Ingredients of a winning contract for homebuyers.
By Mark Nash
Homebuyers should take the time to research and gather information before presenting a purchase contract. Property sellers will be receptive to your proposal when you present them with the customary supporting documents with the contract. Real estate contracts contain many blanks that can be balanced against each other adding up to a strong offer. Knowing which supporting information and the typical numbers for the blanks will save you time and could save you dollars.
Mark Nash author of 1001 Tips for BUying and Selling a Home offers you the ingredients for constructing a purchase contract.
-Use an approved real estate contract by your state real estate attorney association or local Board of Realtors®.
-Retain an attorney to review all real estate contracts before they are submitted and after acceptance.
-Real estate contract. A binding agreement between buyer and seller. It consists of an offer and an acceptance as well as consideration (i.e. money).
-Acceptance. Agreement by the parties of the terms of a contract.
-Contract length. Research customary contract lengths, the standard is 45 days from contract to closing.
-Research sold comparables properties to the one you are writing a contract for.
-Comparable. Closed prices for similar homes in age, condition, location and size.
-Price. Study average sold prices as a percentage of lists in the last six months.
-Low-ball offers. Offer over 87% of list if you serious, otherwise you will alienate the seller early on in negotiations.
-Counteroffer(s). The response to an offer or a bid by the seller or buyer after the original offer or bid. Request all counteroffers to be in writing.
-Apply for highest level of mortgage commitment to present with contract.
-Mortgage Commitment. A document by a mortgage lender that commits the lender to providing a loan at agreed terms and conditions.
-Mortgage term, rate and amount. Your strongest down payment will provide negotiating leverage.
-Cash offers in lieu of mortgage financing should be confirmed with a letter from your financial institution stating funds are on deposit to close the contract.
-Federal law requires Lead-Based Paint Hazard disclosures.
-Lead-Based Hazard. A disclosure of reports or knowledge of Lead-Based Hazards. Buildings built after 1978 do not present Lead-Based Hazards.
-Read Protect Your Family From Lead in Your Home by the US EPA.
-Real property disclosures. Written statements by the seller(s) of a property disclosing any known defects.
-Local disclosures. Local requirements of disclosure that the seller provides and the buyer acknowledges, such as certificates of occupancy.
-W-9 form. An IRS form requesting taxpayer identification and certification numbers of buyers to receive interest on earnest money from delivery to closing.
-Subject to appraisal. All contracts should be subject to an appraisal at a minimum of contract price.
-Appraisal. An objective third parties opinion of value by a licensed or certified appraiser.
-Earnest money deposit. Money given to the seller at the time the offer is made as a sign of the buyer’s good faith.
-Research customary earnest money deposits as they vary. The larger the deposit, the increased motivation you show to perform the contract.
-Refund of earnest money deposits. Contracts should provide for refund of the entire earnest money deposit within agreed contingency periods.
-Attorney approval period. Your attorney reviews and makes changes to the contract, typically 5-7 business days.
-Property inspection period. The right under a contract for the buyer at their expense to discover the actual condition of the property. This period typically runs 5-7 business days.
-Well and septic inspections. These are independent of structural and mechanical inspections.
-Timelines for contingencies run concurrently.
-Contingency. A provision in a contract requiring certain acts to be completed before the contract is binding.
-Closing/ escrow date. The date of the end of the transaction process where the deed is delivered, documents are signed, and funds are dispersed.
-Possession date. The date agreed by contract when the buyer can occupy the property.
-Final walk-through. A property tour before closing or escrow that permits the buyers one final verification of condition, agreed repairs and personal property.
-Tax pro-rations. The amount of credit given to buyers at closing for unpaid property taxes, when taxes are paid in arrears. Pro rations should always be more than 100 %.
-Personal property. List and initial all personal property included with the sal, such as air-conditioners, appliances, and playground equipment.
-Home sale contingency. The contract is contingent on the sales of the buyer’s property.
-Show motivation when including a home sale contingency by having your current property on market.
-Home closing contingency. The contract is contingent only on the successful closing of an existing real estate contract.
-Letter to sellers. The best way for you to personalize your interest in a property and present your family to the sellers.
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Home buyers and sellers have agency relationships realty agents.
By Mark Nash
One of the most under-reported topics in real estate are the relationships real estate consumers have with real estate agents. Known as agency, the type of agency relationship you have with a real estate professional could impact the purchase or sale of a home. Mark Nash author of 1001 Tips for Buying and Selling a Home shares the ins' and outs of agency in residential real estate.
-Agency. The relationship between someone who is licensed as a real estate broker or salesperson and the person he or she represents, who is the principal. State laws vary on agency relationships, verify in your state what and how agency is defined.
-Fiduciary. Agents under agency laws have a relationship with the principal or client based on trust and confidence.
-Establishing an agency relationship. Written or oral (depending on state law) where brokerage services are provided to a buyer, renter, or seller in return for compensation. In some situations an implied agency relationship is created, through mutual consent and actions. You attend an open house and the host who is the listing agent offers to show you other properties and you consent.
-Dual agency. You are shown a home you are interested in by the listing agent, who has a brokerage agreement and an agency relationship with the seller. You decided to purchase the home and use the listing agent as your representative. This agent must disclose to you that they are now a dual agent, representing both the seller and buyer in the transaction. Not recommended. Undisclosed dual agency is against the law.
-Disclosure of agency by real estate agents. Mandatory in all states. An agent must disclose who they have a fiduciary relationship with.
-Buyer agency. The formal or informal agency relationship between a buyer and an agent who has a fiduciary relationship to the buyer. Preferred.
-How buyers agents can be compensated. Either the buyer pays compensation to their agent or the seller can compensate the buyers agent. Even though the buyers agent has a fiduciary relationship with the buyer, the agent can still be compensated by the seller through the sellers agent.
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Tips for purchasing a vacation home.
Mark Nash
Investing in a vacation home might be for the pleasure you receive from it, than as a real estate investment. Second homes can bring enjoyment to you and your family, but buying at the right price and time, can make all the difference between profit and loss. Be sure to visit your proposed purchase destination both in-season and out-of-season. Many vacation spots are desolate off-peak.
It might be easy to buy the cheapest property as a second home, but good resale characteristics are what you should looking for. Buy a home with at least two bedrooms and two baths, people always have friends and family visiting their second home. Look for a good location, you'll enjoy it and so will buyers when you go to sell. Stay away from allot of fixing-up, many a second home owner burned out from all the work that a supposed "vacation home" created. Buy a property within an easy days commute to it. Remote locations that chew up travel time on vacations have limited appeal. ere are some additional tips:
-If the home is on a water well and septic, have them inspected by a professional.
-The best time to buy a vacation home is the first season after peak season. Many second home owners want to use it one-last-season, then sell and have the carrying costs. Inventories of resale homes are greatest off-season and at reduced prices.
-Find locations that offer long seasons for golfing, boating, and skiing. Some resorts have off-season alternative activities that can bring you back for a respite in slower times.
-Retiring down the road to your second home brings to mind some things you should consider. Are some of the or the lack of seasons that don't appeal to you? How is traffic in-season, you might have retired to get away from grid-lock, but very popular vacation and resort areas can have massive back-ups in season.
-You might enjoy renting your vacation home now, but when you retire will you want the transient nature that short-term rentals bring?
-Don't rely on seasonal rental to cover all your costs. Off-season may be too hot or rental rates drop so low, that the cleaning service, management fees eat up profits. Verify that any resort or condotel allows short-term rentals in season.
--Anticipate all the costs for renovation and refurnishing. Sometimes it might be cheaper to start over. or to buy new construction.
-Buying furnished vacation homes is typical. If you're going to rent your home, make sure the rental manager approves of the furniture you're buying with the property. Out-dated and well-worn furniture won't cut it today with savvy vacation renters.
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Majority start home search on Internet.
By Mark Nash
The availability of homes for sale on the Internet has exploded recently. National real estate websites sponsored by brokerages, trade associations, and newspapers provide real estate surfers with the majority of properties listed.
Anonymity and convenience of the Internet have changed how consumers begin their home search. Learning about a community and the historical financial data on comparable properties allows the consumer to drive their search before they contact a real estate agent. This shift from the real estate industry controlling information to consumer driven continues to force the industry to provide new value and business models for savvy Internet real estate consumers.
Fast Fact: How many homebuyers are using the Internet to find a home? According to the 2005 National Association of REALTORS® Profile of Home Buyers and Sellers, 79% of homebuyers used the Internet as an information source.
Real estate help desk. Dear Mark: While surfing real estate brokerage websites I found several properties that I wanted to tour. When I called the agents representing the properties to schedule appointments, they all were no longer available as they had been sold or closed. Is this bait and switch? Susan, Montclair, New Jersey
Dear Susan: Yes and no, depending on the brokerages intent with keeping closed or sold property listings on their website. Some real estate agents look for prospects to call on all listings despite their availability to acquire new clients. Some brokerages are slow at removing listings that are no longer available. Your best source to view available properties is at public pages of Multiple Listing Services or Realtor.com as their information is updated more frequently.
Quick Tip: Look for your real estate agent to have an e-PRO® designation. It certifies that they have completed a training program presented entirely online to certify real estate agents and brokers as Internet Professionals.
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By Mark Nash
For first time home buyers deciding to take the plunge and buying a home can be a tough decision. Especially in todays real estate market with prices flat or declining. Here are arguments for both renting and buying.
The pluses for renting versus owning:
- Monthly costs: Renting can be more cost-efficient than owning if utilities are included. The monthly cost of owning is usually more than renting after you total the cost of mortgage, maintenance, taxes, and utilities.
-Features: Some rental apartments offer amenities that are not found in smaller condo/co-op buildings or single-family houses such as 24-hour door attendant, dry cleaners, or a grocery store. Unless you purchase in a full-amenity building you will most likely have to go off-site for some services you are accustomed to having only an elevator ride away.
-Maintenance and repairs: Renting allows you the luxury of repairing or maintaining nothing; if the air-conditioner breaks you call the manager. With owning you have to either repair the air-conditioner yourself or locate, meet, and pay a repairperson.
-Mobility: Renting offers you the convenience of leaving your home when your lease expires. When owning you are tied to other persons’ timeline of moving when a buyer or a tenant agrees to a date, which might not fit your timeline.
The pluses for owning versus renting:
-Equity: Renting has no equity benefits. Owning provides a forced savings because part of each monthly payment is principal, which builds your equity. Potential property appreciation can also increase your equity. Note: If property values decrease in your market you could owe money when you sell.
-Control over your environment: A lease may not allow you to have pets, paint your walls red, or have a roommate. With owning you can choose a building or home that allows you to have pets, decorate to your taste, have roommates, or add a washer and dryer.
-Stability: Your landlord can increase your rent, sell the property, or convert your rental to condos and force you to move on short notice. With a fixed-rate mortgage, you can control your monthly housing expense and peace of mind that you can stay as long as you want.
-Tax benefits: Renting offers none. Owning allows you to deduct mortgage interest and home equity interest from your taxable income. Consult a tax professional for more information.
A quick apples-to-apples housing comparison:
-You pay $800 per month in rent for a two-bedroom house, which does not include heat or electricity.
-You purchase a home for $90,000 putting 10% as your down payment and borrowing $81,000.
-$81,000 at 7% interest equals a P and I payment of approximately $538.90.
-Property taxes are approximately 1.5% of purchase price ($90,000) which equals $1,350 ($112.50/month) plus $250 ($20.83/month) for homeowner’s insurance. $538.90 + $112.50 + $20.83 = $672.23.
-In this scenario, the mortgage payment is actually less than the rent.
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How home buyers can find the right neighborhood.
By Mark Nash
The ying of finding the right home needs to be balanced by the yang of locating the appropriate neighborhood for your needs. Home buyers can determine if the neighborhood fits their parameters by following these simple tips by Mark Nash author of four books including his latest 1001 Tips for Buying and Selling a Home and as a regular columnist for RealtyTimes.com.
-Drive through a neighborhood or community at different times of the day and night. In the morning when residents are going to school or work. During the day to see whether properties are maintained, including alleys. At night to check on traffic noise, parking availability, and lighting.
-Walk or bicycle through areas to get a slow look, include schools, playgrounds, and parks.
-Talk to local store and shop owners. They might offer a different perspective from home owners and could give you insight into future plans for commercial development.
-Determine if stores, shops, and restaurants are open late at night and first thing in the morning if you need to run out for a gallon of milk, fill a prescription or pick up a cup of coffee.
-Make a trial run between different establishments that you will use for services. Can you easily group errands or are providers spread out over a wide area?
-Attend school and village board meetings to understand what the local issues are.
-Visit the library to see whether their collection is thorough enough for your families needs. Read some issues of the local newspaper.
-Stop by the village hall and inquire about garbage and water rates, watering bans, street cleaning and snow emergencies. Will your car need a village sticker?
-Check out the hospital and emergency room, it's better to know before you have a need what kind of facilities and services are offered.
-Community funded park district and sports leagues can make a big difference. Locate the locate facility and see if offers programs and amenities your looking for.
-Inquire about public transportation. You might think you won't use it, but the day you're late for work and the car won't start you be looking for automobile alternatives. Pick up bus and train schedules and locate taxi stands, just in case you'll need them.
-Surf the Internet for community-related sites.
-Visit the police station and inquire about crime statistics and neighborhood watch groups. In some states, you may search online to learn whether a sex offender lives in a neighborhood or community.
-Don't ask local realty agents if a neighborhood is safe. It is a violation of Fair Housing Laws for real estate agents to make a judgment on the characteristics or demographics of a community, block, or neighborhood. This practice is steering and is considered discrimination.
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Protect yourself against identity theft when buying and selling a home.
By Mark Nash
Real estate transactions consist of mountains of paperwork. Loan applications, purchase contracts, credit reports, disclosures, mortgages, W-9 forms and HUD/RESPA statements. Many of these contain your social security number (SS#) and other vital information that could be stolen by one of the many people whose eyes it passes by. Factor in faxes and emails containing the information and it would be easy for your identity to be stolen when buying or selling a home. Mark Nash author of 1001 Tips for Buying and Selling a Home and a syndicated columnist for RealtyTimes.com offers tips on how to protect your identity in the purchase or sale of your home.
-Inquire all transaction participants if they have a Client Identity Protection Program (CIPP) in place. This can help insure that they have controls and procedures in place to curb the possibility of client identity and financial information being left in the path of identity lifters. Mortgage origination companies and loan processing departments, real estate brokerages, law firms, title and escrow companies should have document shredding policies, fax and email safeguards (you don't want your social security number sitting in a fax machine or email on unsecured systems). Determine how out-dated files are disposed of, they should be taken and shredded or burned by professional document disposal companies.
-Mortgage loan applications require a social security number to run a credit check. Never give your social security number over the phone, and if you have too, make sure that the person receiving it doesn't repeat it out load. Never send your SS# by email or fax. Ditto credit and debit card numbers.
-If you have pulled your own credit reports, be careful who you give them too. It's best to deliver them in person to the requester. Don't fax or email credit reports. Never give loan consultants password to your credit reports online.
-Real estate purchase contracts often have buyer and seller blanks for social security numbers. Limit your use of these. Offer to submit a separate IRS W-9 form to the closing department agent of the listing brokerage.
-W-9 forms. The Internal Revenue Service requires home buyers and sellers to complete a W-9 form. This Internal Revenue Service form requests taxpayer identification number and certification. Verify the security of all people holding this form. Write do not copy, fax or scan across the top and bottom.
-Do not place your social security number on the HUD or RESPA form. Only the closing, escrow or title agent needs to put their TIN or Tax identification number on the RESPA statement. HUD/RESPA (Housing and Urban Development/Real Estate Settlement Procedures Act): A document and statement that details all of the monies paid out and received at a real estate property closing.
-The most common way for your identity to be stolen is if your wallet is lost or stolen. Keep a close watch on it at all times.
-Shred all unsolicited credit-card offers in your name. Mailbox theft accounts for an increasing number of identity theft cases.
-Online theft has stabilized, but never respond to an email asking for personal financial information or account numbers, password and user names without verifying if it is legitimate first.
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Top Tips for First Time Home Buyers.
By Mark Nash
Buying your first home needn't be as daunting or as stressful as you think. The process is very much like a recipe for cooking. Adopting a pro-active perspective from the day you decide to buy a home until you walk out of closing or escrow can be the single largest decision you make that will impact your overall home buying experience. Mark Nash author of 1001 Tips for Buying and Selling a Home offers tips to simplify and focus while buying and looking for your first home.
-Hire a full time experienced real estate agent, that has been in the market for at least three years. Ask at the office or friends and relatives who they had a good experience with. Don't use the same agent that is representing the seller of the home you want to buy, this is known as dual agency, and it doesn't benefit anyone but the real estate agent.
-Get pre-qualified or pre-approved for a loan before you start your home search. Meeting with a mortgage lender will clarify how much your comfortable spending on a home. The rule of thumb is to keep your housing cost around one-third of your income.
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-Think about resale when buying. Off-beat locations such as busy streets, corner lots, noisy trains and jets will be more difficult to sell to choosy buyers. Buyers want quiet, middle of the block locations away from busy intersections and train tracks, both commuter and freight lines. You might get a discount when you buy for a second rate location, but it's one thing you'll never be able to improve.
-Don't test the waters with low-ball offers. Good try, but low-ball price offers do more to set up an adverse relationship between buyer and seller, which could cost the buyer more in the end. Don't start below ninety on a well priced property. Determine negotiating strategy before putting a low-ball to paper.
-If your buying a condo or co-op consider the management style of your potential HOA (Home Owners Association). How you HOA is managed is important and could impact your ownership experience. The management could be a professional property management company or self managed. Smaller HOA’s find self-managing the day-to-day operations more cost effective and hands on. Some potential buyer’s don’t like self managed associations because they feel it conflicts with why they are purchasing a property in a HOA, which is to compensate some one else to manage the day-to-day operations of the common elements.
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-Acquire a blank copy of the local real estate contract and review before you sign one. Most local real estate boards have a form contract that has blanks for contract price, terms and conditions. You will feel more confident if you review a real estate contract long before you are asked to sign one. Ask your real estate agent for a blank contract after your first meeting. If you have questions about the contract ask your attorney to review it with you. Review required disclosures too before signing them.
-Don't skip performing a home inspection. Cracked heat exchangers on furnaces indicate that it's a health issue and time for a new furnace. Home builders, owners and developers can put in lower-quality and under-sized furnaces that can have prematurely cracked or damaged heat exchangers. If your home inspector finds one, you better plan on replacing the furnace. From a safety standpoint cracked heat exchangers emit dangerous gases into a home.
-Assess your situation before buying a new construction home. New homes offer buyers the flexibility of changing floor plans, choosing finishes and defining a brand new space. Satisfied new construction buyers are everywhere, but their satisfaction comes from a reputable builder/developer, strong warranties and the knowledge that they won’t have to compete with the developer when they sell their home.
Home buyers looking to purchase in over-heated markets should consider how much current prices have risen over the last year, two-years and five years. Contrast those rates with the potential pool of buyers to pay future prices along the same rates in the same markets. Will the local economy and personal income increases support spiraling home prices? Here’s the bottom-line, are you willing to pay your projected appreciated sale price when you go to sell?
-Create independent lists of must-have home features and compare with whom ever you will buying a home with. It can be difficult for newlyweds to find a starting point for joint home parameters. I suggest to my clients each list the top ten features they want in their next home and compare with their spouse. You should have at least five matches and less than five requires a discussion between you before you consider even looking at homes.
- Plan ahead for your move five weeks before moving day. Begin pricing and cleaning items for garage sale. Register children in new school. Verify with insurance agent that your possessions will be covered during your move. Obtain new homeowners and automobile insurance in your destination community.
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Stigmatized homes can be a mystery to homebuyers.
By Mark Nash
You might never know if that pretty house that you feel in love with was the scene of a gruesome murder or the laboratory of a methamphetamine manufacturer. State laws vary for requiring the seller of a home to disclose to buyers if a property has "psychologically disturbing history" or stigmatized. Ghosts, occupied by someone HIV-postive, murder and drug centers top the most common home histories that disturb buyers. Mark Nash author of 1001 Tips for Buying and Selling a Home offers tips on how to deal with stigmatized properties.
-Be forewarned that at least one perceived stigmatized property can't be disclosed under Federal law, those persons with AIDS or are HIV positive are protected under Federal Fair Housing Laws from disclosing their HIV status.
-Homes that have been used as a methamphetamine lab can be tested by a certified industrial hygienist for traces of the drug. If the drug does exist it can be remediated by a licensed environmental hazard professional. If you suspect illegal drug manufacture in a home you are interested in purchasing, right a clause in the contract to include an inspection for methamphetamine.
-Murders and mayhem in a home can be unsettling to home buyers. Laws vary be state as to their disclosure and the length of time this information needs to be disclosed, after the incident. It doesn't hurt to ask realty agents if any murders have taken place in a home you want to buy, but you might not get the truth as it might not be required by law. Do an Internet search with the names of the occupants or call the police department and review crime records and reports.
-Ghosts can be a turn-off to some buyers, while others are attracted to their mystery and occurences. Home sellers should be careful about disclosing the known presence of ghosts, you might be held liable if they decide to move-on after your gone. Buyers might be interested in your home because of ghosts and how can you assure buyers that they will remain? If you like ghosts and want to follow their history in a home, go to the local library and see if you can find a documents of them in newspapers or public records.
-When disclosure is necessary under state law, have both the buyer and seller sign a disclosure statement, the seller serving notice of the stigma and the buyer receiving the notice. Don't make claims or guarantees that can't be proven. Always consult a real estate attorney when drafting or signing a home purchase contract.
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Homebuyers should steer clear of white elephant properties.
By Mark Nash
First time homebuyers need to know what type of properties might speak to them but not to the majority of homebuyers when they need to sell. According to industry sources the average homebuyer stays in their first home just shy of six years. Buying a white elephant can be a costly mistake, both in selling price and long market times to find the buyer willing to take a chance on a home that doesn't fit the market.
Features, location and style can create a white elephant property. Mark Nash author of 1001 Tips for Buying and Selling a Home updates homebuyers on what to stay away from when looking for a home. Understanding that all homes are not created equal, Nash outlines what the top elephants are in today's market.
-Homes that back up or look onto cemeteries. Many homebuyers are very cautious about purchasing a home that features a view of a cemetery. Cultural customs and plain old creepiness keep buyers away from homes that overlook headstones and spooky mausoleums.
-Off-beat locations such as busy streets, corner lots, noisy trains and jets will be more difficult to sell to choosy buyers. Buyers want quiet, middle of the block locations away from busy intersections and train tracks, both commuter and freight lines. You might get a discount when you buy for a second rate location, but it's one thing you'll never be able to improve.
-Buy properties that stay in demand. Many smaller homes will fit your budget, but determine if they are in demand by buyers. One bedrooms have a limited audience. Buying a contemporary ( even if it's a steal) in a neighborhood of colonials will be a tough sell.
-Basement bathrooms and bedrooms don't have the same appeal as if they are above grade. Some buyers have security issues as well for garden level condos.
-Tuck under garages. Even though news reports on fires originating in automobiles are low, many homebuyers don't like the idea of sleeping over garages filled with gasoline.
-Mansard roofs. Popular in the the 1970's this roof style is a hard sell with buyers today. Often seen on a second floor of a two story home, the dormer windows protruding from a sloped roof say ugly to homebuyers.
-In-ground swimming pools in northern climates. With the limited season, the amount of space a pool requires in a back yard and the built in maintenance, many buyers won't even look at a home with pool.
-Homes on a crawl space when full basements are the norm. Each area of the country has foundation styles that are the custom. Steer clear of crawl spaces when full stand-up height basements are in over two-thirds of homes. In areas where crawl spaces are the norm, steer clear of slab foundations, many buyers find rooms on slabs are cold in winter months.
-Homes that lack central heating systems. Mortgage lenders and buyers appreciate the utility of central heating. If a home you are interested has a wood or other alternative heat source, factor in adding a central system before you resell.
-Earth-sheltered homes. Popular in the 1980's and very energy efficient, earth homes are not the rage with most home buyers and can be difficult to finance. If you plan to stay a long time, potential resale issues might not be your main concern.
-Homes with knob and tube wiring. Very old homes from the early 1900's had knob and tube electrical wiring. If a home you are interested is entirely or partially wired with knob and tube, check with your homeowners insurance company before you sign on the line.
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Property red flags for homebuyers.
By Mark Nash
Many home buyers judge a book by its cover, a sometimes costly mistake. It's easy to be infatuated with a cutting-edge kitchen or drop-dead views in home that you want to buy. Don't skip having a property inspection on your dream home. Most home inspectors are licensed or certified today, but they can only report what they see. Sometimes materials defects or red flags are hidden behind walls, soil surrounding foundations or buried in sewer lines. Know what the red flags are and what they mean in additional costs or if they are not easily corrected. Mark Nash author of 1001 Tips for Buying and Selling a Home offers homebuyers tips on real estate red flags for homebuyers.
-In homes more than twenty years old have the sewer line inspected from the house to the street. The latest in technology offers you the piece of mind that you won't be digging up the front yard to replace the main sewer line because of mature tree roots invading and clogging or breaking it up. Sewer or plumbing companies can send a camera through the sewer line and provide you with a video tape of what they discover. If it's clean you can relax and if there is a problem, you can show the property owner.
-Cracked heat exchangers on furnaces indicate that it's a health issue and time for a new furnace. Home builders, owners and developers can put in lower-quality and under-sized furnaces that can have prematurely cracked or damaged heat exchangers. If your home inspector finds one, you better plan on replacing the furnace. From a safety standpoint cracked heat exchangers emit dangerous gases into a home.
-Under-sized or antiquated electrical systems. Many homebuyers need to learn about home electrical systems and what composes an adequate one. If a home you look at has knob and tube wiring, forget about getting homeowners insurance, move on. Look for circuit beakers in electric panels and if you see fuses in a home electrical box, plan on updating the panel. Depending on the size of a home and power requirements the electrical service should be at least 100 or 200 amps. If a property advertises a new electric service verify that in addition to the main electrical panel being updated that the electric service from the house to the transformer has also been upgraded, a common oversight.
-Fogged or non-operative windows. I've seen many defective windows in homes that have built in the last ten years. Many people skimp on windows and these are easy to spot. Water condensation fogs the space between double-layered windows. Newer inexpensive windows sometimes don't operate properly after minimal use. Metal framed windows transfer more heat and cold than wood frame windows. Many defective or obsolete windows can be cumbersome and expensive to replace. Older homes might have single-paned double hung windows that are painted shut, have warped closed or have faulty counter-weight systems.
-Leaky or end-of-useful-life roofs. If a home you are interested in has three layers of shingles and needs to be replaced, you will first have to have all the existing shingles torn off before a new roof can be installed. Leaky roofs are caused by faulty flashing around chimneys, sky-lights and roof ridges or valleys. Many newer homes have roof issues from inexpensive shingles have are only rated for fifteen years. Ask the year life-time rating on existing shingles on any home your want to buy. Slate, tile and wood shingle roofs are attractive but be forewarned that repairs to them can be costly.
-Cracked and bulging foundations. If you see a bulging basement wall from the inside, you have a costly problem. Hire a structural engineer to inspect a bulging basement wall . These can be material defects and should be disclosed by property sellers. Cracked foundation walls can allow ground water into crawl spaces and basements. Cracks should be professionally repaired and monitored. I've seen major cracks in homes less than five years old.
-Basement water damage. Water stains on basement walls and popped floor tiles can indicate prior flooding. If a home your looking at has a flood control system it's a sure sign that the area floods. Check for sump pumps and verify they they have battery back-up systems.
-Structual walls or floors removed. Open floor plans are the rage today and many homeowners have created them in older properties. The problem is unless the openings were framed properly and included appropriate load-bearing trusses, these ex-load bearing walls could shift supporting loads to other areas that can impact the structural integrity of the entire house. Have a qualified structural engineer inspect any questionable alterations that omitted original load bearing walls.
-Mold in attics, basements and living spaces. Depending where you live in the country mold can be minor or can impact your families health. Newer homes aren't immune to mold, in fact because they are so effectively sealed for energy savings, this can contribute to mold, especially between the walls where it is hard to spot. Hire a professional that specializes in mold to inspect for problems, offer remedies and project associated costs.
-Insects and pests. Carpenter ants, termites and other pests can rack havoc on a home. Have a qualified pest inspector evaluate your potential new home. I've seen my fair share of squirrel damage in attics over the years, so have your pest inspector check for this too.
-Buried oil tanks. You would be surprised how many oil and gas tanks are still buried and abandoned around the country, in urban, suburban and rural areas. Most states and the federal government have strict laws pertain to their removal and disclosure to buyers. If you have one on a property you want to buy, gather estimates for removal costs before you move forward
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Real estate open houses are business affairs in 2006.
By Mark Nash
The last couple of years public open houses were cursory in most markets as homes sold before the advertised date. Listing agents used them to prospect for new clients and let curious neighbors and too-little-too-late buyers see what could have been. Not so in 2006. Softening sales and rising inventories of available homes have made public open houses the bread and butter this year in residential real estate marketing.Spring's arrival kicks off the largest annual exchange of residential real estate in the United States. Open houses are as much a part of this ritual as cherry blossoms, your Saturday or Sunday best and freshly mowed grass.
Who will you expect to see flocking to these business affairs held to market private homes? New real estate agents trying to see inventory or experienced ones with clients or previewing homes for time-starved ones, nosy neighbors, those looking for decorating tips, trends or nightmares and course the proverbial real estate groupies who make an event of seeing how the rest of the world lives. Oh yes, and the occasional real thing; a homebuyer. The real thing are hard to come by at public open houses as less than five percent of all homes are sold at public open houses according to industry sources. Mark Nash author of 1001 Tips for Buying and Selling a Home offers do's and don'ts for those planning to attend public open houses in 2006.
Do's
-Expect to be asked to sign in and show identification. Even with do-not-call realty agents and property owners want to know that they're safe during open houses. If you don't want to sign in which can create a relationship where an agent can follow-up from an open house, than be prepared to show identification. There has been a rise in crimes against real estate agents in recent years and safety is a number one priority with them.
-Observe starting and ending times. If you run early wait outside until the designated starting time. From experience I can tell you home sellers are frantic preparing and vacating their home before a public open house. If you arrive at the very end of an open house don't be surprised if the hosting agent can't wait an additional fifteen minutes after hours. They most likely have another appointment after and week-end days are their busiest, especially in spring.
-Wipe your shoes before entering a home. Many a homebuyer never made it to the kitchen after walking across freshly cleaned carpet with dirty shoes.
-Do leave wet umbrella, bicycles and helmets outside. These items should be parked outside the front door, not on hardwood floors or entry tables and chairs.
-Be prepared, do wear socks or stockings. No sandals, period. If you are asked to remove your shoes, owners don’t necessarily want your bare feet on their floors.
-Omit questions related to neighborhood safety. Real estate agents under Federal Fair Housing Laws are not allowed to answer these types of questions, as their answer could be construed as discrimination. Call the local police department for statistics.
-Put cigarettes, cigars and pipes out of view. Discard and extinguish appropriately before entering any home.
-Feel free to open cabinets and closets. Homeowners and realty agents expect open house gueats to investigate built-in cabinets and closets, built-in being the key word. If your in doubt remember built-in yes, otherwise no. In doubt ask the host or hostess.
-Ask before taking pictures. If you need to take some photos, do, but limit to overview photos and not every detail such as the insides of kitchen cabinets. Pick up the listing sheet for additional information. Ask if there is a virtual tour available on the Internet.
-Respect others property. Don't sit down, turn the television on and watch the ball game unless your invited. Close up garages if you found them that way. Don't turn air-conditioning on or off unless asked. If you want to see the amount of natural light ask the host or hostess to turn lights down or off.
Don'ts
-Gossip about the property when you're in it. Decorating style, property condition and personal photos might prompt you to make unfavorable comments. Save them for later.
-Don't bring coffee into open houses.Coffee is easily spilled on carpets when walking up stairs or opening closets and cabinets when touring properties. Ditto all beverages.
-Turn cell phones to vibrate. If you need to make or receive a call go to a place where you won’t disturb others at the open house. Never negotiate a home purchase contract on a different property contract while your viewing a home.
-Bring too many people with you. Leave the children, your ten closest friends and your fourth cousins at home. You'll keep focused on evaluating the property with less distractions and obligatory entertaining.
-No pets. Period. Except seeing-eye dogs. Many people today are allergic and afraid of strange dogs, even if they are the love of your life.
-Don't ask to use the bathroom unless an emergency. Homeowners don't want strangers using their bathrooms. Don't ask to change diapers and don't arrive with a soiled one to through in some strangers kitchen garbage.
-Arrive intoxicated. Open houses are business events, would you go to the office in that condition?
-Wear high-heel shoes. Spiked heels on shoes can easily dent bamboo and other softer wood floors. Plus if you get into the yard to take a look at the roof you might end up aerating the lawn.
-Present verbal offers. In most states offers to purchase are only enforceable in writing. Besides you might be tipping your hand in front of another interested party.
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The difference between new construction and resale homes.
By Mark Nash
The allure of choosing kitchen cabinets, flooring, adding a fireplace and being the only ones to inhabit a property drives many homebuyers to buy a new construction home. Before signing the developers contract consider some possible resale issues if you decide to sell your new home within two years of occupancy. Mark Nash author of 1001 Tips for buying and Selling a Home explores the pitfalls and benefits of purchasing new construction instead of a resale home.
-Existing home cost versus new construction. Research by residential real estate industry sources concur that a newly constructed home can cost up to 20% more than a comparable existing home. The added cost reflects current land, building materials and labor costs versus the cost basis for a home even one year old. Study appreciation and market conditions to determine if you sell your home within two years or less if these factors will cover your sales costs. Buyers looking at your home might consider it over-priced relative to a home built as recently as 3-5 years ago based on square footage comparisons and original cost basis.
-You don’t want to be competing with the developer if you have to sell your home before the subdivision or building is sold out. Understanding that the majority of new construction homebuyers will want the same benefits of selecting finishes in their home will opt for the developers product instead of your lived-in recently built home. When purchasing a new construction home inquire when the development or subdivision will be realistically sold through. If you decide to sell your home before this sold through date, you will be competing with the developer. This could add market time and buyers might discount your home price because they might have to add or change finishes and upgrades to make it similar to the developer’s new construction product.
-Under construction developments are not tranquil. Large-scale developments often take 2-5 years to complete, even if they are sold through. Being the first to occupy a new home, with the accompanying noise, truck traffic and lack of community might not be attractive to buyers of your new construction home if they must endure a couple of years of these annoyances. Check to see when schools, community centers and building or sub-division services will be available to residents.
-You’ll compete with model homes. Keep in mind that if need to sell and the project is not sold out your home will be competing with the developer, their marketing efforts could position their product more favorably than yours with prospective buyers. Most likely you saw the builders model and purchased your home from there professionally decorated and furnished which was filled with all the whistles and bells known as upgrades. Model homes are positioned to maximize the appeal of the space and features. Nearly empty cabinets, closets, garages and basements, fresh paint and carpet smells, shiny appliances and spotless cleaning move buyers to reproduce the model for themselves. Your home could present to potential buyers as the stripped down and all filled up reality of the model and be discounted accordingly.
-Assess your situation before buying a new construction home. New homes offer buyers the flexibility of changing floor plans, choosing finishes and defining a brand new space. Satisfied new construction buyers are everywhere, but their satisfaction comes from a reputable builder/developer, strong warranties and the knowledge that they won’t have to compete with the developer when they sell their home.
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