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Ready to Sell? Is Your Home up to Code?

Both state and federal building codes exist, dictating standards for the home and geared toward the health and safety of occupants. As codes are many and continuously evolving, however, most homeowners remain in the dark as to whether or not their home is ‘up to code’. The vast majority are not. What does this mean for selling your home?

Six of one… Half a dozen of another…

You are not legally required to do anything to your home before you sell it, and can market your home ‘as is’. If homes were required to be brought entirely up to code prior to sale, chances are slim many real estate transactions would progress. However the condition of your home should factor into your asking price. If you want top dollar, with the least back-and-forth negotations, addressing issues in your home prior to sales might be right for you. If you don’t want to deal with the cost of repairs, and prefer to sell fast and for a bargain, you could discount the asking price of your home subsequent to necessary repairs.

There are, however, other reasons to bring your home up to code prior to sale:

  • Home inspection & caveats
    Most buyers opt for a home inspection prior to sale, to ensure they’re getting what they pay for, and as a potential ‘out’ in case anything untoward/unknown is unearthed. Buyers can either walk away, ask for a discount, or ask you to cover pre-sale repairs.
  • Financing issues
    Most financing terms are ‘subject to’ a home being in a certain condition. And stipulations are many - from GFCIs to stove/bath venting and porch rails - on commonly procured FHA and USDA loans.  Familiarizing yourself with minimum FHA and USDA property standards is a good place to start.
  • Insurance coverage
    Insurance premiums can be much higher – or coverage denied entirely – on homes with major issues, stalling financing.
  • Legal penalties
    If you knowingly sell a home that is damaged or unsafe without disclosing it as required by law, you could be held liable for any damages or medical bills incurred as a result. (Think: Leaks, mold, home electrical fires, etc.)

Nearly all home financing & insurance has electrical stipulations

As nearly all buyers require financing, you should consider addressing these common electrical safety issues before putting your home on the market:

  • Insufficient service
    The 60-amp service used in older homes is simply not enough to power the glut of large and small appliances in today’s homes. For more than 20 years, 200-amp/240-volt service has been the standard in single family homes. Most insurers require a minimum of 100-amp/240-volt service.
  • Old/Recalled breaker boxes
    Bulb-style breaker boxes, and service panels older than 30 years will have to go in order for buyers to qualify for financing and insurance in most home sales. These, and the plethora of defective boxes still in use today across the U.S., some installed as recently as the 90s, pose a huge safety risk.
  • Outdated wiring
    Aluminum wiring in home built in the 60-70s, non-metallic wiring from the 40-50s, and knob-and-tube wiring in pre-30s homes are well-known safety hazards. Several large insurance carriers refuse insurance on homes with knob-and-tube.
  • Splicing wires without a junction box
    A couple of wire nuts and electrical tape won’t cut it – all connections must be within approved boxes, visible, and accessible.
  • Ungrounded outlets
    An enormous safety hazard, without proper grounding, electrical excesses end up discharged into expensive devices – or you.
  • Missing GFCIs
    Inexpensive GFCIs are necessary on all outlets in high-moisture areas (bath, kitchen, with dishwashers, laundry/utility, unfinished crawlspaces/basements, poolside, outside) to prevent shock. Bonus: They also work/improve safety on ungrounded outlets.
  • Missing AFCIs
    Required in all 50 states, AFCIs act as a circuit breaker that disconnect in the event of a dangerous arc.

Are you prepared to put your home on the market? Mr. Electric is here to help. Contact us for your electrical safety inspection and uncover code issues in your home today.

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This blog is made available by Mr. Electric for educational purposes only to give the reader general information and a general understanding on the specific subject above. The blog should not be used as a substitute for a licensed electrical professional in your state or region. Check with city and state laws before performing any household project.