Perspective Newsletter
Spring 2015
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Tipoffs to trouble for desperate homebuyers

​​​You jockeyed for a spot on the high school track team. You crammed for the SAT to eke out a few extra points. You beat who-knows-how-many applicants for your first real job.

But you never thought you'd have to "compete" to spend hundreds of thousands of dollars on a house. That's the reality for a growing number of Northwest homebuyers.

In Seattle, 75% of homes receive multiple offers, up from 55% in 2012. And bidding wars are now the norm in both Seattle and Portland – affecting 78% and 68.5% of home sales, respectively – according to real estate brokerage Redfin.

"You're sort of in this pressure cooker where time is ticking and you think things are only going to get more expensive," a single-dad homebuyer recently told The Seattle Times. "You have this sense of urgency."

So to get an edge, a lot of homebuyers are waiving home inspections, the traditional peace-of-mind escape hatch that lets buyers out of the deal if their dream home – to the practiced eye of a certified inspector – looks more like a money pit.

A risky, but understandable, roll of the dice in this superheated housing market.

We asked our underwriters (who inspect thousands of homes each year) to share their top 10 tipoffs to trouble for homebuyers forced to play do-it-yourself inspector:

1. Roofs. Signs of disrepair or neglect include moss; curled shingles; and damaged, missing, or poorly installed flashing. A failing roof could be a big and unexpected expense and a precursor to interior water damage.

2. Concrete and settling. Do you see widened cracks in the foundation? Uneven or broken concrete on driveways or walkways? Doors and windows that fit poorly in their frames? All can signal settling or earth movement.

3. Electrical. Look for homes with circuit-breakers (rather than screw-in fuses) and grounded, three-hole outlets, which indicate the electrical system has been updated. Older fuse-type panels might be overloaded by today's electrical appliances.

4. Plumbing. Look for newer plastic or copper supply and drain lines instead of old galvanized ones, and check for rust in sinks or tubs. It could indicate the pipes have lots of corrosion built up inside them. Also, check the age of the hot water tank. The older the tank, the more likely it is to leak, and it may need to be replaced. Water suddenly bursting from plumbing systems or appliances is the leading cause of claims for PEMCO (long-term water leaks may be excluded from coverage).

5. Heating. Not only is heating equipment a top cause of home fires in the United States, it's a potential source of carbon monoxide, which is a deadly, colorless, odorless gas. Whatever the heat source, the home should have adequate heat to avoid using portable heaters. Be sure to ask for the heating system's maintenance and operating manual, and look for records showing it was serviced within the past year by a qualified contractor. Make sure to include solid-fuel appliances as well. ​If the home is heated with natural gas, find out how recently the gas lines have been updated. If it's heated with oil, be aware the tanks can leak, creating an environmental liability concern.​

6. Landscaping. Well-maintained landscaping often correlates with the home's interior condition. Shoddy yard repair can indicate other home maintenance has been let go, too.

7. Soil stability. Is the house on a slope or near one? Trees and shrubbery can help prevent erosion. Not only do plants draw moisture out of the soil, but their root structures help bind it. Bare dirt on steep slopes may signal erosion.

8. Drainage. Warning signs include water in crawl spaces or in basements. Excess water can contribute to soil instability and mold.

9. Mold. Check around showers and toilets for mold stains and wall discoloration. Compromised tile and grout in showers and tub enclosures can allow water penetration into the walls. Often this leads to expensive repairs for rot in the structural members behind walls and under floors. Mold can be a harmless nuisance, or it could be a health hazard. Toxic mold and mildew have been linked to a growing number of illnesses.

10. Pools. If the house has a pool or hot tub, make sure it's protected from unauthorized access, especially by children. Unenclosed pools and hot tubs are a liability hazard and affect eligibility for insurance. ​