Brokerage Types    88

Chapter 6 Environmental Concerns    105

Chapter 7 Effective Home Inspection    116

Chapter 8 Hot Home Buying Topics (new homebuyer and home seller responsibilities, ibuyers, corporations and how to compete against them, AI and fraud, homebuyer ratios and the difficulty of homebuying in the current economy, homebuyer options of interest, down-payment assistance and other topics of concern, investors and their knowledge of RE, AVM and escrow removal and more) 123

Chapter 9 Internalizing the Complete Home Buying Process   153

Chapter 10 Tying it All Together and Using Your New Home Buying Mindset that you NOW Have and Must Use to Purchase Your Home Successfully in Any Economic Environment    159

Chapter 11 Home Duties After Purchase (selling your home and moving up, purchasing with the end in mind, 250k/500k exclusion of gain, rental, capital gains/ordinary income, loss, refinance etcetera)    189

Appendix A 

Additional books written by Thomas (TJ) Underwood     208

Appendix B

The 3 Step Structured Approach (A Comprehensive Financial Management System Designed to Inspire Action and Save You Time so that You Can Purchase Successfully and Truly Build Wealth in Any Economy) 210

Appendix C

Credit, Finance, and Home Buying Resources    228

BONUS SECTION: Common Mistakes You Need to Avoid    243

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When it comes to your next home purchase you want to hold yourself accountable by demanding more of yourself prior to your home purchase. 

What’s Up Homebuyer was created to put you in the right frame of mind prior to your home purchase by providing you with the most pressing home buyer knowledge that you need so that you can truly succeed!

That means determining what you can truly afford, having a strong money management personality, knowing how to effectively manage your finances throughout your lifetime, and knowing the home buying process in advance of your home purchase, as that knowledge must penetrate your mind and heart proactively if you are one who sincerely desire to make your home purchase and home ownership period a more joyous experience.

Read Chapter 7 below, so that you can get a feel for being in the know, as you pursue results that will show…

Chapter 7 Effective Home Inspection

Learn why an Effective Home Inspector can be invaluable when you are in the process of buying your home…

You want to know prior to your home purchase how to evaluate a home inspector from a professional and not personal perspective!

Professional Criteria of an Effective Home Inspector:

1. Technical Expertise

A qualified professional inspector that can benefit you the most must have detailed knowledge of residential construction, including all home systems and components, the experience and expertise to recognize defects and problem situations, and the ability to interpret and convey findings in a meaningful and understandable way.

It is also important that they stay current with the profession by actively continuing professional education through recognized seminars and related activities.

Be aware that if you are particularly concerned about a particular area of the home (for example HVAC) it may be beneficial to have the HVAC system checked by a qualified professional in that industry.

The same can be said for the electrical, plumbing (whether septic or public water system), roofing, foundation and pools etcetera, if you are particularly concerned or based on the evaluation and recommendation by the home inspector.

2. Thoroughness

Most qualified inspectors report on the general condition of the home’s electrical, heating and central air conditioning systems, interior plumbing, roof, invisible insulation, walls, ceilings, floors, windows, doors, foundation, basement and visible structure.

In Georgia, inspectors are particularly attuned to the need for crawl space and attic ventilation due to the significant heat and humidity in the southeast. They also pay particular attention to roofs which generally do not last as long as they might in northern climates. 

Orangeburg pipes on older homes built after World War 2 (1940s to 1960s) are not uncommon and may need to be replaced.

Agents and potential home buyers must remember that visual inspections are not designed for the purpose of criticizing every minor problem or defect in a home.  No home is perfect.

Rather, the inspection is intended to report to the buyer any major damage or serious problems that requires repair for the “wellbeing” of the house, and that might present a significant financial burden.

Your agent may need to include specific language in “special stipulations” or amendments as it relates to the result of the report as well as observations and notations of the agent.

Anything less than this full-scale inspection increases the chances of unwanted surprises and possible legal entanglements following the purchase.

3. Teaching Ability

The primary purpose of the inspection is one of educating buyers to enable them to make an informed purchasing decision.  The inspector therefore should allow—and even encourage—the buyer to attend the home inspection.

A good home inspector knows how the home’s many systems and components work together and how to minimize the damaging effects of sun, water, and the passage of time.

Attending the inspection provides an important opportunity for buyers to learn first-hand how their prospective new home works, and about possible repair costs and maintenance routines.

This is valuable information which may increase the life span, and perhaps the future selling price of the home.

4. Communication

A critical aspect of the inspector’s job is the communication of his/her findings to the consumer in laymen’s terms.

The ability to inspect, detect, and communicate with the client may indicate an inspector who is more skilled than someone who merely lists problems.

5. Most Importantly Do You Feel Comfortable and Confident Using Them?

Do you get a bad vibe upon meeting and/or talking with the inspector?

Can they convey to you that they have the technical expertise to evaluate all areas (thoroughness) of a house?

Can they communicate and effectively teach you about homes in general and the one you have under contract specifically?  If not, you might want to select another home inspector.

You want to make sure that the inspector is ASHI, GAHI, CABO, ICC, and FREA certified.

Conclusion or Key Points

A home inspection isn't just your opportunity to ensure that a home is fit for you and your family. 

By knowing what to look for in a home inspection report, it will help you understand any defects and use your new leverage to negotiate repairs that you want done prior to closing (must do so during due diligence period).

A home inspection allows you to assess what repairs should be made on the seller's dime, not yours before closing and moving day arrives.

Use these home inspection tips to prepare for the inspection:

Do vet more than one home inspector!

It's in your best interest to choose a home inspector using due care.  Your real estate agent may recommend an inspector, or the seller might offer to show you a report from a home inspection they've had done.  To avoid any conflict of interest and to get the most objective information on the home's condition, you'll want an independent home inspector. 

And because things move quickly after an offer is accepted, you may even want to research inspectors while, or preferably before house hunting!

Certain professional organizations can be a shortcut to finding a qualified home inspector.  And realize that not all states require home inspectors to hold licenses. 

For example, the American Society of Home Inspectors requires members to perform more than 250 inspections and pass the National Home Inspector Examination to be eligible for membership.

Do get a home inspection for new construction!

Even if you're buying new construction, a home inspection should still be on your to-do list.  A home inspector may evaluate a home differently than a county or municipal inspector, whose job is to determine whether new construction complies with building codes.

At a bare minimum, a home inspector is a new set of eyes double-checking that there aren't any loose ends (or unconnected ducts) or wiring issues.

Many new homes have been determined to have been poorly built and have caused major headaches for the purchaser because they didn’t get an inspection—even with a newly built home.  Don’t let that be you if you are one who has the intention of purchasing a new construction home!

Do be there for the home inspection!

It’s recommended that buyers be present during the home inspection. Following the inspector from room to room will allow you to ask questions as they inspect. 

That will also help you better understand the inspection report.  The report can feel pretty intense and overwhelming, especially if you're a first-time home buyer and have never gone through the home buying process.

Keep in mind that your home inspector does not have a crystal ball and the inspection may be limited in scope.  If you have other concerns outside of the home inspectors’ scope—you may need to hire another inspector for that specific concern, depending on how big a concern it is for you.

You can ask any questions that spring to mind, but your home inspector may not be willing or able to provide answers about things outside the scope of contract requirements.

Don't get in the home inspector’s way!

While you're encouraged to tag along and ask questions, don't impede the home inspector and don’t go to other parts of the house. 

For example, if they're checking the bathroom water pressure and you start running a faucet somewhere else in the house, it could affect the results of the water pressure test.

Don't be afraid to negotiate with the seller after the inspection is complete!

You shouldn't expect the seller to take care of every item in an inspection report, and you may want to avoid the small stuff. 

A thorough home inspection can easily list dozens of separate defects, but you may want to negotiate the cost of major repairs that were not included in the seller's disclosure (a disclosure that seller provides that outline details of the house).

To keep from handing over a too-lengthy list, skip anything that could be considered normal wear and tear or cosmetic.  And if you already have plans to renovate, it's not worth haggling over minor repairs.

However, if larger issues do pop up, you can ask the seller to fix them before you close on your home.

Major issues of concern include:

• Structural problems such as foundation, roof, major framing issues
• Roof leaks/damage or anything that compromises protection
• Plumbing problems and leaks, sewer/septic issues, broken water heater
• Electrical hazards such as unsafe wiring, panels, and outlets
• HVAC failures such as heating or cooling systems not working properly
• Water damage/drainage, basement leaks, flooding, poor grading
• Chimney/fireplace hazards, cracks, unsafe flues
• Pests/environmental hazards, termites, lead, mold, radon, asbestos
• Safety/code issues such as missing detectors, unsafe stairs/railings.

You may want to request re-inspection before closing or ask to see proof (think receipts) that licenses were obtained and professionals did the work.

Alternatively, you can “request a credit” from the seller or negotiate a reduced sales price. 

Though finding someone to make the repairs after you move in is more work for you, it may be the better arrangement, as you won't hold up the sale and you'll get to hire any contractor(s) yourself.

Don't assume the home inspector can be held liable for the report or inspection!

A home inspector's chief concern is safety, but the home inspector generally has limited legal liability.  Some inspection contracts won't give you much assurance in case of undiscovered problems; your home inspector might offer a limited warranty.

The inspector's responsibilities are delineated in their contract, limiting their legal liability.  An arbitration clause, for example, would hamper your ability to file a lawsuit in case of disaster. 

Even if you were able to file a suit, there are sometimes additional clauses that limit how much you'd receive as compensation.  For instance—you might only recover the cost of the inspection or a limited dollar amount.

And again, ensure that the inspector you select are ASHI, GAHI, CABO, ICC, and FREA certified.

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