Warning signs for new home buyers
A new home buyer incentive bill signed in October makes first-time homebuyers eligible for an $8,000 tax credit and purchasers who are “buying up” eligible for a $6,500 tax credit.
To qualify, you must put a home under contract before May 1, 2010, and close on the house before July 1, 2010. There are a number of other requirements to qualify for the tax credits. Make sure you consult your tax adviser and your real estate agent to gain a full understanding of the details.
In addition to this tax incentive, home prices are the lowest they have been in years, making this a great time to purchase a home.
But buying a home, especially for the first-time buyer, can be an intimidating process. One of your best protections is a home inspection.
A little knowledge may save you the disappointment of a “bad” home inspection, plus save you paying for an inspection that reveals a money pit.
Here are a few things you can look out for while shopping.
Poor grading: A house should sit on a little hill so rain water that falls around it naturally runs away. If you notice that the ground around a house is flat, keep your eyes open for additional problems. One word of warning here. Many house yards are not properly graded. This is not a reason to immediately walk away from a house. Instead, be extra alert for water entry into basements and crawl spaces. If the house has a basement, look at the foundation walls for water staining or cracking.
Bad siding: Primarily from the 1970s through the mid-1990s a number of siding products made from wood composition materials were installed on homes. In some cases these sidings perform so poorly that the only solution is to remove them and install new siding or install vinyl siding over the original siding. Many of the wood composition sidings have a faux wood grain pattern on the surface of the siding. If you think the house you are considering may have a wood composition siding, start looking for defects. One common defect in these sidings is delamination of the bottom edges. If you can pull the siding apart along the bottom edge, it is defective. Another common defect is nails that have been driven below the surface of the siding. If you push on these nail heads and there is a dime size soft spot it means the siding has started to decay. If you notice either or both of these conditions in the siding, exercise caution — replacing the siding on a house can be very expensive.
Defective plumbing: From the mid-1980s to the mid-1990s many homes were plumbed with polybutylene piping. We now know that this material was defective. Leaking plumbing can result in excessive damage to the house and your belongings. Polybutylene piping is usually grey and can be seen in unfinished basements or crawl spaces and under sink cabinets. If you can find where the main water line enters the house, look for a sky blue colored pipe.
Old roofing: When asphalt composition roofing gets old, it begins to curl at the edges of the shingles. It also loses the granules (small, colored pebbles) from the surface of the shingles. Often you can tell when a roof is old just by looking at it from the ground and seeing the curled tabs or eroded granules.
Signs of settlement: Although you may hear the term "normal settlement," no real settlement is normal. Houses whose foundations have settled can require thousands of dollars in structural repairs to ensure their stability. Obvious signs of settlement are cracks in the foundation walls if the house is constructed over a basement or crawl space or cracks in the concrete floors if the house is constructed on a concrete slab foundation.
