Arizona Divorce | Why are home inspections important? What is house due diligence?
In a normal home buying process, the home inspection, which is performed by a licensed home inspector is how a prudent home buyer goes about making sure the purchase of a particular home is a good idea.
Every house will have its problems, but it is essential to identify the problems before closing or you may end up making a very costly mistake.
Home Inspections Are Necessary Because of Complacency
When people live in a house for many years they can become complacent in regards to the maintenance of their home.
Most people have a list of things that ‘need to be repaired’, but for various reasons the repairs get placed on the back burner. Does this sound familiar?
These needed repairs are one of the things that take away from the equity in a house, and it’s the equity that is divided by divorcing spouses in a divorce situation.
Having a home inspection is just one of the many House Due Diligence items that should be addressed during the divorce, but there are many others such as:
A title search: The title search shows the true ownership of the property.
A lien search: A lien search can show you how many mortgages, mechanics liens or tax liens are on the house.
HOA search: A check with the HOA can show potential HOA special assessments or unpaid assessments that must be cleared prior to the house changing hands.
A title company can help you with these searches for a fee.
In a divorce situation, less than 3% of the couples who are divorcing will go through the House Due Diligence process.
This can be bad news for the couple in an equitable split of the assets and debts.
Here’s an Example of What Can Go Wrong
A husband and wife were divorcing. The wife requested to keep the marital home, she and her husband had lived in for more than 15 years.
Over the last decade, the two had become rather complacent and did not maintain the home properly.
During the divorce process, the wife did not have any home inspections performed stating that she knew the house very well. The wife received the marital home in the divorce settlement.
Five weeks after the settlement was finalized a major storm revealed the roof of the house had developed leaks, and the leaks allowed mold to develop behind the walls.
Not only did the woman need to replace the roof, but she also had a mold abatement issue that had to be addressed. The cost to make the repairs? $32,000.
Proper House Due Diligence could have revealed the needed repairs, and the repairs could have been negotiated in the divorce.
As it turned out, the problems were discovered once the house was solely in the hands of the former wife, and the repairs were completely her responsibility.
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What I Do:
1. I help people who own a home together, and plan to separate and/or divorce, avoid making very expensive and long-lasting mistakes with their co-owned home.
2. Although my information can help anyone who plans to divorce, it is best suited for those who are not contesting the divorce (too much) and are as amicable as possible.
How Do I Do This?
1. I'll consult with my clients and compassionately help them completely understand all of their options with the home.
2. I'll explain the option of one person keeping the home and refinancing the home, so the former spouse is no longer on the mortgage loan.
3. I'll explain the option of selling the home and splitting the equity, and then each person having the option to buy a new home on their own.
4. I'll explain why an appraisal-minus-the-mortgage does not equal true equity, and why a home inspection (sometimes called house due diligence) is very important at this time.
5. I'll explain to my clients how their decisions with respect to the home will impact their quality of life for many years to come, positively or negatively.
6. I'll explain how the information I can provide will help my clients make better decisions for their future.
7. I'll explain how my clients can avoid making expensive and long-lasting mistakes.
8. I'll introduce my clients to other professionals, such as mortgage professionals who can better explain the refinancing and new purchase options.
9. I'll explain my discounted commission rates that I offer my clients if they choose to sell the house and choose me as their REALTOR®.