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7 Hidden Home-Buyer Deal Killers
DEAL KILLER #1: THE ROOF
A well-maintained roof can last 30 years or more—but inferior installation or low-quality shingles or tiles can mean you need to replace a roof much sooner than expected. If a home inspection shows the roof has a life expectancy of less than 5 years, most insurance companies will not insure the home! Your lender requires homeowner’s insurance on your home before you close.
You may be able to see from the ground whether there are deteriorating shingles or missing shingles. But a full home inspection or roof inspection by a licensed individual will bring to light any issues and the approximate age of the roof.
What it could cost: If you do have to replace the roof, it can set you back—a lot. A new roof can run anywhere from $8,000 to $30,000, depending on the size of the home.
DEAL KILLER #2: ELECTRICAL PANEL
Homes build from 1950's-1980's may have an electrical panel that most insurance companies will not insure. Federal Pacific Electric’s Panel (FPE Panel) has proven to have serious circuit breaker issues that pose a serious threat to consumers. These panels MUST be replaced before you close on the home so you can obtain homeowner’s insurance. Your lender requires homeowner’s insurance on your home before you close.
What it could cost: Typically, the cost to replace these panels runs from $1,100-2,000. This will need to be replaced be for you can secure homeowner’s hazard insurance for the home. Replacing these panels needs to be done by a licensed electrician and may take time to have permits pulled before the installation.
DEAL KILLER #3: ALUMINUM WIRING
Aluminum wiring was found in home built from 1965-1973 (approximately). It too has shown to be an electrical safety hazard and most all insurance companies will not insure a home that has aluminum wiring. Aluminum wiring needs to be made safe or replaced before you can obtain a homeowner’s insurance policy. Your lender requires homeowner’s insurance on your home before you close.
What it could cost: The cost to repair aluminum wiring: $85 to $200 per outlet and the cost to replace aluminum wiring: $300 to $500+ per outlet
DEAL KILLER #4: POLYBUTYLENE PIPES
Polybutylene Pipes were used in the plumbing of many homes from 1978-1995. These pipes are known to rupture and cause property damage. Because of the potential for major water damage, insurance companies want these pipes removed or replaced before they insure the home. Your lender requires homeowner’s insurance on your home before you close.
What it cost: Cost will be determined by the size of the home and the location of all the water distribution stations and of course repair damage to the walls. I have seen this repair range anywhere from $3000 to $8000.
DEAL KILLER #5: SEPTIC TANK SYSTEM
Not all homes have public sewer systems installed. In Brevard County there are many homes that have a septic tank system on the property and are not connected to a public sewer system. The seller in most cases may have no clue their septic tank system is not working properly.
The only way to determine if the septic tank system in functioning properly is having a septic tank inspection by a licensed Septic Tank Company. This usually cost you an additional $350-$500 over and above your other home inspection cost. They will let you know if it is functioning properly or not.
What it cost: If your septic tank inspection fails the test it will get expensive at this point. To have a new septic tank and drain field installed can cost anywhere from $6000 to $10,000 and this will not include repairing sprinkler systems that had to be removed or replacing sod over the damage areas of the yard.
DEAL KILLER #6: CHINESE DRYWALL
Chinese Dry was imported into Florida from around 2004-2008. If the home, you are purchasing, was built in those years you will want to make sure your home inspector is familiar with the signs of having Chinese Drywall. This stuff is “nasty”, it not only starts to smell bad, but it also will wreak havoc on electrical and plumbing systems as well as causing health issues. If the home you’re purchasing is determined to have Chinese Drywall immediately cancel the deal and be thankful you only spent money on a home inspection…and move on.
What it cost: Way more than you or anyone will want to spend!!
DEAL KILLER #7: YOU!
I bet you wander what that means?… Before you ever begin the home buying process and it is just a remote thought for the future, you will want to make sure not to get into any additional long term debt. By long term debt I mean like purchasing a new car, a new boat or buying anything on time. This will lower you credit score and may even stop you from getting a mortgage to purchase that new home! Make sure you continue to make timely payments and DO NOT close any credit cards; you can pay them down but do not close them. Also make sure you do not deposit any large amounts of cash that does not have a paper trail. (i.e a parent gives you some money for a down payment) Once you start the lending process your lender will guide you on exactly what you should and should not do during the home buying process.
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