Home Inspectors Look

for the Big Stuff 

    You just had a home inspected and although there is a lot of information in the report, you still have all sorts of unanswered questions.  How old is the clothes dryer?  Does the oven keep a steady, constant temperature?  Is the sprinkler system on an automatic timer?

     That happens because property inspectors have the specific task of finding and identifying the significant defects in the major systems and components of a property.  A leaking drainpipe or a cracked and shifted foundation system qualifies as significant defects in the major systems and components of a building.  The property inspector should be letting his client know about those issues that could greatly affect the safety, habitability or value of a property.  This is the agreed upon standard of the recognized inspections associations and validated in the California business and Professions Code.

    Typically the inspector will identify a problem and its location plus inform his client of the severity of the issue to the best of his ability and responsibility as a generalist.  If the situation is severe, such as a hole in the roof; or if special tools are needed such as a camera to look inside a chimney flue, or special knowledge is required to sort out why the air conditioner is not cooling, the inspector will recommend that the appropriate expert be called in to perform a more detailed investigation and evaluation of that specific situation.  Having a specialist provide a more detailed evaluation of a specific system protects both the buyer and the seller by correctly identifying the true condition of the system and any related costs fo repairs.

    For the other stuff, it is best the buyer ask the seller to disclose the age of the dryer, how well the oven holds its temperature and to demonstrate and operate the sprinkler system plus any other of the many specific items someone who lived in and managed the property is likely to know and understand.  Look to the property inspector to identify the big stuff, such as a major problems with the building's foundation, plumbing, heating, electrical and the roof.

Article extracted from Realtor Report Vol.83 #15, written by John A. LaRocca

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What is a short sale?

A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.

Why is the number of short sales rising?

Due to the recent economic crisis, including rising unemployment, and drops in home prices in communities across the nation, the number of short sales is increasing. Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.

A short sale can also be the best option for a homeowners who are “upside down” on mortgages because a short sale may not hurt their credit history as much as a foreclosure. As a result, homeowners may qualify for another mortgage sooner once they get back on their feet financially.

What challenges have short sales presented for REALTORS®?

The rapid increase in the number of short sales, and the short sales process itself present a number of challenges for REALTORS®. Major challenges include:

1. Limited experience
   Many REALTORS® are new to the short sales process; a difficulty which is compounded by many lenders' lack of sufficient and experienced staff to process short sales. Even if the REALTORS® are experienced, most servicers are under-staffed and still not adequately trained, making negotiating a short sale particularly difficult.
   
2. Absence of a uniform process and application
   Currently, both short-sales documents and processes are lender-specific, making it very difficult and time-consuming for REALTORS® to become knowledgeable and efficient in facilitating these transactions. 
   
3. Multiple lenders
   When more than one lender is involved, the negotiations are much more difficult. Second lien holders often hold up the transaction to exert the largest possible payment, in exchange for releasing their lien, even though in foreclosure they will get nothing.

As a result of these challenges our members have reported difficulties with: unresponsive lenders; lost documents that require multiple submissions, inaccurate or unrealistic home value assessments, and long processing delays, which cause buyers to walk away.

What is being done to address or eliminate these challenges?

On May 14, 2009, the Obama Administration announced its upcoming Foreclosure Alternatives Program. Among other things, the new program:

• Establishes financial incentives for servicers, sellers, and second lien holders to encourage the completion of short-sale transactions.
  
• Requires that a timeline, of no fewer than 90 days, be set to allow a homeowner to sell a home, without threat of foreclosure action.
  
• Requires the short sale agreement to specify reasonable and customary real estate commissions and costs to be deducted from the sales prices. (The servicer must agree not to negotiate a lower commission after receiving an offer.)
  
• Will provide standardized documents, including short-sale agreements and offer acceptance letters.

When Is a Real Estate Agent a REALTOR®?

A real estate agent is a REALTOR® when he or she becomes a member of the NATIONAL ASSOCIATION OF REALTORS®, The Voice for Real Estate®, the world's largest professional association. The term "REALTOR®" is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and abides by its strict Code of Ethics.

Founded in 1908, NAR has grown from its original nucleus of 120 members to more than 1 million today. NAR is composed of REALTORS® who are involved in residential and commercial real estate as brokers, salespeople, property managers, appraisers, counselors, and others who are engaged in all aspects of the real estate industry.

Members belong to one or more of 1,700 local associations/boards and 54 state and territory associations of REALTORS® and can join one of our many institutes, societies, and councils. Additionally, NAR offers members the opportunity to be active in our appraisal and international real estate specialty sections. REALTORS® are pledged to a strict Code of Ethics and Standards of Practice.

Working for America's property owners, the NATIONAL ASSOCIATION OF REALTORS® provides a facility for professional development, research, and exchange of information among its members.