Sunday, March 4, 2012

First Time Homebuyer’s Real Estate Word for Today is Truth-In-Housing

First Time Homebuyer Word Truth in Housing

In a past episode of Cash Cab, an Emmy award winning television game show, a taxi full of contestants with stumped by the acronym, FSBO. As a REALTOR® in the Minneapolis/St. Paul north and east metro, I was a bit surprised “For Sale By Owner” eluded them. That is until I remembered the times a glazed look came over my buyer’s eyes when I mentioned escrow and earnest money. These real estate terms are easily be confused with other real estate financial terms like down payment or cash to close. It became apparent to me that a buyer’s confusion is very understandable; after all homebuyers do not buy houses everyday.

I thought a glossary of real estate terms might be helpful to the First Time Homebuyer. Over the past year and throughout 2012, I will present and explain terms often used by REALTORS® in a series of posts for the first time homebuyer.. This way a first time homebuyer can skip buying that big “how to buy a house” book or attending a non-required First Time Homebuyer Class and have a quick resource at your fingertips. I am continuing the series with Today’s Real Estate Term:

Truth-In-Housing Inspection A truth-in-housing inspection is a pre-listing, point-of-sale inspection required by a local municipality. The inspector will perform an inspection of the home and note hazardous and sub-par features of the home. In Minnesota, there is no Truth-In-Housing inspection requirement to sell your home at the state or county level. There are however a number of communities in the Minneapolis/St. Paul metro require a pre-inspection report. These inspections have many names including: Truth-in-Sale of Housing Disclosure, Time-of Sale, Time-of-Sale Code Compliance, Dwelling Maintenance and Occupancy Code Compliance, Housing Code Compliance Inspection or Housing Maintenance Code Inspection. Some of these inspections are done by inspectors that are city employees while other communities have licensed private home inspectors to perform the inspection of the home. But in many cases, it will be the homeowner’s responsibility to select a private inspector to perform the inspection prior to listing the home for sale.

Note: There are a few counties that do have point of sale requirements for septic systems. Always check with your city and/or county regarding whether or not they have point-of sale or truth-in-housing inspection requirements as cities do update and change requirements from time to time.

The Twin Cities communities that currently require a home inspection are:Private Inspectors (Selected by Homeowner)
  • Bloomington
  • Hopkins
  • Maplewood
  • Minneapolis
  • St. Paul
  • South St. Paul
City Inspectors
  • Brooklyn Park
  • Crystal
  • New Hope
  • Osseo
  • Richfield
  • St. Louis Park
 Truth-in-Housing versus Buyer’s Home Inspection.
 First Time Buyers can and should have a potential home inspected prior to buying it. An offer or purchase agreement can be written with an inspection contingency, allowing the buyer time to hire and review the home with an inspector. This contingency can be written into the contract to purchase whether the city requires a truth-in-housing inspection or not.  It may seem a bit redundant to re-inspect a home that has a point of sale inspection. However, the benefits of walking through the home with an inspector as he points out specific concerns of the structure far out weigh the monetary cost for the first time homebuyer.

Copyright 2012