Do we need an inspection on a new construction home?

Dave,

My wife and I are currently building a house and wonder if we need to get a home inspection even though the home will be new? We don’t want to spend money if it isn’t necessary, but also want to make sure we go through every process correctly. If we do need an inspection, at what point in the building process should we have it done?

Thanks, Josh—Grand Junction

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Josh,

Yes. It is my recommendation that you always get an inspection (especially if the home you are purchasing is NOT new), but I will say that if there is one scenario where it might be o.k. to skip the home inspection it would be in the case of new construction. You have to remember that any new home has been inspected over and over and those inspections have also been inspected. To put it mildly any new construction project has been meticulously inspected from the foundation up and this ensures that each new building has been built to local building codes and is structurally sound and mechanically safe. These inspections catch most mistakes along the way and thus limit the real effectiveness of a new home inspection for anything but minor/cosmetic items. 

A home inspection will cost somewhere between $300 - $450 and my experience is that very few substantive items are discovered on new construction home inspections. Generally items that are discovered are VERY minor, but there have been times where something more significant was found and needed to be corrected. I will also point out that virtually every one of those more significant items would have presented themselves in short order without the home inspection.  From a timing perspective, you should consider the home inspection sometime around the CO, Certificate of Occupancy. If you use this time frame, you can be confident that the home will be mostly complete and all that is left will be mostly cosmetic issues. This is also a good time to do the inspection as any items identified can just be added to the builders punch list to complete prior to close. Although there are no guarantees with getting any home inspection, they do provide some surface level peace of mind. Also remember that every builder will provide at least a 1 year home warranty for your entire home and most of them are willing to help even after that one year if the problem proves to be a material or workmanship issue. 

Ultimately what an inspection on a new home provides is some insurance that there are no major problems with the quality of construction, workmanship or mechanical systems. You have to ask yourself if the peace of mind is worth the cost? I can say that I have not seen a home inspector yet that is as qualified as the general contractor you hired to build your home and the inspections your home goes through prior to getting its certificate of occupancy have been extensive and complete. It is a call you must make, but it is completely understandable if you skip the home inspector on a brand new home!  Hope this helps and hope you had a wonderful Thanksgiving!

Dave Kimbrough
The Kimbrough Team

What time of year should we sell to get the best value on our home?

Dave,

Is it true that waiting until spring to sell your home will get you the best offers? We want to sell our home this fall, but don’t want to get shorted on value. Will we get the best price for our home or should we wait until the spring?

Anthony and Deb, Grand Junction

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Anthony & Deb,

What a great question and one that we hear often, especially this time of year! This is also a difficult question to answer, however, there are good reasons to sell now and also some good reasons to wait and sell in the spring! Keep in mind that there are so many variables to consider that each decision should be made on a case by case basis. Before making your final decision, always contact your real estate professional and meet to decide the best way for you to proceed and maximize your return. I will give you some basics on selling now vs. waiting till spring.  

Selling now has its advantages, particularly considering the lack of competition you will face this time of year. Many sellers are pondering the same question you are and will ultimately decide to wait till spring to sell, thus leaving fewer homes on the market throughout the winter. Showing and selling during the winter months is less appealing to many because of the holiday season. Most families, and mine is one of them, value the holiday season as a time to reconnect and concentrate on friends and family. Trying to show and sell your home during this time can really put a damper on and increase the hassle factor of an already busy time of year!  This clearly is a decision that your family will have to make for itself. When it comes to competition, less competition is a good thing when selling! If a buyer has fewer options to choose from it significantly increases the chances of your home being chosen...at least that was always my thinking when it came to high school dances...(I always hoped for low guy turnout!). Another advantage to selling this time of year is the unique ability to showcase your house as a home!  There is no better time to showcase the warmth and down home feel than winter and “homes” always win over “houses”. 

There are several reasons not to sell during the winter and hold out until spring and increasing prices is one of them. Generally in our market buyers start to emerge from hibernation sometime in mid-March to mid-April and the summer sprint begins. Our team experience is that during the months between April and June we typically generate the most contracts each year, and this is also the time when we will typically see prices really start to rise. You can generally anticipate good demand every spring and thus price your property a bit ahead of winter's pricing curve.  Keep in mind that this increase in demand also brings increased competition. Nothing does more for pushing prices upward than increased demand, thus why we see prices really start to rise throughout summer and level off a bit during winter – basic economic principles. If you are absolutely looking for maximum value, then waiting till spring is probably your safest choice, however, every year we sell many homes during winter that get max value, as they face less competition and show flawlessly. I hope this helps, but I can’t over emphasize to consult with your real estate professional and come up with an individualized plan and a plan that is best suited to you and your family. 

Dave Kimbrough
The Kimbrough Team

5 steps to getting a good deal on your first home

Dave,

We have recently married and are hoping to start a family in the next year or two and want to purchase our first home before having children. We currently rent, but feel the time is right to begin looking for our first home. It is extremely important to us that we get a good deal.

Getting a good deal is number one on our list of priorities, as it will help ensure that our home purchase will not only turn out to be a great place to live, but also a good investment. What tips can you provide for getting a good deal?

Stephanie and Mark, Fruita

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Stephanie and Mark,

“Are you looking for an agent to help you purchase your first home? Call The Kimbrough Team today 970-263-7355!”

Great question as getting a good deal has been at the top of many buyers lists over the past several years. First make sure you define “good deal” for yourselves. There is a difference between a “good deal” and a “steal”. Steals are a lot harder to come by and there are many lost good deals in the wake of the quest of a steal. Since the economic downturn and the housing bubble burst, getting a value when you purchase has taken on new importance. I have heard a saying that says, you make your money when you buy, not when you sell and I believe it to be true. There are several things you can do to help ensure that you get a good deal when you purchase.

1. Get educated
   The more you know about the market and the price range in which you are purchasing, the more likely you are to get a deal when you purchase. Knowledge is power and part of getting a good deal is being able to recognize one when you are presented with it and making a realistic offer. I have seen many a “good deal” lost because the buyer did not recognize the deal and did not make a realistic offer.

2. Find a knowledgeable Real Estate Agent
   Notice I said knowledgeable. Again an agent who can help you not only find, but identify a good deal is a huge asset. You need an advocate who is scouring the market for you, looking for that “just right” deal.

3. Use a reputable local lender and get pre-qualified
   Once you have found your “good deal” you need to be ready to pounce and pounce with confidence that the sellers can appreciate. A reputable lender behind you will help you beat out other bidders. Trust me, sometimes it’s not all about how much the offer is, sometimes it’s more about how likely is it to close. The prevalence of fly by the seat of their pants lenders adds weight to an offer backed by a reputable and trusted lending partner.

4. Be decisive
   Part of the art of getting a good deal is the skill of being decisive. Don’t hem n’ haw, when you decide to act, act decisively and don’t look back. Steps 1-3 above will help you be decisive. I have also seen many deals get lost, while waiting on a decision.

5. Get a good inspection
   Part of getting a good deal is making sure that your good deal is still a good deal after you close. Your good deal, may not be such a good deal if it needs a new roof after living there 6 months.

These are not the only things that you need to do to help ensure you get a good deal, but they are in my mind the most important. If you follow these 5 simple steps, you will be well on your way to getting your good deal. Much success in your pursuit of the often elusive, but always rewarding “good deal”! : )

Dave Kimbrough
The Kimbrough Team

Should we invest in a property near our son's university?

Dear Dave,

My wife and I very recently sent our son off to college. We are considering investing in a house near the university he is attending. We would like to know your opinion on investing in a property near a university or college. Is it a good idea to buy a house that could be used as a rental for college students or is it a nightmare waiting to happen?

Any feedback you have would be appreciated!

Thanks - Joe and Darbi - Grand Junction, CO

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I think purchasing a property is a great idea! I would suggest you check with your financial adviser or accountant, but I would bet the investment would pay off over the course of your son’s college career. I will add one qualifier, it will work out better if your son is also responsible and will responsibly help you maintain the property while living there. Let's look at a quick scenario to demonstrate how you might benefit from purchasing, rather than pouring out rent over the next 4-5 years.

Let’s say you purchase a 3 bedroom condo for $300,000 and put 5% down, which is $15,000. You then own a 3 bedroom condo with a monthly payment estimated at $1,700 which should include taxes and insurance. You only need one bedroom and surely your son has a couple of friends that he would like to have living with him. Let’s assume they would be willing to pay $750 per month, which in turn makes your monthly out of pocket shelter expenses $200, which is $500-$600 per month less than having him rent. Five years from now, assuming that your son takes a bit longer to graduate than 4 years, and let's also assume the market has improved 5% per year for your condo, it would then be valued at $383,000. Let's also assume that you have paid the principle down to $260,000, which leaves you with over $100,000 in equity when you go to sell. I know there are expenses and this is not direct profit, but at the very least you should receive a good return, rather than footing the bill with nothing but a diploma to show for it. The numbers in this scenario may not be exact, but it does illustrate the fiscal advantages to owning vs. renting for your college student.

There also is a loan specifically designed for this situation and it is referred to as the “Kiddie Condo Loan”. The requirements are designed specifically for your scenario and require that the child must live in the home and be on the loan. The financial qualifications for the loan are done off your information, but it allows your son to begin building a credit portfolio for after he graduates. There are several great things about this loan. You can qualify with only 3.5% down, the loan is assumable and with today’s low interest rates, assumable loans may be very advantageous in the future. If your son decides to stay in his college town after school, he can assume the loan from you and take over the payments or you could sell it and have them assume your interest rate. As you can see, there is a good case to be made for a college purchase, in town or out of town, for kids who are attending college.

Lastly, one of the great things about University towns, their real estate generally will not fluctuate up or down as drastically as other areas, because they have built in buyers and sellers that cycle through which generally helps ensure good demand and smooth out any other market influences. Worst case scenario would be that you have a rental in a college town that will be pretty easy to rent year after year. I say, “do it and you are likely to be glad in the long run”. Hope this helps.

Dave Kimbrough
The Kimbrough Team

4 fall home improvements to make before winter

As the weather finally starts to get colder around the Grand Valley, more people are thinking about how to prepare their homes for the winter season.

We found some great advice from Inman News for 5 home improvements to make before winter that will end up saving you money in the long run. An added bonus is that each project is under $500.

1. Make sure your house is proper insulated

A lot of homes today are under-insulated. This means higher energy bills and houses that get really cold in the winter and really hot in the summer. Make sure your attic and crawl spaces are properly insulated.

Even if you know your home is insulated, it’s important to remember that older insulation breaks down over time and becomes less efficient. It could be a good idea to check-up on your insulation and make sure it's actually doing its job.

Seller Tip: If you’re selling your house this fall keep in mind that homebuyers often question utility bills and insulation will help lower those, making your house more appealing.

Project timeline estimate: DIY homeowners can tackle this project over a weekend. Hiring a pro to handle the job can get it done in less than one day.

Cost: About $400

2. Hydroseed your lawn

Grass seeds grow and take root better in cooler weather, so sowing new seed at this time of year will create a lush green grass when it comes back in the spring.

Hydroseeding is one of the least expensive ways to seed a lawn. It’s a slurry of grass seed, mulch and fertilizer that you can spray onto your yard to promote new growth.

We’ve talked about this before, but improving the landscaping and lawn of a property can have an impact of as much as 20% of the value of the home, which is huge if you’re thinking of selling this spring. The landscaping is also one of the first things a buyer sees, which makes it an important part of the home’s curb appeal.

If you're looking to save money, hydroseeding is something you can do yourself. The home improvement store sells the mixture and you can hook it up to your garden house. You can ask them for some tips on how to properly apply the mixture.

3. Install an electric fireplace if you don’t have a real one

As the weather turns cooler more people begin spending time inside. Electric fireplaces are clean, energy efficient additions to any home. They also add instant visual appeal and warmth at the same time, something that both a buyer and seller can appreciate.

You’d be surprised at the variety of options available. They range from plug-in units to built-in features so it’s easy to find one that fits the room’s decor, and your budget.

Depending on which style you choose, the average cost to install an electric fireplace is around $300. If you’re looking to save some money, opt for a plug-in unit to save the most on building or installation fees or convert an existing fireplace.

4. Install a programmable thermostat

With programmable thermostats, you can set your heat to optimal temperatures, depending on the time of day and day of the week. Some of the latest models offer wireless controls and smartphone apps that let you change your heating and cooling settings remotely. You won’t be over heating your house when no one is home anymore!

Newer models range from about $100-$400 with installation, but will save you up to 20% of your energy bill.

SOURCE: INMAN.COM