When buying your first home you’ll be making one of the largest investments of your life. According to Zillow, the current median home value in Maryland is $272,400. That’s almost 4x the Maryland median household income of $69,272! Many buyers will finance this purchase over a 30-year period with monthly payments that can cover up to a third of their gross income. With such a large investment it is critical that you educate yourself on the pitfalls that can turn what should be a celebratory milestone into a regrettable nightmare.
Taking Responsibility
Just like any other industry, real estate has its fair share of fraud and abuse. While a vast majority of home sellers are genuinely honest, their goal is to sell their home, not point out all the reasons you shouldn’t buy. It falls on the responsibility of the buyer to ensure that they conduct all of the due diligence required to ensure that they are purchasing a quality home. Picking a Realtor with home building experience is your front line of defense against scams and fraud.
Pick a Real Estate Agent With Home Building Experience
Let’s face it. Most home buyers are not experts in home construction. They’ve likely been renting a home or apartment where all repairs and upgrades are handled by a landlord or property manager.
Toilet leaking? Call the landlord. Electrical outlet not working? Call the landlord. Having owned nothing but a screwdriver, how can a first-time homebuyer be expected to understand and identify the potential risks when it comes to overdue maintenance and repairs? The honest answer is, they won’t. This is why it’s so important that you hire a real estate agent that is not only effective at paperwork and negotiations, but is also experienced with home construction.
A Buyer is Only as Effective as His or Her Team
By selecting a real estate agent with construction experience you will be in a position to better understand the potential issues with your home. This agent should be able to answer questions such as:
- How long does a typical furnace last and how much do they cost to replace?
- What risks are involved with owning a septic system?
- Is removing the wall between the kitchen and the dining room viable?
- How would I be able to finish the basement for additional living space?
One of the many things that makes AE Home Group so great to work with is that Evan, the co-founder, holds an MHIC license and has renovated many homes from scratch. Evan is able to provide all the answers when it comes to questions about potential upgrades and their cost.
Your real estate agent will act as a professional fiduciary in protecting you against fraud, scams, and non-disclosed issues with the home. They’ve been through thousands of homes and numerous transactions. With their experience they will be able to point out issues that require a keen eye and many years of walking through houses and working through contracts.
Never Skip a Home Inspection
In a seller’s market like today, it may be tempting to waive a home inspection in order to give your offer an extra boost. You may have convinced yourself that everything in the home is great and an inspection would just be a waste of money. This is the home of your dreams and you don’t want to risk not getting the contract, right?
Remember, if you’ve fallen in love with the house then you’re going to be looking through rose-colored glasses. This makes it even more important that you have an impartial third party inspect the property on your behalf. They’ll be able to find and identify the issues that you may have missed, providing you a list of items you should consider having corrected by the seller.
Today there are thousands of licensed home inspectors in the state of Maryland. The quality of these inspectors vary wildly. Many are upstanding professionals who are truly dedicated to their craft, while others are inexperienced scam artists who treat each inspection as a shortcut to a quick dollar. In these situations, lean on your real estate agent to make a recommendation for an inspector they’ve worked with and vetted through past experience.
What Protections do I Have?
Even with multiple showings and a full home inspection, there are many issues that will go undiscovered. For example, it can be nearly impossible to identify a basement flooding issue when it hasn’t rained in weeks. In addition, an inspector will have a hard time discovering an insulation problem on a perfect Spring day. These are known as latent defects.
Disclosure Law
Latent defects can show up unexpectedly and cause financial harm. To protect home buyers, Maryland law requires that sellers disclose any and all latent defects that are known issues with the house. While it can be difficult to prove, the seller can be held liable if a buyer can provide evidence that the seller was aware of an issue and fraudulently hid it from the buyer.
Scam and Fraud Education
Sometimes education is the greatest protection of all. There are many tools out there that make you aware of the latest scams in the real estate industry. By leveraging this personal knowledge you’ll be more aware of the risks involved with buying a house and be equipped if an issue was to arise.