Buyer clients of mine were advised this week by their lender that they did not need to do a pre-offer home inspection on a foreclosure listing because, since they are getting a VA loan, the inspection is automatically part of what they get. Voila! Save money!

Bad lender!! Unfortunately, he doesn't quite have the whole picture.

When you get either a VA or FHA mortgage, as part of the appraisal, there is something of an inspection done. What these entities are doing is making sure there are no significant issues with the home that will cause the buyer to have to come up with money for repairs in the first year or two of home ownership. It's a worthy goal. But the inspection has gotten increasingly cursory over the years. And, things that the VA or FHA consider to be a problem, may in fact be things that are not a problem at all. (I've seen deals fall apart over these things!)

A real home inspection takes around 3 hours, sometimes longer, depending on the home. Each system will be tested. The home will be evaluated for water issues. The inspector will go into the attic to look for leaks. Better yet, the potential buyer gets a better understanding of what they're buying, how the systems work and what they'll need to do to maintain their home in good condition.

The VA or FHA appraisal doesn't come close to performing any of these functions.

But there's an even bigger problem here. The lender assured my clients that if they find anything significant, they'll simply increase the size of the loan so they can immediately have it fixed. So, no worries about having to walk away from the contract and lose their earnest money deposit to the bank.

So, even if the appraisal says the home is worth only the contract price and the place needs a brand new roof, no problem loaning them the extra money? A lending institution, given our current situation is willing to loan over 100% of the value of the property to first time home buyers? (Yes, this is going to be a no money down transaction.) And, they'll say this up front without even limiting the amount? If the required repairs bring that number to 110% of the value of the home, are they still going to approve the loan?

I think the answer is "no" and I think they've badly mislead my clients. Lending institutions should do what they do best, make lending decision. (OK, that may not be what most of them do best any more but we're giving them the benefit of the doubt!)

Lending institutions should not be offering advice that puts my clients at risk for losing their earnest money.

I was showing a home to a client a couple of days ago. We had just finished and were getting in our cars when someone drove up. He got out of his car and asked if I was the real estate agent. I told him I was "a" real estate agent, but not the listing agent for this property.

This gentleman went on to explain that he's been calling and leaving messages for the listing agent for months, trying to get in to see the house. All his calls have gone unreturned.

Have I mentioned that this house has been for sale for more than 450 days?

Real estate agents get discouraged too. I understand that. But a potential buyer who is this determined would certainly seem worthy of a returned phone call.

I wonder if the owner knows there's a potential buyer who's having trouble getting to see the property.

By the way, this is one more reason (if you needed one) to never, never call the listing agent on a property!

Recently a home inspector commented to me that in many cases he though that modular homes now had superior quality to traditional stick-built homes. That comment surprised me! And I'm sure I'm not the only one. So I've been doing some research on what's new with modular homes and how they compare to their stick-built predecessors.

First of all, I should say that modular homes are NOT the same thing as manufactured or mobile homes. Modular homes are homes built using a system according to the Modular Building Systems Association. Modular homes come in all shapes and sizes including beautiful two story, 3000 square foot colonials! To most consumers driving down the road, you'd never know the difference between the modular and the stick-built homes.

Modular homes have a number of advantages. One obvious one is the time involved. These homes are built in sections in a factory and then shipped to the home site and assembled there. This means that the entire factory process is unaffected by weather and many of the other delays so common on building sites. And despite most of us thinking assembly line means cookie cutter sameness, modular homes are highly customizable. The average time from beginning to end of the process for a modular home is roughly three months. The average time from beginning to end for a home built entirely on-site is 6 months to a year.

Modular homes may also be significantly stronger than stick-built homes. They are typically built with 20-30 percent more materials in order to withstand transport from the factory to the site. A FEMA study following Hurricane Andrew in 1992 found that modular homes in Dade County, Florida stood up to the winds better than stick-built homes.

A side note here: Having lived in Miami when Andrew hit, I would mention that which builder builds a home has a tremendous amount to do with how they survive in a hurricane. Habitat for Humanity homes fared much better than most builders!

The use of more materials typically also means greater energy efficiency. As energy costs, in terms of dollars, environment and national security continue to be an issue, I believe we'll see more modular homes.  Right now modular homes account for only about 7 to 8 percent of all new home sales.

Building the sections of the home in a factory can also be a big help in reducing the cost. This can be money in your pocket. I've seen estimates anywhere from 5 to 25 percent savings. Obviously that's going to vary based on both the manufacturer and the design involved.

If you're thinking about buying land and building your own home, modular may be worth a look. If you live in a modular home now or have in the past, what have your experiences been?