It’s only one week until I close on the house. Finally, I’m feeling that this is really going to happen and I’m getting anxious–the good kind of anxious. The nervous kind of anxious I’ve been havin’ for so long that I can’t wait until I can sleep a whole night without waking up thinking about it all.
I’ve definitely told myself that I’m moving because today I made the arrangements to stop the utilities here and start them in the new place.
Today I also went out to the house to check on what the contractor has completed. Because I don’t have a key yet, I could only check out the outside.
This brings me back to the inspections and appraisal.
I’m getting a VA-guaranteed loan, so I hope what I’ve experienced may help anyone in a similar situation, because no matter how much you read and how many questions you ask your agent, there seems like there are always surprises. Here are some of the details about the inspections and appraisal that I had done ( none of which can really be done until you’ve made an offer and have a signed contract with the seller with a stated price):
The Home Inspection: This is done so you can know what problems there might be both inside and outside of the house. Most likely, as a prospective buyer, you will have looked the house over pretty thoroughly and discovered some of the obvious problems, but a good home inspector should know a lot more and have specific equipment to get into places (such as ladders and moisture-identifying meters) that a normal buyer doesn’t have no matter if he has looked at the house several times.
On inspection day, it’s good to hang with the inspector, ask questions, and just learn about all that house contains, both good and bad, after all, you are paying the guy! My inspector was cordial and informative, and I felt comfortable asking him anything. His inspection took about three hours, and then he followed it up with a 38-page detailed report, which included lots of photos. He charged $275, which I thought wasn’t bad. The price is determined by the size and age of the house, and all of the extra features it might have to be inspected (such as a swimming pool or lawn sprinkler system).
If problems are found, this inspection allows the buyer to re-negotiate with the seller for a lower price or to ask the seller to repair things. What I learned is to ask the seller to fix everything that needs fixed. Although the sellers I’m dealing with initially said they wouldn’t pay for any repairs, when my agent sent them an amendment to the contract, they agreed to do everything we requested. There were still a few things I hadn’t asked for, and now wish I had.
Although a copy of this inspection went to my finance company, surprising as it may seem, the VA doesn’t require that this inspection be done.
The Termite Inspection: Some home inspectors will also do a termite inspection, but mine didn’t but recommended another guy for this job. I didn’t go to the house for the termite inspection, but my agent went to let the guy into the house. It couldn’t have taken much time because the termite inspector called me to tell me he was finished about 5 minutes after their agreed-upon meeting time. He didn’t find any evidence of termites, but he did find several problems, which he cited as being conducive to termites: some foliage too close to wood siding, a bit of rotting wood at the bottom of door frames on the garage, and wooden spacing boards that were put in when a new patio was laid. The cost of this inspection was $80 and was required by the finance company and seemed to be required by the VA. However, the information that I read about VA loans says that this is one of the items that “the veteran cannot pay for.” We’ll see how that falls out at the closing, because, sure as the world, I did pay for it.
The Appraisal: After the home inspection is done and the buyer (veteran) decides that he really wants this house, that’s when all the real paperwork must be signed for the finance company. (The buyer definitely has been approved for the loan prior to this and has already supplied the finance company a load of documents–at some point I’ll add a post about all the documents I presented to the finance company to get approved, but not now.) Among all these papers is one document that gets the appraisal process started, and the buyer (veteran) has to pay for it; you can pay up front or even put it on a credit card. It cost me $400; this may vary a bit state to state.
The finance company arranges for an appraiser from a VA-approved pool of appraisers. I kept waiting for someone to contact me to say the appraiser was going out to the house to do the appraisal, but then, to my surprise and elation, my finance officer emailed me that the appraisal had been done and, basically, without any unexpected problems, I would be getting the loan and the house!
The appraisal actually has two aspects to it. One is to determine the value of the property. This is done to see if the house values more than the amount of the loan the buyer (veteran) is asking for. If it doesn’t, the buyer will have to try to get the seller to come down or be willing to put in more money up front to cover the difference.
The second part of the appraisal is really another inspection. The VA says that the house must be livable and that this inspection is for safety purposes not cosmetic problems.
My appraisal came out mostly positive. The house appraised for more than the amount I agreed to pay for it, and as far as the inspection part, the VA appraiser noted basically the same problems that the termite inspector had. Therefore, these have to be remedied, and then both the termite inspector and the VA appraiser have to go back out to house to give their OK.
That’s why I went out to the house today because the contractor has been working to repair what I had asked the sellers to do and also the areas that the inspectors required. Some things look complete, but it looks like he has a bit more to do. I’m hoping that it gets done tomorrow, as the termite guy and the appraiser are set to go back out on Monday.
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