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 

Completing a Minnesota's Home Seller Disclosure--What is a Unique Well Number?

Every time I do a listing on acreage I fear for my sellers getting writer's cramp with the amount of pages they need to complete. In addition to the Minnesota's seller’s disclosure form for residential real estate which runs about 9 pages, there is a 3 page well disclosure and another 3 pages to disclose anything and everything known about the private sewer or  septic system plus the handy-dandy location map to note where the well/septic are located. Add in the federally required lead based paint disclosure if the home was constructed prior to 1978 just for fun.  Plus there's a form that must be completed if the property was ever used for the production of methamphetamine, but thankfully, most home sellers do not have to complete that one. This makes the grand total of required disclosure paperwork for most acreage homes in Minnesota to be 16-18 pages. That’s quite a bit of writing but it is essential when selling your home...and it needs to be completed correctly.

I counsel my clients selling homes on acreage to complete their disclosures in detail because interested buyers need to know the correct information. When it comes to the well disclosure, it is very easy to complete properly if the home was constructed in the last few decades. This information is online and has been for years. Sadly, many sellers don't know how to look up their well, so often the forms are incomplete. 

How do you find your Minnesota  Well?  If the well on you property was constructed after 1975, use the Minnesota Department of Health’s Unique Well Number LOOK UP TOOL Every well constructed since the late 1970's has been tagged with a metal tag and its unique number. The numbers are logged and tracked by the MDH. The tag gives the number but not the depth of the well and it can be difficult to read. I recommend to my sellers to use the well number look up tool, print the report and attach it to the disclosure.

Once located, I recommend that sellers print out a copy of the report and attach to the disclosure paperwork because it shows all the necessary well construction details (i.e. who constructed, when, depth, type, etc.) 

HELPFUL TIPS FOR USING THE LOOK-UP TOOL I have noted a few important tips for using this website because it can be a bit frustrating if you are not familiar with it. Here are a few quick tips to simply your look-up experience:

1. Use Internet Explorer as your browser. The site doesn’t always work well with newer browsers like Firefox and Chrome. There isn’t a mobile app for this either.
2. Disable pop-up blockers. The map and information will show in a pop-up window and it looks like the site isn’t working if you have pop-up windows blocked.
3. The information posted will not always show the current owner but the name of the owner or builder that filed the original paperwork.
4. Sometimes the well will not always be listed by street address but still can be found by looking at the plat map of the street.

Take the time to fill out the form correctly as this is important information for the new buyer. Buyers appreciate having all the correct details on the disclosures. It takes a bit of research, but in the end, it will give a buyer the information they need to make an informed decision. Since many other sellers leave this information blank, homeowners who go the extra mile will make their property stand out from the rest!

 
Copyright 2014 www.terieckholm.com

Tips for the First Time Homebuyer—Get a Home Inspection!

Yea!! You just found home the perfect place to call home—Your DREAM HOME!  As you sit with your REALTOR®  to write up your offer, she asks, “Do you want to do an inspection?” And suddenly, all reason and goes out the window because you answer, “Inspection? Do we really NEED an inspection? The house looks perfect!”

As a REALTOR® representing clients throughout the north and east Minneapolis and St Paul metro, I am surprised when someone opts to forgo an inspection. Buying a home is the single most important purchase most people will make in their lives. It is important to have a non-biased professional inspect the property for defects prior to the final papers being signed.

Homebuyers can have a number of questions about a home inspection. Frequently I hear, what does the inspector check in a home inspection? Who selects the inspector? Who pays buyer or seller? What is the cost of an inspection? What really needs to be inspected?

I believe every buyer, first time or not, should inspect a home they purchasing. But there are different types of few different types of inspections. A total home inspection does cover the house, but often additional experts are required to inspect the total property. And sometimes additional or special testing is required so that the buyer can have a better understanding of the home they are purchasing.

Total Home Inspection—$400-600 depending on the size of home and company selected for the inspection. The fee it is paid for by the buyer.  This is a great starting point for most home buyers and it may be the only inspection necessary for most single family homes.  The basic inspection will be a 2-3 hour top to bottom look at the house; usually including a review of the roof, foundation, mechanicals, structure and built in appliances to ascertain if they are in proper working order. Other testing could be recommended if the home inspector notices any particularly unusual situation that will need expert evaluation. Some inspection companies will charge additional fees for checking outbuildings and unusual features so verify what is covered under the basic service prior the scheduled appointment.

Septic Compliance Inspection—$400-500 for the inspection plus $300-$500 to pump the septic system before the test can be performed. This test is requested by the buyer but traditionally paid for by the seller. In Minnesota, if the septic system is found incompliant, the state will be notified and the homeowner will have one year to bring it up to code. In the case of a foreclosure or short sale, the property owner may insist that the buyer pay for all inspections including the septic system. The cost of purchasing a home with the septic system AS-IS can be risky as the cost of replacing a failing or non-conforming system is $15,000-$20,000.

Well Inspection—$150-$250 This is an inspection of the well by a licensed well installer to determine if the well is in good operating condition. The fee can be paid for by either the buyer or the seller.

Well Water Testing—$100-$200 depending on which elements the water is tested for. In most cases, this test is paid for by the seller. The water is collected by the independent testing service and some tests will take up to two weeks for results unless additional fees are paid for rush testing. Most often a test is for will require a water test for bacteria and nitrates. Some buyers will also request a test for lead.

Inspection for Radon—$150-250 usually paid for buy the buyer. Radon is a naturally occurring radioactive gas which is the leading cause of lung cancer for non-smokers. It is found in many Minnesota homes entering through cracks in basement foundations and open tops of block walls. It is colorless and odorless so most homeowners are not aware of a problem unless the home has been tested. It is estimated by the Minnesota Department of Health Radon Information page, that 1/3 of Minnesota homes have radon levels that pose a substantial risk to homeowners.  As of January 1, 2014, sellers in Minnesota will have to disclose if there is a known radon risk in the home.

Inspection for Lead—$200-300 usually paid for buy the buyer. Home sellers are required to disclose whether there are any known risks of lead in all homes built prior to 1978. Lead was a common ingredient in paint prior before 1978. Many homeowners have not tested so they are not aware of lead risks in the home. It is important to assume that older painted surfaces used paint containing lead. If these surfaces have been painted the risk is limited. But home buyers do have an option to have additional testing completed on the home they purchase. The Minnesota Department of Health has additional recommendations for testing a home for lead on their website lead poisoning can cause permanent problems with health, learning and behavior in children and significant health problems with adults. 

 

Mold Inspections—$200-$1000 Mold testing is costly and according to the Minnesota Department of Health Mold Information Page, it does not need to be done for most homes unless there is an indication of a problem. Stucco homes built in the late 1990’s with poor air circulation have been known to have significant potential problems. Homeowners with stucco homes will often test the home prior to listing and have a report for the buyer to review. Buyers can also elect to retest the home if the previous report is not acceptable to the buyer.  If a foreclosure and short sale owner does not have the funds to do the expensive moisture testing, the buyer may have to pay for the test or accept the home AS IS. This is a risk as repairs for full mold abatement can run into the tens of thousands of dollars and the home would be unlivable during the process. 

Copyright 2013 www.terieckholm.com