For Sale by Owner: Pros and Pitfalls

You can save a lot of money by selling your home yourself

When deciding how to go about the process of selling their homes, homeowners should carefully consider the pros and cons of hiring a real estate agent. While most sellers opt to hire an agent to assist them with the sale, a minority of them choose to sell it themselves. In 2008, these "for sale by owner" (or FSBO) sellers totaled 18% according to the National Association of Realtors. FSBO sellers stand to save an enormous amount of money, but to do this well, they must be knowledgeable and shrewd in a territory which they may find unfamiliar.

In the U.S., real estate agents typically take 4 - 6% of the price of the home, which many homeowners view as unjustifiably large, considering the agent puts none of their own money into the home and comparatively little of their time. Yet, sellers must consider that this fee is usually split between the the buyer’s agent and seller’s agent, and the brokerage must be paid too. After taxes, the average real estate agent makes a humble living. Although, understandably, the seller doesn't care about how the commission is split up, as they'd much prefer to pocket the whole amount.

There are also psychological reasons why homeowners choose to sell their homes themselves. Some people enjoy the feeling of being in control of the transaction and unencumbered by the potential mistakes or ulterior motives of professionals. The agent might want to accept a low offer because they’re in a hurry to sell the home, get their commission and move on, even if the seller is in no rush and wants to proceed at their own pace. Moreover, the amount of the commission will be affected little by a change in the final sale price, leaving the agent with little incentive to negotiate over a few thousand dollars. (I do not believe this. These comments and theories are taken directly from sellers).

Of course, many sellers will gladly pay a real estate agent a commission, especially in buyers' markets, when the seller can’t garner sufficient attention to sell the house on their own. Also, the idea of a property transaction – perhaps the most important financial move of someone’s life – without a professional may be unsettling to both the buyer and the seller. Agents know what agreements need to be signed and which laws must be observed (such as disclosure requirements), saving a lot of hassle for the buyer and seller, and keeping them both out of court. A real estate agent will also act as a buffer between the buyer and seller, who might feel uncomfortable dealing with one another directly.

Perhaps the best reason to hire a real estate agent is that they know how to price a home, and, without their assistance, the seller may waste months trying unsuccessfully to sell an overpriced home, or, worse, sell the house for too little. When selling a home without an agent, owners will be responsible not only for paying the fees charged by various professionals, but they will also be responsible for finding these professionals in the first place. A competent real estate agent will know to not skimp on the home inspection, for instance, by exclusively hiring InterNACHI inspectors.

Sellers can save thousands of dollars by avoiding the services of a real estate agent, but to do this well, they are going to have to earn that money. The following tips are a good start for anyone looking to sell their home:

  • Don't skimp on house preparation. Your house will be in competition with houses listed by agents who coach their clients on how to prepare their house for showings.
  • Learn about legal requirements for disclosures in your area. If you do not disclose certain information to the buyer, they might be able attack you later in court.
  • Familiarize yourself with the paperwork and contracts required by a real estate transaction. It often pays to hire a lawyer to review the contract.
  • Research advertising and marketing tools available to you on the Internet. There are some sites that will even help you develop a video tour of your home.
  • Hone your negotiating skills and be prepared to turn down some offers. Real estate agents are expert negotiators, and the buyer’s agent might try to take advantage of your inexperience.
  • Hire an InterNACHI inspector to perform a Move In Certified inspection.

I work with many of the top real estate agents in Southwest Florida and I would NEVER think to sell my home on my own. I see the hard work, time and money they spend to get every listing sold as soon as possible. It is a tough job!  If you think, as I stated above, that your realtor is lazy and not doing much to help you...then move on!  Find another realtor and do it quickly! Just like you would interview a home inspector, you should also interview a realtor. Ask for referrals. Look up their reviews on Trulia and Zillow and see what their social media posts are about.

Selling your home on your own can save you money...but there is a reason that realtors are the experts. You wouldn't do a home inspection on your own so there is no need to try to sell your house on your own either.

Decks and Patios

Deck and Patio Considerations for Your Home Inspection
By HomeCity Real Estate

Having a deck, patio, or porch on your property can be a huge asset for both home buyers and sellers http://www.homecity.com/first-time-home-buying.

What could be better than spending a relaxing afternoon or evening on your own private outdoor spaceafter a long day?

Although traditional home inspections primarily focus on the HVAC, electrical, plumbing, and structural components of the house, outdoor spaces are definitely worthy of inspection too. Outdoor decks have a tendency to collapse over time, and patios become cracked and fragmented due to weathering. Even if you don’t plan to use these outdoor features every day, they can pose serious safety risks if not properly maintained and updated.

So as you prepare for your upcoming home inspection, keep these deck and patio considerations in mind.

Deck Inspection Tips

According to the International Association of Certified Home Inspectors, more than two million decks are built and replaced each year in North America alone, and of the 45 million decks that exist today, only 40 percent of them are completely safe.

Outdoor Decks are most commonly built using treated wood to avoid termite infestation and rot. All exposed areas of the deck must be visually inspected, including the deck supports, railings, and stairs.

For maximum stability, decks should be lag-bolted to your house, rather than simply secured with nails. Decks should also be supported with metal brackets attached to its ledger strip and header. Support posts shouldn’t come in direct contact with the soil, but rather sit upon a concrete footing and be treated for pests and rot as well.

Most deck-related injuries are related to use of the stairways and railings, so these items are of particular importance during a home inspection. Inspectors will look for light fixtures installed on and around the deck to detect any unsafe wiring configurations. A deck should never move or sway beneath you, and it should be just as stable as the main floor inside your actual house.

To recap, home inspectors look for these common issues when reporting on the condition of outdoor decks:

 Gate across the stairway
 Railings
 Handrails
 Deck rot
 Framing
 Support poles
 Insect infestations
 Lighting fixtures

Patio Inspection Tips

It’s important to remember that not all patios are created equal, and they can be built with everything from brick to stone and concrete. Concrete patios are especially problematic because this is a heavy material that settles unevenly and is prone to large cracks. Sections of concrete can become pushed up and cause residents and guests to trip and get injured. Patios that slope towards the house are also a problem because they make water flow to the foundation of the house, potentially causing foundation damage and basement flooding.

Many homeowners choose to put a covering over their patios to provide some shade and shelter during wind and rain. Patio covers require inspection as well to ensure that boards and brackets are aligned, secure, and in good condition. Patios are common places to put grills, porch swings, and picnic tables, providing a natural gathering place for entertaining guests. This type of safety hazard is especially dangerous because it has the potential to collapse on people sitting or standing under it at any time.

In summary, these are the main patio components that your home inspector should pay close attention

 Patio slope
 Elevation
 Cracks and damage
 Vegetation growth in patio holes
 Footing under steps
 Patio covering

Decks and patios are just the tip of the iceberg when you’re involved in a home sale with outdoor amenities. If the property has a swimming pool, tennis court, or water well, you may want to hire a specialist to go above and beyond the standard safety inspection report. Gazebos, sheds, and other backyard structures may require your attention and repair, and local laws often specify regulations about the usage of outdoor spaces and construction.

Outdoor recreation space is an often-overlooked feature of a property; however, these additions can be big selling points for buyers. They boost the curb appeal of your home and help you make a good sale without spending a ton of money in upgrades. When showing your property, make sure that decks, patios, and other outdoor spaces are well-maintained, attractive, and enticing to prospective buyers.

Electrical Service Panels

Electricity and electrical panels can be very dangerous and intimidating if you do not know what you are looking at. We have been trained through InterNACHI on all aspects of electricity and we use a local company, A/C Electric, for more in-depth inspections or repairs. Electrical panels are boxes that house circuit breakers, which are the safety devices that stop the electrical current if it exceeds the safe level for some portion of the home electrical system.

An unfortunate snake entered this serice panel and was electrocuted. The resulting mess may make the components defective.

Safety

Many people, even experienced electricians, have been killed or seriously injured while opening electrical panels. In 1991, an Atlanta electrician was killed while attempting to inspect a panel that had a faulty spring-loaded bus-bar assembly. Apparently, the bus-bar was moved while the electrician was opening the panel, causing an arc and a lethal electrical explosion. Generally, two factors contribute to these situations: defective components and complacency.

Inspectors must be aware that all forms of electrical inspections, especially electrical panel inspections, are inherently dangerous. Practice calm, steady movements and learn to avoid distractions. A sudden flash, shout or movement could cause an inspector to lunge and touch an electrically live and dangerous component. Advise your client that they should never remove an electrical panel cover themselves, as they should leave this duty to InterNACHI inspectors or qualified electricians. Before touching the electrical panel, inspectors should ask themselves the following questions:

  • Do I have an escape path? Make sure that you know where you can safely turn or step if you must safely escape a dangerous surprise, such as bees or sparks. An unfortunately placed shovel or extension cord, for instance, can turn a quick jerk into a dangerous fall.
  • Are the floors wet? Never touch any electrical equipment while standing on a wet surface!
  • Does the panel appear to be wet? Check overhead for dripping water that has condensed on a cold water pipe. Moisture can arrive in more ways than you can imagine.
  • Is the panel rusty? Rust is an indication of previous wet conditions that may still exist.

As an optional safety measure, use a voltage ticker to make sure the box is safe to touch. If the alarm sounds on the device, have the box examined by a qualified electrician. Also, safety glasses and other personal protective equipment may be used to protect against burns and electric shock.

While removing the panel cover, inspectors should:

  • Stand a little back while removing the cover, which makes it easier to remain in a blocking position.
  • Stand so as to block your client from touching the panel and its components.
  • inform the client that opening the panel is a dangerous step, and that if sparks fly, the client should not touch the inspector.

Service Panel Inspection

Inspectors can check for the following defective conditions during an electrical panel inspection:

Zinsco panels are believed by many experts to be defective
  • insufficient clearance. According to the 2008 National Electrical Code, most residential electrical panels require at least a 3-foot clearance or working space in front, 30 inches of width, and a minimum headroom clearance of 6 feet, or the height of the equipment, whichever is greater. If obstacles would make it unsafe for you to inspect the service panel, you have the right to disclaim it.
  • aluminum branch wiring.
  • sharp-tipped panel box screws or wires damaged by these screws. Panel box cover screws must have blunt ends so they do not pierce the wires inside the box. Look for wires that pass too closely to the screw openings inside the electrical panel.
  • circuit breakers that are not properly sized.
  • oxidation or corrosion to any of the parts. Oxidized or corroded wires will increase the resistance of conductors and create the potential for arcing.
  • damage caused by rodents. Rodents have been known to chew through wire insulation in electrical panels (and other areas), creating an unsafe condition. Rodents have been electrocuted this way, leaving an unsightly mess inside the panel.
  • evidence of electrical failures, such as burned or overheated components.
  • evidence of water entry inside the electrical panel. Moisture can corrode circuit breakers so that they won't trip, make connections less reliable, and make the equipment unsafe to touch.
  • evidence of missing or improper bonding. This may indicate improper wiring, damaged equipment or unsafe conditions.
  • the physical contact points of the overcurrent protection device to the contact point of the buss are not making good contact. The sounds of arcing (a cracking or popping sound) may indicate this condition.
  • panel manufactured by Zinsco or Federal Pacific Electric (FPE). These panels have a reputation for being problematic and further evaluation by a qualified electrician is recommended. Zinsco panels can generally be identified by a blue and silver "Zinsco" label inside the panel, and an embossed "Magnetrip" label at the top of the panel face. FPE panels should include, if they were not removed, one of the following identifying labels:
    • Federal Electric
    • Federal Pacific Electric
    • Federal NOARC
    • Federal Pioneer
    • FPE
    • FPE-Stab-Lok
    • Stab-Lok

Electrical panels are dangerous and should be handled with care. Does your home inspector check them? What about your home watch professional? This is part of our standard checklist and one of the reasons that sets us apart from everyone else.

Disadvantages of Solar Energy

While the considerable advantages offered by solar energy move some proponents to ignore the budding technology’s comparatively minor flaws, these imperfections must be acknowledged, lest their resolutions be stalled. We should take an honest look at the system’s disadvantages and seek to refine solar energy systems into a truly environmentally friendly alternative.

The most significant complaints with solar energy are:

  • lack of consistency and reliability. Solar systems rely on the steady absorption of sunlight -- particularly, subatomic particles called photons -- which can be easily deterred. The following factors limit the availability of sunlight:
    • latitude. Although solar power is an option almost anywhere on the planet in at least some capacity, efficacy falls sharply as distance from the equator increases. Residents of Vancouver, Canada, and St. Petersburg, Russia, for instance, are at a significant solar disadvantage.
    • clouds. Clouds diminish the power of solar panels, especially in habitually foggy or overcast regions. According to the National Renewable Energy Laboratory, "[T]he solar resource during foggy or low-cloud conditions is approximately 10% of the value under clear-sky conditions." Solar arrays in Denver, Colorado, would rarely be obscured by clouds, as that city experiences only 30 to 40 overcast days per year. Hilo, Hawaii, despite its proximity to the equator, receives rain an average of 277 days per year, which might make it a poor choice for solar-power generation.
    • night. The Earth itself is a rather large obstruction, and it acts nightly to disturb the flow of photons to helplessly immobile solar arrays.
Solar energy is reduced by overcast skies
  • environmental pollutants. A few of the more notorious substances contained in panels and associated equipment include:
    • cadmium. When sealed inside solar panels, cadmium is harmless. If leaked from the panel, cadmium can inflict serious environmental damage. Panels must be disposed of with extreme care in order to keep this carcinogenic substance from leeching into soil and water.
    • lead. Batteries, specifically deep-cycle, lead-acid batteries, are required by solar arrays to ensure a constant supply of electricity. They contain lead and sulfuric acid, which are both highly toxic, especially to marine creatures. Lead has been found to cause a number of impairments in children, including developmental disabilities. However, most of the material in dead batteries is recoverable if the batteries are recycled, as long as consumers make the effort.
  • roof considerations. Solar arrays are often installed on building roofs to make use of the large, empty, sunny space. As a consequence, repairs to the underlying roof become quite tricky and often require disassembly of the solar installation before even routine roof maintenance can be performed. It’s good practice to perform needed roof work before the initial installation of a solar system to prevent future headaches.
  • appearance. Like it or not, solar arrays speak loudly, and neighbors and passersby will take notice of the systems. Many homeowners are understandably reluctant to install a large solar array on an otherwise attractive tile roof. This issue is being addressed through the development of photovoltaic shingles, windows, and other technologies that blend more seamlessly with existing roof surfaces.

In summary, residential solar power has some aesthetic, economic and technical drawbacks, but many of them can be overcome by planning and responsible maintenance.

Choosing the Right Home Inspector

 

Are you buying a home? It's probably the most expensive purchase you'll ever make. This is no time to shop for a cheap inspection. The cost of a home inspection is very small relative to the value of the home being inspected. The additional cost of hiring an InterNACHI-Certified Professional Inspector® is almost insignificant. I recently wrote a blog about why even if you are building a home, you should get it inspected. The number of people who do not get inspections is concerning. Too many things can go wrong in the life of a home. Hiring the right home inspector will help you identify those systems and components that you will need to keep a close eye on.

For first-time home buyers, getting an inspection is even more crucial so you can learn the ins and outs of your home. I am First-Time Home Buyer Certified, meaning that I accept clients who have never bought a home and will spend extra time with them to help them understand how their home works.

You have recently been crunching the numbers, negotiating offers, adding up closing costs, shopping for mortgages, and trying to get the best deals. Don't stop now. Don't let your real estate agent, a "patty-cake" inspector, or anyone else talk you into skimping here.

I am an InterNACHI Inspector. So what does that mean exactly? Well for starters, I passed their test for the State of Florida to earn my license. I also have access to thousands of hours of continuing education credit. Every week I am taking a new course or giving myself a refresher. Why? So that I can be the very best in the business! The licensing of home inspectors only sets a minimum standard. Much like being up to code, any less would be illegal.  InterNACHI, the International Association of Certified Home Inspectors, front-ends its membership requirements.

InterNACHI inspectors:

  • have to pass InterNACHI's Online Inspector Examination, and re-take and pass it every three years (it's free and open to everyone, and free to re-take);
  • have to complete InterNACHI's online Code of Ethics Course (free to take after joining, and self-paced);
  • have to take InterNACHI's online Standards of Practice Course (free to take after joining, and self-paced);
  • must submit a signed Membership Affidavit;
  • substantially adhere to InterNACHI's Standards of Practice;
  • abide by InterNACHI's Code of Ethics;
  • have to submit four mock inspection reports to InterNACHI's Report Review Committee (for free) before performing their first paid home inspection for a client if the candidate has never performed a fee-paid home inspection previously;
  • within the first year of membership, have to successfully pass the following free online, accredited, and self-paced courses and exams:
    • InterNACHI’s "Safe Practices for the Home Inspector" course,
    • InterNACHI’s "25 Standards Every Inspector Should Know" course,
    • InterNACHI’s "Residential Plumbing Overview for Inspectors" course,
    • InterNACHI’s "How to Perform Residential Electrical Inspections" course,
    • InterNACHI’s "How to Perform Roof Inspections" course,
    • InterNACHI’s "How to Inspect HVAC Systems" course,
    • InterNACHI’s "Structural Issues for Home Inspectors" course,
    • InterNACHI’s "How to Perform Exterior Inspections" course,
    • InterNACHI’s "How to Inspect the Attic, Insulation, Ventilation and Interior" course,
    • InterNACHI’s "How to Perform Deck Inspections" course,
    • InterNACHI’s "How to Inspect for Moisture Intrusion" course, and
    • InterNACHI’s "How to Inspect Fireplaces, Stoves, and Chimneys" course.
  • have to pursue inspection-related training by taking 24 hours of additional accredited Continuing Education each year;
  • have to maintain their Online Continuing Education Log (free), per InterNACHI's rigorous Continuing Education policy;
  • have access to InterNACHI's Message Board for exchanging information and tips with colleagues and experts;
  • have access to InterNACHI's "What's New" section so that they can keep up with the latest news and events in the inspection industry;
  • have access to InterNACHI's time-tested Inspection Agreement, which keeps them (and you) away from lawsuits;
  • have access to InterNACHI's Report Review/Mentoring Service;
  • have to carry E&O Insurance (if their state requires it);
  • have access to a real estate agent Hold-Harmless Clause;
  • and have access to many other benefits, training, marketing tools and information to help themselves, as well as consumers and real estate professionals, provided for free by the world's largest inspector association.

I am amazed at the number of people who shop based on price alone. Sure, the guy down the road from me might be $50 cheaper. But what if he does not have the credentials? What if he is not InterNACHI Certified? After looking at the list of items above, would you trust him?  I realize that I am not going to be the right fit for everyone, and that is OK. I strongly encourage you though when you are shopping for an inspector, to ask them questions about their certification. InterNACHI is the foremost leader for education, training and development of home inspectors. Make sure your inspector is InterNACHI certified before you hire them.