Pre-Inspection, Truth-In-Housing, Point-of Sale--What's The Diffence?

 

During a pre-listing visit with home sellers I am often asked whether there is a state or county requirement for pre-inspecting a home.  On occasion a seller will mention a friend or relative that had their home inspected prior to the first potential buyer walking in the door. 

Having a home inspection before the sale can be beneficial and optional but can also be required in some Twin Cities communities. The benefit comes at the time of  the offer, when some buyers will actually opt to forgo the inspection, choosing to just read the report. Buyers can also contact the inspector of the initial report for a private walk-though at a discounted rate. I am often asked if this is a common practice in the Minneapolis/St. Paul area.

In Minnesota, there is no Truth-In-Housing inspection requirement to sell your home at the state or county level. There is however several communities in the Twin Cities metropolitan area that do require a pre-inspection report. These go by many names: 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 inspectors to perform the inspection of the home to meet the city requirements. In this instance it would be the homeowner’s responsibility to select a private inspector to perform the inspection prior to listing the home for sale.

The Twin Cities communities that currently require a home inspection are:
 

Private Inspectors (Selected by Homeowner)

• Bloomington
• Hopkins
• Maplewood
• Minneapolis
• Robbinsdale
• St. Paul
• South St. Paul

City Inspectors

• Crystal
• New Hope
• Osseo
• Richfield
• St Louis Park

Can a home seller have a home pre-inspected even if the city does not have a point of sale requirement?
Absolutely! Having your property pre-inspected with a written inspection report available to potential buyers can speed along the negotiations for many buyers. Some buyers will choose to review the report and not have another inspection completed making the offer not-contingent on an inspection. Other buyers will choose to have the inspector who did the pre-inspection come out to the home to explain the details in the report. This is often completed for a reduced fee to the buyer since the work has been completed and it is not as time consuming to the inspector. However a pre-inspection does not guarantee that the buyer will not opt to hire their own independent inspector of the home.

If I give an Inspection or Truth-In-Housing Report, do I have to complete a seller’s disclosure?
That depends.  State law requires that you disclose what you know about the condition of the home so in most cases, a full seller’s property disclosure would be completed by the home owner even if an inspection report is available. However, in the case of an estate or rental property where the owner did not live in the home and has limited information regarding the property to disclose, an inspector’s report can be provided along with an alternative, minimized disclosure that meets all state requirements.

Another note on wells and septic systems: 
Many communities and some counties have point of sale inspection requirements for the septic system and/or private well serving the property in addition to disclosures required as part of a purchase agreement.  Contact me for additional details

Ready to list your Minneapolis/St Paul Home?  Let me be your professional guide. If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me, Teri Eckholm of Boardman Realty, a call or visit my website for a FREE Home Buyer Success Guide or FREE Home Value Report. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District. Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Copyright 2015 www.terieckholm.com 

What is a Truth In Housing Disclosure? And When Should it be Completed?

As a Minnesota REALTOR®, my real estate clients, both buyers and sellers, are sometimes confused by inspections and disclosure requirements in the Twin Cities and surrounding suburbs. Sellers want to know what they should disclose and if they are required to have an inspection done first. While there are a handful of communities in the 7 county Minneapolis/St Paul metro that do require a point of sale home inspection be completed prior to listing a home for sale, most do not. Buyers often wonder if they should be receiving a written disclosure or if the seller will provide an inspection report.

Just the other day I was on the phone with a client who is getting his house ready to put on the market. He was lamenting that he had call the truth in housing (TIH) inspector too early. He was in the middle of several small repair projects when the inspector visited so he received a number of ratings that were below safety standards. The inspector cannot assume a homeowner will actually finish all of the projects in progress. Lesson learned here: Don’t call the inspector until all repairs are complete!

Another first-time selling couple asked about having their home pre-inspected. They live in a community that does not require a point of sale TIH. Their beautiful home was full of many updates and was obviously well maintained. As they filled out their seller’s disclosure, they brought up the subject of a pre-inspection. A friend of theirs had recently sold a home and had done this. When the offers came in, the buyers on their friends’ home opted to forego the inspection, choosing to just read the report. My clients were wondering if this was a common practice and if a pre-inspection was recommended and/or required.

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 Twin Cities that do require a pre-inspection report. These go by many names: 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 inspectors to perform the inspection of the home. But in many cases, will be up to the home owner select a contractor to perform the inspection prior to listing the home for sale. It is very important to contact the city to make sure the proper procedure is followed when selling a home to avoid fines.

Private Inspectors (Selected by Homeowner)

• Bloomington
• Hopkins
• Maplewood
• Minneapolis
• Robbinsdale (Must be from approved list)
• St. Paul
• South St. Paul

City Inspectors

• Crystal
• Golden Valley (Sanitary Sewer only)
• New Hope
• Osseo
• Richfield
• St. Louis Park

Can I still have my home pre-inspected if my community does not have a truth-in-sale requirement?

Absolutely! Having you property pre-inspected and an inspection report available to potential buyers can speed up the home selling process. Some buyers will choose to review the report and not have another inspection completed making the offer not-contingent on an inspection. Other buyers will choose to have the inspector who did the pre-inspection come out to the home to explain the details in the report. This is often completed for a reduced fee to the buyer since the work has been completed and it is not as time consuming to the inspector. However a pre-inspection does not guarantee that the buyer will not opt to hire their own independent inspector to give what they will believe to be an “unbiased” assessment.

If I give an Inspection or Truth-In-Housing Report, do I have to complete a seller's disclosure?

If you have lived in the home, I would recommend that you complete the disclosure to the best of your knowledge. A seller must disclose any material facts that you know about the home. However, in the case of an estate, flipped home or rental property where the owner has not lived in the home for some time if ever, the owner will have limited information regarding the property. In this case, an inspector's report can be offered in lieu of the completed disclosure to meet the state disclosure requirement. A buyer may also agree to waive their right to the required seller’s disclosure. In either of these cases, this will not exempt a seller from any local or federal statutes (i.e. water well disclosure and lead based paint are examples).

What if it is a bank owned home? Does the bank have to provide a seller’s disclosure on a foreclosure?

Minnesota state law does not have different rules for a bank or other financial entity. They must disclose material facts on a seller’s disclosure, offer an inspection in lieu of foreclosure or have the buyer agree to waive their rights to a disclosure.

More Disclosure Questions?If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me, Teri Eckholm of Boardman Realty, a call or visit my website for a FREE Home Buyer Success Guide or FREE Home Value Report. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Copyright 2014 www.terieckholm.com

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 www.terieckholm.com