Turnkey properties are in high-demand in the city. But how do you verify the quality of a renovation in a market where unconditional offers are the norm and home inspections feel like a luxury? It’s a tough balance between protecting yourself and remaining competitive. When you are interested in purchasing a newly renovated home, there are several potential concerns. Here’s a story that highlights one of the many things to look out for:
The Story
John and Rachel found their perfect home. A beautiful classic Victorian semi-detached, renovated inside – top to bottom! The perfect juxtaposition of a traditional exterior with shiny new modern interior. There were multiple offers, so they decided not to include a home inspection to remain competitive (When you are competing against other potential buyers, the seller’s often lean towards the cleanest deal. If the offering price is similar, this means the deal with the fewest or no conditions).
The Problem
A home inspection post-closing reveals a new electrical panel, but knob and tube wiring in most of the house. This is an older form of electrical and poses several problems including an increased risk of fire. Unfortunately, John and Rachel’s insurance company, like many others, will not cover homes with this type of wiring. The couple must now replace the remaining knob and tube.
The Solution
Make sure to work with an agent who does their due diligence. They should ensure that all renovations that required permits have been completed and closed. A conscientious agent will research the history of the property so they can check how quickly renovations were completed and if proper channels were followed. If there have been improvements made to the property, ask for back up documentation. For example, an ESA certification will show that the electrical work was done correctly and to code. What if you are in a situation where you are competing and don’t want to include a home inspection condition as a part of your offer? Consider having an inspection done ahead of offer night. Ensure that your inspector is qualified and has a solid reputation. It pays to work with a professional who goes above and beyond to uncover potential issues and costly surprises.
