Guide to Insurance and Inspections

Guide to Insurance and Inspections

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Would you like to be in the know about insurance and inspections when buying a home?

All of the  information out there about searching for homes to buy, working with realtors, and getting a mortgage loan can be overwhelming. There are even plenty of tips out there to make the moving process easier. However, two of the areas which can cause just as much confusion, and can either make or break the homeownership experience, are home inspections and homeowners insurance. These factors can heavily influence repeat buyers and real estate investors, too. So what do you need to know?

Home Inspections

Many people often try to justify not getting a home inspection. Don’t fall into this trap. Always, always get an inspection. Period.

While the risks of major issues may be lower in certain scenarios, and those buying with enough cushion to tear down and build from scratch without breaking a financial sweat may not be worried. However, not getting a property inspected can be extremely bad news. Honestly, you never really know what is lurking within a home unless you have an inspection. Most people underestimate the costs that can arise if they don’t know what they are getting, and there are more liabilities than you may think.

Always get an inspection, even on new homes, or those that pass the eye test. Think about how much you are investing. A couple hundred dollars on an inspection is a great deal on ‘insurance’ when you are putting tens of thousands on the line. This applies whether you are putting in real capital, or borrowed money.

Many will find it prudent to go above and beyond the basic home inspection and ask for mold tests, termite inspections, and anything else that could be a problem down the road. For those afraid of needlessly spending more money than they have to; consider getting a basic inspection, and then ask  the inspector whether they feel there is any value in deeper inspections or not.

Choose a reputable, unbiased inspector. They shouldn’t try to offer to do any repairs for you. A good inspector will be detailed, and will at least find minor issues that can be improved on. If they find nothing, they may be getting paid off by other parties in the deal to ensure you don’t get scared off. However, it is also key that buyers recognize the difference between minor improvements they can make later, and critical repairs than need to be made immediately. If the AC is going to cost $6k to replace, or the house needs new wiring and plumbing, you will  want to know up front.

Homeowner’s Insurance

Buyers should always get insurance. If you are taking out a mortgage loan, it will be mandatory to obtain all the insurances your lender deems necessary. This list keeps on getting longer and longer. Buyers that fail to educate themselves on this upfront will soon be made aware of how important it is to have insurance when the time comes that they need it. As you may have heard, it is better to have insurance and not need it than to need it and not have it.

It is common to be required to have general homeowners insurance, flood insurance, separate interior insurance for condos, special disaster insurance and any number of other insurance options.

The costs of insurance is determined by the value of the property, cost to rebuild the property, value of what you own, and risk of damage. Insurance premiums may also be lowered by deductible amounts, having security systems in place, and having disaster protections in place. It is also important to note that some insurance agents are bound to certain higher levels of coverage than others. Those with existing coverage for other assets may even find dual discounts.

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