Home inspections are one of the ways through which home buyers can protect themselves. This is actually a non-evasive type of assessment done to check if a home is in good condition. Home inspections are carried out by certified inspectors who are able to carry out the proper assessments needed. Once a seller accepts an offer from a buyer, it is important for the buyer to hire a home inspector to assess the condition of the home. The inspector will write a report through the use of home inspector software and then send it to the client. After the client has read the report, they can make their final decision.

The importance of home inspections can never be overemphasized. As a buyer, it serves as protection in case there happens to be a problem with the house. The inspection will allow you the chance to ensure you are buying the property that suits all your needs. With the inspector's report, you will be able to identify the major and minor problems in the house which will aid in making your decision.

When buying a house in Louisville, it is necessary for you to find a home inspector first. The inspector will bring a home inspector list and show you every item that needs inspection. The following are some of the things that the inspector would probably look into

- Electrical hazards
- Water and moisture leaks
- Signs of termites
- Rotting wood
- Any kind of dry rot in the structure
- Signs of indoor mould
- Other important parts of the home.

Furthermore, the air conditioning unit in the home must also be inspected. Plumbing problems should also be looked into critically as this is a major issue in many homes today. No home is perfect, which is all the more reason why one needs to conduct home inspections when looking into buying real estate within Louisville. Once the house inspector has completed his report, it is up to you to decide if any of the identified problems need to be fixed and by whom. You must also keep in mind that home inspections are not completely extensive and not every single problem will be identified. In some cases only serious problems or defects will be reported as these are the ones that will need major repairs or total replacement.

Another advantage of home inspections is that you can use the inspector report to negotiate the price of the home. In other words, you can get quotes for the needed repairs/ replacement and ask the buyer to take responsibility or subtract the repair/replacement cost from the overall cost of the house. Home sellers can also use home inspections to their advantage. A home inspection will really help the seller to identify and repair/replace damaged properties before showing the property to buyers. This will make the selling process easy because the buyer will not return to make further complaints. 

When looking to sell or buy a home in Louisville, it is always advisable to utilize the services of these inspectors in order to conduct thorough home inspections.

Buying real estate in Louisville can be a challenging task as there are various factors to consider when purchasing a home. One always needs to ensure that their hard earned cash is going into buying the perfect property to suit all your needs. Louisville has real estate agents who can aid in the process of finding you the ideal home. One process that must be completed before a sale can go through is conducting a final walk through the house. This is also known as the final verification of the condition of a home. It gives the property buyer an opportunity to verify that every aspect of that property is in good condition. This exercise is usually performed after signing all the paper work and is an imperative part of buying real estate in Louisville, since it ensures that the home is in the condition the a buyer expects.

Steps of the final walk through process:

When performing this exercise, the following steps should be followed :

• Draw up a checklist in order to guide you. This checklist should contain different aspects of the home that you wish to confirm is still in mint condition.
• Ensure all appliances are in good condition.
• Run the air conditioner and the furnace to ensure that they are working properly.
• Examine the ceiling, floor and walls in order to make sure that they are not damaged. Always run this step as walls and floors can easily be damaged by movers when previous occupants move out.
• Make sure that the previous owner has not taken anything that they were not supposed to take. Also ensure that they did not leave anything behind that belonged to them.
• Conduct a thorough check on the bathroom by running the showers, flushing toilets etc in order to ensure that they are in working condition.
• Check the doors and windows by opening and closing them clarifying that all outlets of the home are in perfect condition.
• Turn the faucets on and off to ensure that there are no leaks beneath the sinks.
• Make sure that all gardening systems such as pool cleaners and sprinklers are in working condition as well as affirm that there are not pesticide problems.
• Make sure that the garage door is functioning properly.
• The final walk through of a home is basically allowing the buyer a chance to inspect both the interior and exterior of the home.

These steps may vary as Louisville homes differ in their construction and layout. However, these are basic steps that will enable you to identify anything that is not in the expected condition. You will be able to find out if there are new damages to the appliances, fixtures or other items that are included in the purchase contract. If there were repairs agreed upon in the contract, you will also be able to guarantee that they were carried out in an appropriate manner. If there are appliances, fixtures or items that do not meet your expectations, your real estate agent should negotiate with the seller to ensure that they are fixed. Nevertheless, a final walk through is a very important exercise when buying real estate in Louisville.

There are many things to take into account when buying investment property. One such thing is the neighborhood the property is located in. The Louisville real estate market is very healthy with a high demand ratio,  but the neighborhood determines the type of tenants the property attracts and just how often you may be faced with vacancies. For instance, if you buy property near a university chances are that the majority of your tenants will be students and that means you will have a higher turnover of tenants.

The rent paid for the property will be your return on investment and thus you should find out what the average rent in the area is. If you find that charging the average rent is not going to cover all your expenses plus make some profit it would be best for you to keep looking. Do your research of the area well and try to make future predictions of just how high the rent is going to be. Generally there is an upward trend in the rents charged and a constant if not, declining property tax would be ideal.

If you are targeting families in Louisville, Kentucky as tenants then property that is located near schools would be a good choice. You will also have to look at the quality of the school as this will also affect your investment's value. If the school's reputation is poor then chances are that it will also reflect poorly on the amount you may want to charge for renting the property. This may also extend to the amount you may want to sell the property for in future.

Property taxes are inevitable even in the Louisville Real Estate market. As an investor in rental real estate you have to find out just how much money you will be left with after tax deductions. Go to the assessment office and get all the tax information on the property and you can even talk to some property owners in the area. This will ensure that the final decision you make is a wise one.

The Louisville, Kentucky municipal council will have information on any new developments that may be coming up in the area. If the area expects to have new establishments set up then that is a good indication that it has good growth potential. If you would also like to develop your own property further look into the requirements to be met before you are issued with a building permit.

Buying rental property in Louisville is certainly a profitable venture if you plan well, but it also requires a lot of research and footwork. It would also aid the process if you have realistic expectations to ensure that you are not disappointed after you jump into the market. Your overall goal is to make a profit so be sure to research all your facts well and you will find just what need within the Louisville real estate market.

For more information about buying rental property in Louisville, KY, please contact Nick Peskoe at 502-438-9138.

Making an Offer

A written contract is the single most important piece of paperwork in the real estate buying process. A written contract first starts with a written proposal, which not only specifies price, but also the terms and conditions of the purchase contract. Everything that you want to happen during a transaction must be included in the purchase contract or you won’t have the legal capacity to collect it later. For instance, if you want the seller to pay the closing costs for a transaction, then this must be included in the purchase contract.

One benefit of using a Realtor to facilitate the complicated process of buying a home is that Realtors use a variety of standard forms that are frequently updated to reflect current laws. When you hire a Realtor, all of these forms will be used in the home buying process, so you can be sure there will be no paperwork issues that arise during the transaction. Additionally, Realtors are well versed in disclosure laws that the seller must comply to. A good real estate agent will make sure that you have all the pertinent information when buying a home.

If you decide to not work with a Realtor, you must draw up a purchase offer or contract that conforms to state and local laws while incorporating all key items of the deal. State and local laws vary, so it is vitally important that you have someone to guide you through this complicated process.

What’s in an Offer?

The purchase offer that you submit eventually becomes the binding sales contract that completes the purchase of the property. Since the purchase offer serves as the ‘blueprint’ for the final sales contract, it’s very important that the purchase offer contains all the things that must happen during the transaction. A purchase offer typically includes such things as:

• The address of the property
• Proposed sales price of the property
• Terms of the contract
• Seller’s promise to provide clear title (ownership)
• Closing date of the sale
• Amount of earnest money deposit (if any) that accompanies the offer and how that money is returned to you if the offer is rejected
• How real estate taxes, utilities, and rents are to be adjusted between buyer and seller
• Who will pay for title insurance and all applicable inspections
• An offer expiration date and time
• Any contingencies accompanying the offer (explained below)

What are Contingencies?

Contingencies are used when you anticipate a potential problem occurring during the real estate transaction. Contingencies allow a buyer to cancel a contract without penalty if something goes wrong during the purchase. Some common contingencies written in purchase offers include:

• If a buyer cannot get a loan to finance the purchase, the buyer will not be bound by the contract.
• An offer is contingent on the buyer selling their current home. If they cannot sell within a certain time frame, then the buyer will not be required to purchase the home.
• If a home inspection report does not satisfy the buyer, the contract is voidable.

Negotiating the Price of a Home

There are certain situations that allow a buyer to have more leverage in the home buying process. You’re in a strong buying position if:

• You’re a cash buyer
• You’ve already been pre-approved for a mortgage
• You don’t have a present house that has to be sold before you can afford to buy
• If you meet one of these criteria, you might be able to negotiate more on the purchase price of a home than buyers who do not have this bargaining power. This is usually only true, however, in a buyer’s market. In a seller’s market, if a highly desirable property comes on the market, chances are it will go fast and sometimes for the actual list price.

It can also help in the negotiation process, if you know why the house is being sold. There usually is more room to negotiate on the offer price if the seller(s) have moved out and are paying a mortgage on a vacant property or are in a hurry to sell.

Earnest Money Deposit

Earnest money is a deposit that you give when making an offer on the house to show the seller that you are a serious buyer. This deposit shows your “good faith” – as sellers are generally suspicious of a written offer with no earnest money deposit. If the offer is accepted, this money will become part of the down payment on the house. While the negotiation is occurring, the earnest money check will either be held by your Realtor or an attorney.

Seller’s Response to Your Offer

If a seller signs your offer as it stands, it becomes a firm contract as soon as you hear of its acceptance. On the other hand, if the offer is rejected, then that decision is final – the seller cannot later change their minds.  If the seller likes some of your offer, but not all of it, then they can sign back a counteroffer, with the changes that they want to make. After receiving a counter offer, you have the opportunity to sign the offer as it stands or write back another counteroffer.

Every time that a counteroffer is made, the other side has the opportunity to accept or reject the offer, or to counter again. The offer only becomes binding when one party signs and accepts it as written.

Withdrawing an Offer

A lot of buyer’s ask if you can take back an offer after it has been written. Most of the time the answer is yes; however, you can only take an offer back if it hasn’t been accepted – or even in some cases if you haven’t been notified of its acceptance. It is usually a tricky process to rescind an offer, as you could risk losing your earnest money deposit or being sued for damages by the seller. If you want to revoke an offer, be sure to contact an attorney who is well versed in real estate contracts.

Who Pays for What in an Offer?

Who typically pays for what items in an offer is sometimes determined by local customs. But remember, everything in an offer can be negotiated. Typical offer items that are negotiated include:

• Inspections: Termite, Radon, General
• Property Survey
• Closing Costs
• Points on a buyer’s loan
• Buyer’s broker fees
• Repairs required by the lender
• Home protection policy

Offering to pay for some or all of these costs on either side can help facilitate a transaction. Since many home buyers are short on cash before a transaction, a deal might be more easily consummated if the seller agrees to pay some or all of these costs. Likewise, a seller may be more apt to deal with a buyer if they agree to take on some of the burden of related closing costs.

Ok, I admit it. I stole the concept of the three L’s and three C’s from an episode of House Hunters on HGTV. But bear with me, because it makes perfect sense. In fact, it makes so much sense that I was compelled to blog about it. Here goes nothing…

So many times during a search for a new home, first time home buyers fail to see the big picture. They dwell on the things that can easily be changed and get hung up on things that, quite frankly, don’t matter really that much in the grand scheme of things. More often than not, buyers are focusing too much on the three C’s of real estate when they should be focusing on the three L’s.

The three C’s of real estate are cleanliness, color, and condition. Let’s start with cleanliness. Trust me; I know it can be off-putting to walk into a house only to be distracted by things like clutter, dust, or pet hair. But here’s the thing: When people move out of the house, they usually take their dirty stuff with them. It might take some serious work, but the cleanliness of a house is too easy to correct to be a deal breaker. It only takes some elbow grease and a little bit of time, but it is correctable. Even things that appear to be more serious really aren’t that big of a deal. Stained carpets? Rent a steam vacuum or change out the carpet for something that suits your tastes better…Dirty, scuffed-up walls? Try some soap and water. It’s amazing what a sponge and some soapy water can get off of a wall. If that doesn’t work, just buy some paint and touch it up. It may seem like a lot of work to fix these things, but in the grand scheme of things, it’s not.

This brings me to my second point…Why does the color of rooms seem to be like a deal breaker to some people? Okay, I get it – it’s a pain in the you-know-what to paint a bunch of rooms. But really, how long will it take? A couple of evenings or weekends at most? In fact, it’s almost a good thing to have a bunch of rooms with colors you can’t stand…Why? Because it will motivate you to paint every room the exact colors you want and not settle with “Well, this color is ok for now…”

Does a house that you’re looking at have ugly wall paper? Rip it down! There are hundreds of tutorials online about getting rid of that ugly floral wall paper in your bathroom…And If you don’t feel like doing it yourself, there are plenty of services that will do it for you.

Finally, we come to the last “C”. Sometimes this one is the hardest to c past (get it?) for home buyers. We’ve all experienced it – You think you’ve found a great house in an outstanding neighborhood only to walk inside and find a kitchen that looks like it came straight out of an episode of the Brady Bunch. Don’t panic. Although it seems overwhelming, these things can be changed. Even little things like changing the hardware on the front of kitchen cabinets can make a big difference. Don’t worry if you don’t have enough money to renovate right away. Choose one small project at a time and keep plugging away. When you have your dream kitchen it will all be worthwhile.

Now that we’ve covered the three C’s, it’s time to take a look at the things you can’t change when buying a new home. These are the real deal breakers in a home search: the three L’s. The three L’s are lot size, layout, and location.

Let’s start with lot size. Ok – so you’ve found the perfect move in ready house, but it has a tiny front or back yard. Now this might be just fine and dandy for some prospective home owners; however, if it’s important for your new home to have ample outdoor space, then this definitely has to be a deal breaker -- because lot size is never going to change…Unless you neighbor dies and wills you half of their lawn, your lot is never going to get any bigger. Thirty years from now when you finally pay off your mortgage, your lot size will be the exact same size it was the day you bought the property.

Another thing you cannot really change in your new home is its layout. “But Nick, can’t you knock down some walls to open up the living space?” Sure you can...to an extent (and that’s only if support, plumbing, or electrical issues don’t get in the way). But that is not exactly what I’m talking about here. Say you are a family that is getting ready to have a child. That house with only one bedroom upstairs and one on the other side of the first floor might not work for you. Or say you are thinking about getting ready to retire soon. That house with the garage that enters into the basement might seem okay for now, but are you going to want to lug groceries to the top of those stairs, say, ten years from now?

Finally, the biggest deal breaker of them all is location. Say you found the most amazing house…It’s everything you’ve ever wanted in a home and more, but there is only one problem: It’s not in a great location. The best advice I can give to buyers is to find the location you want and then update the home to suit your needs. Point being, aside from lifting the house onto a trailer and moving it to another part of town, you’re stuck with that location. You can change flooring, countertops, and appliances; however, you simply cannot fix the fact that your house is in a neighborhood where it is the nicest and most expensive house on the block, or that it is too far away from work.

When buying homes, buyers often make the mistake of focusing on the three C’s when they should be focusing on the three L’s.  Don’t let this happen to you!