Real Estate Curve

The day that you sign the papers finalizing the purchase or sale of your home should be a time for celebration. Arriving with unresolved issues and needing to work things out at the last minute can turn what should be a happy occasion into one that feels tense and adversarial.

Try to make sure that all details are taken care of in advance. If there is a problem (perhaps agreed upon repairs are not finished) let your Realtor® know in advance so there is time to deal with things before arriving at the closing table.

It is much better to advise your Realtor® of any problems that you may anticipate, even if they seem minor, than to allow a small problem to escalate to a potential deal breaker. A “stitch in time” may save you nine!

When you arrive to sign documents it is not uncommon to be a bit nervous. At times you may be dealing with a classic case of “buyers remorse”. Having this remorse is much like having the jitters on your wedding day – they are both uncomfortable feelings, but seem to go with the territory when we make major life decisions.

You may just be tempted to sign everything put in front of you but please take the time to check the accuracy of all details. These papers are frequently filled out under time constraints and it is possible for honest errors to be made in any area. The legal address of your new home may be wrong – or perhaps your name is spelled wrong.

Any errors can usually be sorted out after the fact but that could prove costly. Realize that when you sign these documents you are agreeing to all that they say.

Refer to the advice given in the FAQ “Be Prepared For the Closing” as to how to lessen any anxiety at the document signing. Do not hesitate to ask any questions that you may have about the closing documents.

Now that you are at the final step in acquiring your new home, make sure the details are correct. After all, finding out we mistakenly contracted to buy the wrong house would be like waking up married to the wrong person!

It is hard to believe, but it actually is possible for someone to put a lien against your property without you being aware of it. If a title search turns up a lien and you are the purchaser, don’t automatically assume that the seller knew about it and was being underhanded.

In some areas, in the past (hopefully it is not still going on!), notice of a small claims action filed against you would not in fact be delivered to you as required by law. It would be just thrown in the garbage – delivered via “sewer service”. You would not show up in court, the complainant would automatically win, and a judgement could be filed against your home.

In the case of a legitimate lien, you will have to pay it in order to have it signed off. If you are disputing the validity of the lien, you will most likely need an attorney’s help. You may also discover liens registered by heirs or ex-spouses of a former owner of the house. You will need to have these people, or if necessary, the executor of their estate, sign off on the lien.

If a hold has been put on by a local government body due to noncompliance with some ordinance you will generally have no option but to bring the problem into compliance before you can sell.

When you close a deal to buy a house you will arrive and a pile of documents will be put in front of you. No matter where in the country you purchase a home there are numerous documents to sign.

The way in which you handle signing these documents is governed by both your past experience and personality. If you are familiar and comfortable with signing complex legal documents, and can read rapidly, you will be comfortable dealing with the closing – you most likely don’t even need to read further here!

If purchasing a home and dealing with documents is new to you, you may want to do some advance preparation. Most of the writing on these documents is standard form (sometimes called boilerplate) and if you want to read all the writing on each page before you sign you will be sitting reading for a long time.

In order to avoid making the signing a lengthy process for all concerned, you can ask for copies of the standard forms in advance and read them at your leisure. You can then ask for help in clarifying anything that you don’t understand. At the signing you will just need to go over the details of your deal that are filled in on these standard forms.

So, if you’re a bit unsettled about dealing with documents – ask for copies of the forms and consult with your Realtor® or attorney before the closing. Signing the document for the purchase of your new home should be a happy occasion – not an intimidating one!

There’s hardly a perfect home, a good engineer will always find some defects but you need to weigh the positives against the negatives. Remember, every deal is different, every deal is negotiable, there are many factors to consider, and a lot depends upon whether the real estate market is currently a buyers or sellers market. Some defects, such as a termite infestation, have historically been the seller’s responsibility in real property transactions. The bottom line is that it can’t hurt to negotiate for a better sale price on the home based upon the defects uncovered by the engineer.

Your offer to purchase should always be subject to inspection of the premises by a professional home inspector who is hired by you to present an independent, unbiased opinion of the property’s structural health.

Their inspection should cover all parts of the structure normally accessible, including the roof, gutters, crawl space, attic and built-in cupboards and closets. They should check visible plumbing, electrical and heating system components and include any outside attachments such as patios, decks and the like.

Outside yard areas and fences are included, as well as the garage and any other outbuildings or structure that forms a part of the purchase. The inspection should not alter the structure to allow access and the position of furniture or personal belongings should remain untouched.

The inspection report will offer the inspector’s professional opinion of the property’s structural soundness, but will not include a recommendation for or against purchase, an estimate of repair/renovation costs, or confirm adherence to building code regulations.

There are different types of inspections and inspectors. You may require an inspector to inspect merely the building itself, or the scope of inspection may go far beyond the structure and integrity of the building.

You may want reassurance from an environmental specialist. In some locations there may be concerns about the house being built over a fault line or about the purity and amount of water available, or general contamination by radon, lead (either industrial waste or contained in peeling paint), asbestos or toxic molds.

The decision of what type of specialized inspector you might wish to hire will vary from location to location. Your Realtor is in a good position to know of any problems that have turned up in other sales in the area so be sure to ask if they would recommend any particular type of inspection.

Your own pre-purchase inspection looks good and you think you’re ready to buy, but you need a professional opinion as well. Structural inspection by a qualified expert is crucial to avoid nasty surprises after the sale.

The structural inspection examines a home from top to bottom: wiring, plumbing, heating/cooling systems, roof, gutters, basement and foundation. All are examined and are the nuts and bolts of the report.

Accompanying the inspector during their job will be an opportunity to locate water shut-off points, fuse panels, and access doors and so on. The report itself will be important in forming a long-term plan for preventative maintenance, and a budget for repair and/or replacement of major appliances and structural components.

This report could form part of your offer to purchase and your Realtor® will have a list of qualified firms who can do the job for you. Their bill for the service is money well spent to insure against disappointment in what may well be the most important purchase of your life.

It would be very unusual for an offer to be made on any building without an inspection clause. A structural inspection will advise the buyers as to the condition of the structure and all integral parts of that structure. This would include plumbing and electrical systems.

The inspector will not give the house a “pass” or “fail” grade. They will give the buyers a written report detailing what has been found. The buyers can then anticipate any expenditure they may need to make on the building. If the inspector has found a few minor problems the buyers may just go ahead with the deal as written.

If the inspection turns up more serious defects the deal may not go through or the buyers could possibly want to renegotiate their offer to reflect the cost of effecting these repairs.

Your Realtors® will help both parties renegotiate the deal if the structural inspection warrants it.

Prospective buyers of your home will want to know that the structure is in good repair and that the plumbing, wiring and so on are functioning properly.

They’ll want a pre-purchase inspection by an unbiased expert that they commission to assure them that this is so and provision for it to be carried out is normally stipulated as part of the offer.

It would be well to fix anything you know about before you list the property. A roof that leaks in wet weather, faulty plumbing or appliances that don’t work properly are things that you will be aware of and can take care of at once.

But being confronted by a lengthy list of items brought to light by the inspection, the buyers may decide against proceeding with the purchase. This is doubly true if your listing is competing against new construction in the area.

Since the money will have to be spent anyway, doing the repairs in advance will insure that the sale proceeds smoothly, without maintenance snags.

As a matter of course buyers will commonly add a contingency clause to their offer that allows them to bring in a professional home inspector who will subject the structure and its systems to a thorough inspection.

Defects found in the process will be added to a list of repairs that they will often pass on to you for attention before the sale can go forward. The list may include items that the buyer would like to have done, but which you feel is beyond your responsibility.

The contract usually obligates you to ensure that the home is structurally sound, with all systems, and appliances in working order, but unreasonable demands such a new stove, or replacement of the garage roof may be more than you want to do. You may refuse items of this nature, but risk losing the sale as a result. Your agent will be able to help you judge how far to go in this regard.

Agreed upon repairs should be handled as quickly as possible by licensed, reputable contractors and copies of receipts for work performed passed on to the buyer, so that the sale may proceed.

When you hire a professional inspector to examine a house, you will, in most cases, be asked to sign a document. That document will contain a description of the scope of the inspection and also have a disclaimer that is intended to relieve the inspector and/or his company for any liability if he misses a defect.

Read the description of the scope of the examination and make sure it covers everything you wish checked. There is no point in hiring an inspector largely because you are concerned about hidden dry rot if he does not check for that! Make sure that everything you are specifically concerned with is mentioned as part of the scope of inspection.

The disclaimer clause may indeed protect the Inspection Company if the inspector misses a hidden defect.However, if something obvious was missed, it was part of the stated scope of inspection, and there was clearly negligence on the part of the inspector, it is unlikely that the disclaimer will offer legal protection to the company.

If you wish to claim damages for a missed defect, approach the Inspection Company before you spend money on legal help. The company may be willing to make reparation.

Basically, there are two types of buyers out there, the ones who think that a Realtors® job is to weed through all the houses that are not in your price range, are too big and need too much upkeep, or just not what they are looking for in a home. The second type of buyers want to see absolutely every house on the market for fear of missing out on their dream home.If you have open communication with your Realtor®, then you shouldn’t have to go out and look at all the homes on the market. After discussing all your concerns and points of interest in purchasing a home with your Realtor®, and if they’ve listened carefully to you, giving feedback and making suggestions, then they should be able to compose a good list of homes that fit your needs and pocket book.This is the only type of buyer that there should be. A wise one with a good Realtor® on their side to offer guidance and back up their concerns with potential sellers.

Before you start actually going out and looking at homes, it is a good idea to determine what you can afford. It is a disappointing experience to fall in love with a house only to find out that your lender will not approve you for the amount of money you need. It is far better to know in advance what price range of houses to look at.

The first step in determining how much you can afford to spend is sitting down and taking a look at your income and expenses. As a rule of thumb, your monthly housing cost should not be above about 28% of your pretax income. You will then need to factor in the cost of any other fixed long term monthly payments that you have.

Ideally the combination of housing and payment costs should not be higher than 35% of your monthly income. Any lender you approach will want to assure themselves that any mortgage they approve for you will be within these guidelines. Insured loans may allow you more latitude in these percentages.

Once you know how much you can afford in monthly payments ask your Realtor® to calculate approximately how large a mortgage that payment would service. Determine how much money you will use as a down payment (don’t use all your cash for the down payment, you will need to pay some closing costs). Add that down payment and mortgage amount together and you will know what price range you are looking at.

The choice of whether to buy a new or an older home tends to be swayed by two very diverse considerations – emotions and finances.

Some of us love older homes with their sense of history, charm and character and others are only truly happy with something that is brand new and has all the latest conveniences. No advice from outside will sway us from our emotional preferences and we should honor them. If this is to be your home, it should be the type of house you are most comfortable in.

If, on the other hand, you are looking at the choice of older versus newer with your primary motivation being financial, there are a few things to consider. New homes typically have lower maintenance costs, but that is frequently balanced by a higher purchase price.

Of course, it is not just the costs of repairs and maintenance that we tend to look at but also the aggravation factor of dealing with them. Older homes can be a source of pride and joy for those of us who are handy and love to restore them but they can be a nightmare for those not so inclined.

New houses and very charming well built and maintained older homes tend to hold their value better than those houses that are neither new and convenient nor old and charming. Utility costs are one financial concern that can vary dramatically. Unless an older home has had insulation added to it at some point in its history, you can expect to pay much higher utility costs in an older home.

Ask your Realtor® how much the present owners are paying for their utilities if you are looking at an older home.