Home Inspection Issues in the Northern Virginia Market - Things to look out for when purchasing a property

Home Inspection Issues in the Northern Virginia Market

·         Things to look out for when purchasing a property

Once you have found a home to purchase, you will most probably have a contingency upon a home inspection written into your contract.  This contingency allows the purchaser to visit with a professional home inspector to go carefully throughout the whole home to check and make sure that everything works.  Homes of different types, built at different times often have typical defects for that type of property.  Now that the standard real estate contract language no longer has a defined standard as to what a buyer can expect from their home (see blog 3/19/14), then it is up to the seller whether they want to remedy certain deficiencies. And up to the buyer as to whether they want to accept the house in that condition, ask for improvements or a cash concession, or move on to purchase a different property.  The contract is totally negotiable through this contingency.

Let’s consider some local, industry-standard resolutions which have been established over time.

1.       “Not up to code”.  All building codes, including structure, plumbing, electrical and conditioning, are continuously changing.  Only a new house will be built to current building codes.  So no, an owner is not expected to bring a house up to current building codes in order to sell their home.

2.       Part of the house is older, and the buyer is being advised to “budget for replacement”.  This could be a roof, hot-water heater, furnace, carpet, etc.  At the time of the inspection, the unit was working, but older.  Basically, either the buyer noticed this expense when they made their offer, in which case they took that into consideration when making the offer.  Or, this new expense takes them by surprise and is out of their budget/ not something that they want to take on.  The parties should negotiate a satisfactory solution.  There is no requirement that the seller make a concession, and the buyer does not have to buy the home with this older equipment.

Do be aware that when you buy a home, there will be a continual need for maintenance and improvements.  I offer a home-warranty for my purchasers so that the costs of maintenance during the first year will be limited.

3.       Newly renovated kitchens, bathrooms and additions.  Contractors will tell you that they do not need a permit to “replace existing work”.  So if they are putting in new kitchen cabinets, or re-working a bathroom within the existing walls, then they do not need a permit for this work.  Many renovations were done throughout the 1970s, 1980s and 1990s without permits.  This way, the owner would avoid paying higher real estate taxes on a renovated property.  More recently, buyers have been insisting that sellers provide permits for work done in the property.  Inspectors, and the buying public, expect that the improvements be done within the building code of that renovation.  So they expect baths & kitchens to have GFCI outlets, bathrooms should be properly vented (and this includes properly venting the sewer systems.)

    Let’s look at some prevalent local property types and the items often un-covered during inspection.

A.      1980s townhouses.  During the 1980s, my (ex)husband and I used to refer to “ the attack of the killer townhouse”.  It seemed that all the treed lots within 15 miles of DC were being over-run by townhouses.  Now, these popular homes offer a simple and convenient housing style for many home-owners.  There are two major problems with these homes, which we sometimes still uncover; FRT plywood and polybutelyne pipes.   Fire- Resistant Plywood (FRT plywood) was used for the roof sheathing (under the shingles) in nearly all the townhouses built in the 1980s.  This plywood can become spongy and un-safe and is subject to failure.  Nearly all buyers will want this plywood replaced.  (Realtors are surprised to see it still out there after we have been requiring the replacement for years.  Also, I have seen some recently re-shingled roofs installed over this deficient plywood!  Do be aware though, that newer sheathing will also be fire-retardant, but OK.  Also, there is a particular type of FRT which is found for the first 3-4’ of a roof, next to the party wall which is OK.)  Likewise, polybutelyne pipes should be replaced.  These grey pipes were installed during the 1980s, and they are subject to failure.  In short a leak can spring up, and flood out at any time.  In the latter part of the decade, the polybutelyne pipes were installed with copper fittings, which we were told would be sufficient.  However, at this time, plumbers agree that these pipes too should be replaced.  Newer plastic pipes are white and made with PVC which is considered safe at this time. 

B.      1970s homes.   We do not have too many homes built during this time-frame.  There are single family homes and townhouses throughout the area.  This era pre-dates the energy crisis, and so homes with original siding, windows and insulation were not well insulated.  If these items have not been improved, then most of today’s buyers will expect to be replacing windows, siding and upgrading the insulation.  Also, some homes of this time-frame will have aluminum wiring throughout the house.  This wiring is now considered dangerous and subject to catching fire, and so nearly all buyers will want this wiring replaced.

C.      1960s & 1950s homes.  In this time-frame, it is mostly single family homes which were being constructed.  Often the exteriors are brick or mostly brick, interiors have dry-wall, and forced air heating systems.  (Today’s buyers may find the room-sizes small, and may not be satisfied with the size of the closest and kitchens.)  By this time, most homes now have central air conditioning installed, utilizing the existing forced-air duct work.

 The electrical systems of these homes were not designed for all the electrical appliances that we have now.  You may find 2 prong outlets, undersized electrical panels, in-adequate circuits.  Most buyers will expect a concession for electrical problems, as they most probably did not notice the issue when they toured the home. At this time, buyers expect Federal & Pacific Electrical panels to be replaced as they are noted as subject to failure. 

The copper pipes of these homes are starting to spring pin-hole leaks.  Particularly in homes which have had a lot of use (many occupants) over time.  These holes can occur in very random locations.  Underuse can be a problem too.  I have often sold homes where the seller was not using one or two of the bathrooms, and then the seals in the plumbing fixtures dry out and cause leaks.  

Sewer lines may have been constructed with Orangeburg lateral sewer lines.   This clay-type of sewer line will last for 30-60 years, which means that it is now subject to failure as it was used between 1940 & 1970.  The homes which have less grade between the home and the street will find these sewer lines failing first.  This repair costs several thousand dollars.  Neighbors and proficient local Realtors may know about neighborhoods where most home have had to have to the sewer lines replaced.  

D.      1940s homes and earlier.  At this time, we will find these homes being sold 3 ways; un-renovated, totally renovated, or something in between.  If you are buying an estate sale, or un-renovated home, expect to make major changes to the property to bring it today’s life-style expectations.  Many homes have been continually improved over the years, and so you will find the home inspection alerts from the various generations depending on when the home was updated.  Realtors will often call these homes “updated” rather than “renovated”.  If the buyer is paying a premium price for a newly renovated home, then they expect that home to conform to today’s living standards.  Original electrical panels are undersized and have fuses.  There may be “cloth & button” wiring in the home, which is considered sub-standard.  

Minor Problems which occur on many homes with Renovated Kitchens.

a.       Granite counter tops have been installed everywhere for sellers to quickly attract buyers.  Usually there are problems with the installation.  It is difficult to anchor the dishwashers to a solid counter top, so the dishwasher needs to be properly installed.  Most disposers do not have the required gap on the waste water line.  This air gap will prevent the waste water from draining back into the disposer.  An air gap can be created by anchoring the waste water line to the underside of the granite.  The stove may be missing the “anti-tip bracket”.  This small device is shipped along with the stove.  A competent installed with anchor the bracket to the wall, and then clip it on to the back-side of the stove.  Having this device installed will prevent the stove from tipping over (in the rare event that a small child or large stove is placed on an open oven door).  These kitchens should have GFCI outlets for any outlet close to the stove, cooktop, or sink.   Microwaves and stoves should each have their own electrical circuit.  The microwave should be installed a sufficient height above the cook-top. This will be a problem if older cabinets were used, and the microwave was simply inserted into the space previously occupied by an exhaust fan.  The refrigerator may have the handles installed in an inconvenient direction.  Most buyers will want these items remedied.  They paid for a renovated kitchen, and they expect the kitchen to meet the modern standards.

Universal Problems which occur on many homes.

b.      Exterior drainage concerns often come up for many single family & townhouse properties.  Over time, the fill dirt around the foundation system will wash away.  This creates a “negative grade” for the water to run back towards the house.  In this case, the top-soil should be pulled away, and then fill dirt brought to the site in order to create a slope away from the house.  This is a labor intensive repair, and so it is easier for young energetic buyers to deal with.

c.       Older bathroom tile should be re-grouted or re-caulked.  This will preserve the water-tight bath/shower enclosure and prevent having to replace the tile. 

This list is not meant to be exhaustive.   I am sure that home-inspectors and other Realtors will know of other items which are often discovered at a home-inspection.     These are the items and typical remedies which I have encountered while selling real estate for several decades in this area.    I do offer a one year home warranty to my buyers to mitigate the cost of repairs during the first year.  I recommend that you request that the seller sell the home to you in “normal working order” whenever possible.  And I work with some great home inspectors so that the buyers can be educated about the property that they are buying. 

Happy, educated house hunting!

* Check back for more details about how the current real estate contract lacks basic protection for the buyers of real estate in Northern Virginia at this time.

New Year, New Taxes, New Forms for Virginia Real Estate in 2013

While the real estate market in the commonwealth is roaring ahead with the State sales up 18%, and prices up 12%¹, the Realtors are active in making sure that the voice of home-owners is heard and that the good news will continue in the Commonwealth.

One of the most important factors of a location is reaching it through the transportation system.  The Virginia Realtors are supporting Gov. Bob McDonnell’s transportation bill in order to facilitate adequate funding for our roads and transportation systems.  Revenues from the 17.5c/gallon gasoline tax, which was put in place in 1986, have been falling due to the improved efficiency of cars, and the increase in the use of alternative fuel vehicles.  Meanwhile, the transportation costs are increasing as the number of miles has risen, and due to increased asphalt prices.  This has created stress within the transportation budget;  funds are being diverted from public transportation and new roads to maintenance.  The Governor is proposing to get rid of the gasoline tax, and instead raise the sales tax by .8c.  This will result in a sales tax of 5.8% for most goods, which is lower than the surrounding states.  Sales tax revenues do grow with inflation, which means that the funds will be available to cover increasing costs.  This alleviates the transportation fund being dependent upon the stagnant tax revenues from the sales of the number of gallons of gasoline.   Also, registration fees will rise $15, and there will be an additional $100 fee to register an Alternative Fuels Vehicle.   All this results in the additional funds needed to keep Virginia’s roads & rails running efficiently, and keep commuting times reasonable in the bustling Commonwealth.

The Northern Virginia Association of Realtors (NVAR) has been busy again updating their standard forms.  Among other miscellaneous changes, the standard listing agreements and buyer agency forms which are used by the sellers and buyers to hire their Realtors have been updated.  Now these agreements will expire at midnight on the agreed date.  I thought that my work hours were long enough, as the contracts have always included weekends and time-frames which ended at 9pm each day.  The real estate contracts still use the 9pm time-frame for the expiration of contingencies etc.  Welcome to the 24 hour world of electronic communication!!

1.              Full report available at http://www.varealtor.com/sites/default/files/Virginia%20Monthly%20Report[1].pdf
2.         http://www.governor.virginia.gov/utility/docs/Transportation%20funding%20fact%20sheet.pdf

The new Northern Virgina Real Estate contract will result in huge changes.

The new real estate contract, coming out in January 1, 2012 will make the housing sell in AS IS condition.  I believe that this will result in prices falling.  It will also change the way we do business. 

They are planning to change the way we sell real estate here in Northern Virginia.  The homes are to sell in AS IS condition, not in normal working order.  This will change a lot of the ways that we do business.  I do believe that this will result in prices falling more than they would of without this change. 

The expectations of what the buyer is getting will be lowered.  We have already seen the market be particularly brutal to the older, single family homes.   And indeed the older homes all seem to have aged disproportionally in the past year. 

Just one year ago, the homes that were built in the 1980s or newer seemed to have features which the market wanted.  They had master bedroom baths, good closets.  Indeed the townhouses have been pulling ahead in the marketplace.  Now the homes seem dated when they were built before 1995.  The extra rain storms have taxed roofs and basements.  The droughts have been hard on trees. 

Earlier today, at the NVAR convention, we saw a preview of the new real estate sales contract to be used in Northern Virginia.  For 30 years we have been transferring in real estate in "normal working order".  That is, that the buyer could expect all the items in the house to basically function as expected.  And so all parties could argue about what is "Normal", and what the buyer should expect to get.  Now all the buyer is told is "WYSIWYG" what you see is what you get; the house sells AS IS.  However the appliance, equipment or structure is operating at the defined time is what you are buying.  We have already seen the market be particularly brutal to the older, single family homes.   And indeed the older homes all seem to have aged disproportionally in the past year. 
Just one year ago, the homes that were built in the 1980s or newer seemed to have features which the market wanted.  They had master bedroom baths, good closets.  Indeed the townhouses have been pulling ahead in the marketplace.  Now the homes seem dated when they were built before 1995.  The extra rain storms have taxed roofs and basements.  The droughts have been hard on foundations. Buyers' are very cautious when looking a these properties because they do not want to just take on someone else's problems.
Sellers should do their bet to put the properties in top condition and consider replacing older systems. It is better to get permits when doing remodelling so that they can assure a buyer that the work was done properly. When putting a house on the market, be prepared to do a home inspection prior to marketing so that you can let a buyer know that you are ready to sell. Also, home warranties are important as they truly do mitigate costs when moving into a new home (Old Republic paid out 8 times so far this year to my clients).
In this ever changing real estate world, this new challenge of selling the properties as they are presented will lead to new norms in how we do business.