What Comes Free?
When you find a property you are interested in, it is under my understanding that you need a few things before signing a contract:
- a thorough inspection by an expert
- an attorney to review contracts
That's all I can think of, but I don't think that can be done for free?? The inspection is probably free, is it? But, how much might you blow on attorney fees only to find out that your deal won't work? Bear in mind I don't know any attorneys.
A professional home inspection is not free. If you know a contractor, or other reliable handyman that is willing to help you're ahead of the game. Hiring a service would start at $300.
Are you in a local REI club? Maybe someone there could offer assistance with an offer form they are using.
Absolutely not!!
Why would an expert provide you their expertise and time for free? How would they stay in business?
The cost of the home inspection varies - but so does the quality of the inspection. I use a company that's a bit more pricey than the competition. But for that I get 3 guys out to the house. One of them is a licensed P.E. one is a pest specialist and another is a guy with 20+ years general contracting experience (to check for shoddy workmanship) The P.E. makes sure everything conforms to code. I've had some issues with that - it also brings up a lot of points to knock the price around a bit more
I've seen other companies send out one guy who took a home school course. Is my extra $100 worth it? I'll let you decide.
Plus I get a full write up, digital photos on disc and they have their own book that matches up with the report and elaborates on the problem and what is involved in fixing it. All this gives me a strong position with no exta work on my part. And minimizes the chances of unpleasant surprises.
Point well taken. My concern is how much money might you be out if your deal goes dead just before you are ready to sign off? Let's assume that at the last minute after you've done all your due diligence a problem arises with inspection or a legal issue. You've already paid all the necessary prerequisite fees to attorneys, inspectors, etc. You get no deal! How much money do you lose, on average?
That's why you have to make $$ on the deals that do go through - in part, to cover your expenses. If you spend $200 - $300 to get an inspection, and the inspection isn't to you liking, you have an out. Of course, get the property under contract first, with a subject to inspection clause in it.
-e-
Yes, get it under contract with the inspection clause. This is not a "weasle" clause. It's in every sales agreement I've ever seen. So if anyone gives you too much grief - if any - about it red flags should be going up.
Here's another way to look at it. You can risk loosing $300 on an inspection or you can risk losing thousands by not doing one.
Remember your deals are usually structured on the condition of the property. If the numbers first worked up net me 10K and then the inspection comes back with 8K in repairs that the owner "forgot" to mention - everything is off. They can either lower the price or I walk. You also have to keep in mind that all you can do is estimate the cost of repairs. So leave a sizable cushion. You don't want to do a deal and come out square - that's just a waste of time...
You could always have a contractor come do a free estimate - they usually offer those. That'll give you a more accurate ball park figure to work with.
As you do more deals you'll also get better at spotting the issues yourself. That's why I always want to be there during the inspection. You learn a lot of things from those guys. Then you can see for yourself if the deal even makes sense before you pay the inspector.
Roger