Knowing When to Hire a Real Estate Attorney: A Guide for Home Buyers and Sellers

Just like a lighthouse guiding ships through stormy seas, a real estate attorney can navigate you safely through the choppy waters of property transactions. They’re not just for the rich or the overly cautious; in fact, there are specific situations where you’ll wish you’d secured their services.

But when exactly do you need one? How do you know when it’s time to rope in a legal expert on your home buying or selling journey? Let’s explore this uncharted territory together, and perhaps, spare you some future headaches.

Understanding Real Estate Legalities

To navigate the complex maze of real estate legalities, you’ll need a thorough understanding of the laws and regulations that govern property transactions. This understanding begins with a legal terminology breakdown. Terms like easements, liens, encumbrances, and eminent domain may sound like a foreign language, but they’re crucial to grasping the nuts and bolts of property law.

The next step is property rights exploration. You’ve got to understand that owning a piece of land isn’t just about the physical space. It’s also about the rights associated with it. These rights can be divided into two categories: surface rights and subsurface rights. Surface rights refer to anything on top of the land, like buildings or trees. Subsurface rights, on the other hand, refer to what lies beneath, such as minerals or oil.

As you delve deeper into real estate legalities, it’s important to remember that every property is unique, with its own set of potential legal pitfalls. So, don’t be afraid to seek professional help if you’re feeling overwhelmed. A real estate attorney can guide you, ensuring that you’re fully aware of your rights and obligations.

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When Buying: Key Considerations

While understanding real estate legalities is important, it’s equally vital to keep a few key considerations in mind when you’re on the buying side of a property transaction.

First, property financing can be complicated. It’s not just about getting a mortgage; you’ll also need to consider property taxes, insurance, and potential homeowner association fees. An attorney can help you understand these financial obligations and ensure you’re prepared for them.

Second, contract negotiations are another area where an attorney can be invaluable. Buying a house involves numerous contracts, from the initial offer to the final purchase agreement. These contracts can include complex legal language and terms that you might not understand. An attorney can review these contracts, explain them to you, and negotiate on your behalf to ensure your interests are protected.

When Selling: Necessary Precautions

Just as buying a property requires careful consideration, selling one also necessitates taking certain precautions to ensure a smooth transaction. You’re not only looking to get the best deal, but also to avoid any legal complications that could throw a wrench in your plans.

One of the key areas to pay attention to is property disclosure. It’s your legal obligation to inform potential buyers about any known issues with your property. Failing to do so could lead to lawsuits and other complications.

Here are some precautions you should take when selling a property:

  • Ensure your property disclosure is complete and truthful.
  • Be prepared for potential closing complications.
  • Keep all communication with the buyer in writing.
  • Be careful with the wording of your sales contract.
  • Don’t skip the home inspection process.

when to hire a real estate attorney

Benefits of Hiring a Real Estate Attorney

Navigating the complexities of real estate transactions can be a daunting task, but hiring a real estate attorney can provide numerous benefits to ease the process.

One of the key benefits is legal protection. An attorney will review all documents involved in your transaction, ensuring every detail is examined for your best interest. They’ll protect you from unscrupulous sellers or buyers, potential scams, and even simple oversights that can have major legal implications down the line. With an attorney on your side, you’re not just buying or selling a property—you’re securing peace of mind.

Attorney fees might seem like an additional expense, but consider this: the cost of a legal misstep in real estate can be far more devastating. With an attorney, you’re investing in expertise that can save you from costly pitfalls. They can negotiate better terms, prevent legal issues, and even save you money in the long run.

Tips for Choosing the Right Attorney

Now that you understand the benefits of having a real estate attorney, it’s important to know how to select the right one for your needs. So, here are a few tips that might come in handy:

  • Experience: Look for an attorney with plenty of experience in real estate law. They’ll have the expertise to handle complex cases.
  • Attorney fees: Don’t shy away from discussing fees upfront. Choose one whose charges are within your budget.
  • Law firm reputation: A reputable law firm usually has reliable attorneys. Research online or ask around to get an idea of the firm’s standing.
  • Communication: You’ll want an attorney who communicates clearly and promptly. Misunderstandings can lead to serious legal issues.
  • Recommendations: Ask for recommendations from friends, family, or professional contacts. They can give you an honest review of the attorney’s services.

Choosing the right attorney isn’t just about their experience or fees. It’s also about their reputation, communication style, and recommendations. Remember, you’re entrusting them with a significant financial transaction. So, take your time and choose wisely.

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Frequently Asked Questions

What Is the Average Cost of Hiring a Real Estate Attorney?

You’re asking about the average cost of a real estate attorney. It’s not a set figure, it varies based on attorney qualification and legal fee breakdown. Generally, you’ll spend between $150 and $350 per hour.

Can a real estate attorney negotiate on my behalf during property transactions?

Absolutely, a real estate attorney’s expertise allows them to negotiate on your behalf. They’ll ensure legal protections are in place, so you’re not left vulnerable in any property transactions. It’s their job to safeguard your interests.

Will a real estate attorney help in resolving property disputes?

Absolutely, a real estate attorney’s expertise is crucial in dispute prevention and resolution. They’ll leverage their knowledge to negotiate, mediate, or even litigate property disputes on your behalf, ensuring your interests are protected.

How Long Does a Typical Real Estate Transaction Take with a Real Estate Attorney?

Depending on attorney selection and transaction complexity, it’s typically 30–60 days. You’ll experience quicker, smoother transactions with experienced attorneys, but complex deals may take longer to navigate and finalize.

What Are Some Specific Situations Where Hiring a Real Estate Attorney Would Be Unnecessary?

For uncomplicated transactions, like a straightforward home sale, you don’t need to hire a real estate attorney. Alternatives, like a trusted realtor or title company, can handle everything smoothly on your behalf.

Conclusion

So, you’ve navigated the complexities of real estate legalities, and you’re armed with the knowledge of when to hire a real estate attorney. Remember, it’s not just about buying or selling; it’s about protecting your interests.

Hiring the right attorney can make all the difference. Don’t rush your decision. Use the tips provided to find the perfect fit for your needs.

It’s your property, your money, and your future—take control!

Understanding Pre-Listing Inspections: What Sellers Need to Know

In the dynamic world of real estate, selling a home is not just about listing it on the market. It’s about making strategic decisions that enhance its appeal and value to prospective buyers. One such decision is opting for a pre-listing inspection. This detailed guide dives into what a pre-listing inspection entails, its coverage, comparison with standard home inspections, timing, costs, and the nuanced pros and cons it presents to sellers. Additionally, we’ll explore the obligations around disclosure and address common concerns and misconceptions about the process.

What is a Pre-Listing Inspection?

A pre-listing inspection is an assessment conducted on behalf of the seller before a home is listed for sale. This proactive approach allows sellers to uncover any issues or defects within the property that could potentially derail or complicate a future sale. By identifying these problems early, sellers can choose to address them, thereby avoiding last-minute negotiations or concessions to the buyer.

pre listing home inspection

What Does a Pre-Listing Inspection Cover?

Pre-listing inspections mirror the thoroughness of buyer-initiated inspections, examining key components of the home, including but not limited to:

  • Structural Integrity: Assessing the foundation, beams, and roofing for signs of wear, damage, or instability.
  • Systems and Components: Evaluating the condition and function of the home’s HVAC, electrical, and plumbing systems.
  • Exterior and Interior Conditions: Checking for any damage or concerns with the home’s exterior walls, windows, doors, and interior spaces.
  • Additional Inspections: Depending on the property, this might also include checks for mold, pests, radon, or asbestos.

Home Inspection vs. Pre-Listing Inspection

While both inspections aim to evaluate the condition of a property, their timing and initiating party differ. A traditional home inspection is requested by the buyer after an offer is made, often as a contingency of the sale. In contrast, a pre-listing inspection is initiated by the seller before the home is even listed. This fundamental difference can significantly impact the negotiation dynamics and sale process.

When to Get a Pre-Listing Inspection

The ideal timing for a pre-listing inspection is before you list your home for sale. This strategic timing allows you ample opportunity to make necessary repairs or adjustments based on the inspection findings, setting a realistic price for your property that reflects its condition and market value.

How Much Does a Pre-Listing Inspection Cost?

The cost of a pre-listing inspection can vary widely depending on the size and location of your home, as well as the depth of the inspection required. On average, sellers might expect to pay anywhere from $200 to $600. While this may seem like an additional upfront cost, it can save money in the long run by preventing unexpected issues from arising during the sale process.

Pros and Cons of a Pre-Listing Inspection

Pros:

  • Increased Transparency: Offers a clear picture of the home’s condition, enhancing trust with potential buyers.
  • Negotiation Leverage: By addressing issues beforehand, sellers can avoid price negotiations related to the property’s condition.
  • Faster Closing: Minimizes the chances of surprises that could delay or derail the sale process.

Cons:

  • Upfront Costs: Requires an initial investment from the seller for the inspection.
  • Potential for Overwhelming Information: Sellers might feel compelled to fix all issues identified, which can be costly and time-consuming.
  • Disclosure Requirements: Revealed issues may need to be disclosed to potential buyers, which could affect their interest or the perceived value of the home.

Are You Required to Disclose Your Pre-Listing Inspection?

Disclosure requirements vary by state, but generally, any known defects or issues that could materially affect the property’s value must be disclosed to potential buyers. This means that if a pre-listing inspection uncovers any significant problems, the seller is typically obligated to disclose these findings.

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What About Sellers Who Don’t See the Sense in Paying for an Inspection?

Some sellers may question the value of a pre-listing inspection, especially if they believe their home is in good condition or if they’re in a hurry to sell. While skipping the inspection can save upfront costs, it’s a risky move that could lead to unexpected buyer demands, renegotiations, and even legal disputes post-sale. The cost of a pre-listing inspection is often a small price to pay for the peace of mind and smoother sale process it can provide.

Wouldn’t Buyers Still Want to Do Their Own Inspection?

Yes, many buyers will still opt for their own inspection, and that’s perfectly acceptable. However, a pre-listing inspection can complement this process by preparing the seller for what might be discovered, allowing them to address significant issues beforehand. It can also serve as a gesture of good faith, showing potential buyers that the seller is committed to transparency and has taken steps to ensure the home’s condition is up to par.

Conclusion

A pre-listing inspection is a strategic tool that can significantly impact the sale of a home. It not only prepares sellers for negotiations by providing a clear understanding of their property’s condition but also streamlines the sale process by mitigating potential surprises that could delay or derail a deal. While it comes with its own set of considerations—such as cost and the potential need for disclosures—it offers a proactive approach to selling that can ultimately lead to a more satisfying, efficient, and potentially more profitable sale.

By understanding the ins and outs of pre-listing inspections, sellers can navigate the real estate market more effectively, ensuring their home stands out for all the right reasons. Whether you’re a first-time seller or a seasoned real estate investor, considering a pre-listing inspection could be the key to unlocking the true potential of your property sale.

FAQ

Q: Can I perform a pre-listing inspection myself, or do I need a professional?

A: While sellers can conduct a basic review of their property, a professional home inspector brings a level of expertise and thoroughness that is crucial for a comprehensive assessment. Professional inspectors are trained to identify issues that may not be apparent to the untrained eye, including structural, electrical, and plumbing problems. It’s highly recommended to hire a professional to ensure the inspection is thorough and adheres to industry standards.

Q: If the pre-listing inspection reveals major issues, am I obligated to fix them?

A: Discovering major issues during a pre-listing inspection does not obligate you to fix them. Sellers have the option to repair the issues, adjust the home’s price accordingly, or disclose the problems to potential buyers and sell the home as-is. Each option impacts the sale process and negotiations differently, so it’s important to weigh the costs and benefits before making a decision.

Q: How do I choose a reliable home inspector for a pre-listing inspection?

A: To select a reliable home inspector, look for individuals certified by reputable organizations such as the American Society of Home Inspectors (ASHI) or the International Association of Certified Home Inspectors (InterNACHI). Recommendations from your real estate agent or industry peers, along with reviews

Retirees: Check out the benefits of downsizing

One minute, you’re a fresh-faced 20-something taking on the world, and the next, you’re taking down the shingle and considering how the two of you (or the solo you) will deal with life after work.

It’s at this point that many baby boomers decide to flee the empty nest and downsize. It’s a smart move right now considering how much equity homeowners have been able to accumulate in the recent overheated housing market.

The advantages of downsizing outweigh the disadvantages

If you’ve owned your home for some time and plan on selling soon, you may be surprised at how much you’ll gain from selling. “Soon” is the operative word in the scenario, however. The real estate market is correcting and some experts claim that we’ll be in a homebuyers’ market sometime later this year or early 2024.

Selling sooner rather than later allows you to take advantage of mortgage rates that are still “lowish” and a market that is still fairly friendly to sellers.

But, that’s not the only advantage of downsizing

Smaller homes are easier to maintain

The worst part of owning a house is the amount of time, effort and money that maintaining it requires. If you’d rather spend those hours with family and friends or traveling, snoozing or whatever, downsizing is a good choice for you. There are many ways to make a smaller space functional and design-friendly too!

Bonus: Smaller homes also take less time to clean.

You’ll spend less money with a smaller home

Smaller homes not only cost less, but they’re less expensive to insure, heat and cool and they typically come with lower property taxes than larger homes.

Your body will thank you

Come on, we may not like admitting it, but our aging bodies don’t do well with stairs or bending over to pull weeds and anything that represents a “slip and fall” danger becomes terrorizing. Downsizing gives you a chance to choose a home that allows you to safely age in place.

Questions? Feel free to reach out to us to learn more about how we can help you downsize.

3 ways to make your home attractive to buyers (that have nothing to do with staging and curb appeal)

What is the number one fear of most homebuyers? That the home they have fallen in love with is a “lemon,” and that there will be future issues that will cost the buyer a fortune.

Sure, a professional home inspection can alleviate many of these nagging doubts, but there are other things a seller can do to induce confidence in homebuyers. Things that your competition is most likely not offering.

1. Check your warranties

Have you had any work done to the home? Whether it was replacing a water heater or HVAC system to installing irrigation in the backyard, you hopefully have a warranty or two for the work performed.

Read over the terms of the warranties, looking carefully for whether or not any of them are transferable. “When allowed, warranty transfers are subject to the manufacturer’s terms and conditions so be sure to review the warranty for this important information,” cautions Annie Crawford at GAF.com.

Transferable warranties, especially on pricey items, such as HVAC systems and swimming pools, are a confidence booster for homebuyers, and an excellent marketing tool.

2. Gather renovation records and receipts

Not only do homebuyers love improvements to a home, appraisers do too. Therefore, it’s always a good idea to have on hand, for both parties, receipts and records of any renovations performed on the home.

Offer to make copies so that the buyer knows which contractor to call if service or repairs are ever required.

3. How old is that …?

Savvy homebuyers will ask their real estate agent to find out the age of the pricier systems in a home. These include the HVAC system, roof, electrical system and water heater, among others.

If you’ve had routine service performed on any system in the home (especially the HVAC system), dig out the records to prove this. It’s valuable information for both your bottom line in the home sale and for the buyer’s confidence in the home.

Take these three steps to make your home more attractive to buyers and watch the offers roll in.

 

What’s going on in the real estate market?

To say that our neck of the woods is wildly popular would be an understatement. From national press accolades as one of the country’s best places to live to excellent schools, our communities offer an unparalleled lifestyle.

Its popularity is one reason that our market is being particularly hard hit by a low inventory of homes for sale. With far more buyers in the market than homes to sell, prices are soaring in response to the demand.

How is “inventory” determined?

Real estate professionals answer a hypothetical question when determining the absorption rate for the current inventory of homes for sale:

“How long would it take to sell every listed home if no new homes came on the market?”

Finding the answer requires using a specific calculation that results in a “months of inventory” figure.

As of this writing, U.S. Existing Home Months’ Supply is at 3.30, which is up from 3.10 the previous month. In fact, the inventory of available homes has been steadily increasing, month over month, since December of 2022, according to research from the National Association of REALTORS.

Most real estate professionals agree that an inventory of 5 or 6 months is a sign of a balanced housing market. We still have a way to go to reach either of those numbers, but the steady increase over the past 10 months is encouraging for homebuyers.

This is where we are right now – a market that still favors sellers, but is in flux. If you hope to take advantage of the sellers’ market, jump in soon.

Why are there so few homes for sale?

The reasons behind our low inventory situation are multi-pronged.

Mortgage interest rates

Not only are rates higher than they’ve been in some time, but folks who bought when they were super low are reluctant to sell. “… homeowners don’t want to give up their low mortgage rates,” according to Holden Lewis at NerdWallet.com.

Baby boomers (born between 1946 and 1964)

Our older generation is taking much of the blame. Surveys of this generation of homeowners (33 million are owner-occupants), find that the majority of them have decided to age in place. Plus, they are concerned about number 1, above, losing their current low mortgage rate if they sell and then buy another home.

Home builders

“New home sales are up almost a third compared to last year, even as sales for existing homes remain in the doldrums,” claims Diccon Hyatt at Investopedia.com.

Sounds like good news, right? Not so fast.

Those higher interest rates aren’t only hurting homebuyers. Builders need credit as well and financing their projects has become vastly more expensive.

While housing permits have increased, completions have dropped to the “… lowest level since January 2022,” according to Lucia Mutikani at Reuters.com.

Finally, investors who have been snatching up homes over the past few years are seeing rents rise at an astonishing rate. “Those investors have no incentive to sell,” Dennis Cisterna, CEO of Investability Solutions tells Lewis.

What are you waiting for?

If you’re thinking of selling your home, why are you waiting? With each increase in mortgage rates, a certain number of potential buyers leave the pool. If those numbers grow larger, the market will change and prices may begin to come down.

Right now, your home value is most likely at a record high and buyers are clamoring for homes. If ever there was a better time to sell a home, this is absolutely it.

Many would-be sellers tell us that they’re hesitating because of a fear that they won’t be able to find a suitable replacement home. Buying a home while trying to sell one can be challenging, but we offer brilliant solutions that make the process far less stressful.

Please reach out to us if you have any questions about the real estate market here in our corner of the world We love to talk about real estate!

3 Things you absolutely must do before the open house

Yes, there aren’t enough homes for sale for all of the buyers who are dreaming of buying one. The good news for homebuyers is that the inventory of available homes has increased, month over month, since April of this year (realtor.com).

Let’s hope that trend continues, for buyers’ sake.

As for home sellers? If you are putting your home on the market soon, pat yourself on the back. The inventory will, someday soon, get back to normal. When it does, there will be plenty of competition among home sellers and prices typically drop in these situations.

You will get more for the house right now than in a buyers’ market. Especially if you ready the home for the spotlight.

1. Clean anything that’s gross

Potential homebuyers look at just about everything in your home. They open drawers to see how roomy they are, they open closets for the same reason.

They open kitchen appliances if they’re included in the sale.

Many homeowners learn to live with the gunk that accumulates inside appliances, such as the oven, refrigerator and dishwasher,  without performing routine cleaning. Open house attendees will consider it disgusting.

Ensure that any appliances that will be included in the sale are impeccably clean, inside and out.

Clean the toilet until it sparkles, get rid of soap scum in the bathtub and hang up fresh towels.

2.Don’t ignore your curb appeal (or lack thereof)

We like to ask our listing clients to go outside and stand at the curb in front of the house. Ask a friend or neighbor to accompany you.

Take notes of what you see and ask your companion to do the same. Since this spot, at the curb, is most likely where potential buyers will get their first in-person glimpse of the home, look at it with a critical eye.

Are there any turnoffs? These can be anything from chipped or peeling paint on the fascia to dead plants and torn window screens.

Transform that area of the home into a magnet that draws people out of their cars and into the home.

3.Don’t leave home without them

Common home-selling practices include the fact that the homeowner should not be home during the open house. Your real estate agent will act as your representative to all that attend.

Your real estate agent, on the other hand, isn’t responsible for ensuring that the home is clean, that the landscaping is in top shape and that your pets aren’t present.

Yes, it’s a terrible inconvenience to have to find a place for your pets for several hours. But it is critical. Here’s why:

  • Many people are allergic to dogs and/or cats. Just looking at them may psychologically trigger their allergies.
  • An intense fear of dogs. Nobody knows how many people suffer from this phobia but the experts at the Cleveland Clinic claim that “… fear of animals is one of the most common types of specific phobias.”

They also say that “… about 1 in every 3 people with a phobia of animals has an overwhelming fear of dogs.”

  • With all of the people coming in and going out of the house, your pets may get out.

Many homeowners think that they can get around these issues by crating the animals and keeping them in a closed-off-to-open-house attendees room.

It’s something most listing agents discourage. Potential buyers will wonder why it isn’t available to view. Think of it this way:

Would you buy a car from a seller who refuses to allow you to look in the trunk?

There are many ways to deal with the pet conundrum:

  • Schedule their grooming for open house day
  • Ask a friend or family member to watch them
  • Take them to a pet daycare center
  • Hire a dog walker for a few hours
  • Take the dog to the park
  • Negotiate with a boarding facility for an hourly rate

 

Shopping for a home? Pay attention to the neighborhood

Homebuyers enter the home shopping process with one of two mindsets. There are those who know what kind of house they want – the number of bedrooms and bathrooms, the type of kitchen and maybe whether or not they want a yard.

Then there are those who know where they want to live, such as a specific school district or neighborhood, but haven’t completed a wish list of home features.

Seldom does a homebuyer tell her real estate agent that she wants a “3-bedroom, 2-bathroom home with a gourmet kitchen, a fireplace and a pool in the backyard, located on J Street in the Mountain Shadows neighborhood.”

While the features you want in a home are important information for your real estate agent, “location, location, location” is just as important, important, important.

Even if you’re among the group of homebuyers who know exactly what you want in a house and perhaps have one picked out, it’s important to scope out the neighborhood before committing fully to buying.

Don’t Believe What You Hear

Especially when you are new to an area, it’s easy to believe what residents tell you about the various neighborhoods.

“When I was getting ready to move to Las Vegas 10 years ago I went online and read about the various neighborhoods,” recalls Veronica Thomas. “The consensus seemed to be that Green Valley and Summerlin were the best places to live.”

On a weekend trip to check out the areas in person, Thomas found that neither area suited her. “Green Valley was far too congested for me,” she said.

“Summerlin was way too far from my job on the Strip. I’d heard that both had low crime rates but they weren’t that much lower than some other areas I found much more attractive,” she concludes.

There is nothing quite like first-hand information. If good schools are important to you, do the research yourself instead of relying on what others consider “good.” GreatSchools.org lists schools’ test scores and features reviews from parents.

Crime statistics can also be found online. The FBI offers a nationwide Sex Offender Registry on its website and Neighborhood Scout boasts that they “reveal the safety from crime for every neighborhood in America.” Finally, call the police or sheriff’s department in the area for more information on crime statistics.

Google Maps will allow you to map a route from the new house to your job, to a particular school or to the nearest shopping center and kick back the mileage and a rough estimate of the time it will take to get there.

A lot of your preliminary neighborhood research can be done online, but it’s not a substitute for actually checking out the neighborhood in person.

Drive It

Number three on the list of the 5 biggest mistakes homebuyers make when choosing a neighborhood is underestimating or ignoring the commute, according to MSN Real Estate. Their advice is to actually make the commute during normal commute hours to see if it fits your lifestyle.

Drive through the neighborhood at different times during the day and evening, on both weekdays and weekends, looking for anything that may be considered an annoyance.

Music blasting from a teenager’s open bedroom window when you’re trying to unwind after work may make you wonder why you bought a house in that neighborhood in the first place. Is the house under the airport’s flight path? Kids – and all that they imply – may be a blessing or a curse, depending on how you feel about them.

If you don’t drive, walk the neighborhood. Locate the nearest public transportation stop and see for yourself what the walk is like to the store and other local conveniences.

Check Municipal Records

Finally, check the neighborhood and surrounding area for anything that may impact the home’s value. Look for:

  • A high number of foreclosures nearby
  • Developments in the works
  • Upcoming zoning changes

Sure, it’s important to fulfill those dreams of the perfect house for you. But the bigger picture – a suitable neighborhood in an area that fits your lifestyle is what will, according to MSN Real Estate’s Melinda Fulmer, “determine whether you’re living the American dream or just living.”

The 3 Most Important Real Estate Documents You’ll Sign

The process of purchasing a home can be summed up in five words: a huge pile of paperwork. Despite promises of becoming a paperless society, it seems the real estate industry hasn’t yet caught up and both buyers and sellers spend a lot of time with pen in hand.

It’s easy to allow your mind to wander and your eyes to glaze over when your real estate agent sticks yet another form full of legalese in front of you. It’s also dangerous – especially when confronted by one of the three most important real estate documents in the home purchase process.

Let’s take a look at these nasty’s and why you should pay close attention to them.

The Purchase Agreement

Invariably, the first question a homeowner has when handed a purchase agreement is: “How much?” Sure, the offering price is important, but there’s a lot more lurking in the purchase agreement – and some of it is just as important as the money.

A few of the clauses you should scrutinize:

Earnest money deposit: As a seller, you’ll want this amount to be high and as a buyer, you will want to pay as little as possible. The amount of the deposit, however, not only proves that the buyer is serious about completing the transaction but also his or her financial solvency.

As Trev E. Petersen of the Knudsen Law Firm in Lincoln, Neb. says, as a seller, would you “even consider selling to a person who does not have $1,000 to put down on the house?” On the flip side, as a buyer “If you cannot afford a $1,000 earnest money deposit, should you even be considering the purchase?”

Financing contingency: The financing contingency allows the buyer to exit the transaction with no penalty if he or she can’t obtain financing at the stated rate and terms. The contingency, like all of them, is time-sensitive, meaning that the buyer has a limited amount of time to secure a promise from a lender.

The promise is typically based on underwriting, so it is different from the pre-approval process the buyer may have gone through prior to submitting the offer.

Sellers want to scrutinize the time element in this part of the contract. Since you’ll be taking the home off the market during this period, ensure that it isn’t protracted.

Dates: Every contingency in the purchase agreement has a corresponding time limit. There is also a stated date for closing and for possession of the home. Both parties should pay close attention to all of these time limits bearing in mind that “time is of the essence” in a real estate transaction.

Seller’s Property Disclosure

Arguably one of the most commonly litigated real estate processes is the seller’s property disclosure. Rules vary by state and even by region, but generally, a seller has a duty to fully disclose “the condition and information concerning the property known by the Seller which materially affects the value of the property.”

For the buyer, this form is a road map to future repairs. For the seller, if done honestly and thoroughly, it’s a “CYR,” (cover your rear-end).

Buyers also have a duty during the process and it’s known as “due diligence.” Part of this diligence involves becoming as informed as possible about the investment you are about to purchase.

This means you simply must read the seller’s disclosure forms. If you don’t, and a pre-existing condition later rears its ugly and costly head, you have no legal recourse after the sale closes.

Remember, that fresh coat of paint may just be a seller’s way of increasing the home’s curb appeal – or the paint could be acting as a bandage to cover water damage. Check the disclosures carefully.

Homeowners Association Documents

Purchasing a home that is governed by a homeowner’s association brings a whole new pile of paperwork to the process. The governing documents, known as the Covenants, Conditions and Restrictions, or CCRs for short, are extremely important reading material.

These documents will tell you if you can paint your house and, if so, what color. They contain pet restrictions, landscaping restrictions, parking rules and even whether or not you can fly a flag on your property. In essence, although you own your home, the CC&Rs dictate how you can use it.

Other documents in the package that bear scrutiny are the HOA meeting minutes, the budget, insurance information and the financial statements.

These documents don’t exactly make for light, enjoyable reading, but it is vital that you read them thoroughly. Keep in mind that if the HOA isn’t run properly, they may not have enough money in the reserve fund to pay for large repairs or maintenance projects.

In these cases, they will levy an assessment on all homeowners. This assessment is mandatory and failure to pay may result in fines, property liens and even foreclosure.

Consult with an attorney if there is anything in the paperwork you don’t understand.

While every piece of paper put in front of you for your signature is important in a real estate transaction, these three deserve special scrutiny. A home is a lot more than four walls and a roof, it’s an investment that requires due diligence on your part before agreeing to the purchase.

Have you considered a newly-built home? Maybe you should

Homebuilders are paying attention. “Homebuilders are downsizing the American Dream to lure in entry-level buyers frustrated by the resale housing market,” according to Dani Romero at Yahoo Finance.

They’ve already increased housing starts, which reflects their aim to meet the wants and needs of homebuyers who are frustrated by the paltry number of existing homes for sale.

This is huge news for you if you’re among that group. Would you ever imagine that you could buy a brand-new home? No greasy smells from someone else’s cooking, no nasty carpet. Everything, down to the last detail, is brand new.

But wait … there’s more

Have you ever met a homeowner who threw in a pricey country club membership as an enticement to purchase his home? We haven’t either, yet we have met home builders who do just that.

It’s called an incentive and in slow-moving real estate markets, it takes more than offering a choice of countertops and sexy landscaping to sell a home. In some luxury home communities, in fact, huge incentives are the norm.

Incentives from builders run the gamut from appliances to gift cards to mortgage rate buydowns. The latter should be particularly attractive to first-time homebuyers.

If you aren’t familiar with rate buydowns, learn more at CNBC.com.

Incentives aren’t the only reason, however, that many Americans are touring new home communities.

Shop smart and you’ll save money in the long run

Most new homes are energy efficient. If you go a step further and buy a house that bears the ENERGY STAR label, you’ll use 20 to 30 percent less energy every year than you would had you purchased an existing home without ENERGY STAR labeling.

Considering that the average American spends $2,368 on utility bills every year (NerdWallet.com), this reflects substantial savings. What would you do with an extra $473 to $710 a year?

Add that to any incentives you’re offered and you may save a significant chunk of money, not only on the purchase, but down the road with less expensive power bills.

While all of this is good news for homebuyers there are aspects of the new-home purchase that should be considered.

Don’t shop without representation

The builder is represented by a real estate agent. As such, he or she owes a fiduciary duty to the builder, not the buyer.

To protect your interests, use a real estate agent while shopping for and purchasing a newly constructed home. It will cost you nothing, as the builder pays all real estate brokerage fees.

Try to ignore the bling

Model homes are alluring – it’s easy to fall head over heels in love with them. The builder knows this and loads the models with her top-of-the-line options and upgrades.

So, while you dream of having a replica of the model home, the builder dreams of giving it to you – at tens of thousands of dollars over the original price of the home.

New home specialists suggest that you choose options and upgrades that appeal to you and will make living in the home more pleasant, rather than trying to copy the model home’s features.

Ask the builder’s representative if you will be held financially responsible for installed upgrades should you need to cancel the sale.

Finally, if you absolutely must have an expensive upgrade, find out how much it would cost to have an outside contractor purchase and install it after the close of escrow. You may be surprised how much money you can save by going this route.

Inspect to protect

“Buy a new one [home], and you’re essentially the guinea pig testing how well the HVAC system works and whether the basement floods during a storm,” cautions Lisa Kaplan Gordon at Realtor.com.

There are several other reasons you should have the new home professionally inspected by an independent third party prior to closing escrow.

Experts with the California Real Estate Inspection Association take the inspection process one step further, suggesting that the home should be inspected during construction. This helps “… ensure that the work completed is in compliance with plans, specifications, and the construction schedule.”

Finally, real estate legal experts suggest that you purchase a new home warranty that takes up any slack in the builder’s warranty.

So, what are you waiting for? Grab your real estate agent (that would be us, by the way!) and head out to tour the new homes under construction. You may be surprised by what you find.

 

Selling your home? What to look for in a listing agent

If you’re thinking that finding the perfect real estate to help you sell your home is akin to finding a white cat in a snowstorm, you’re not alone. In fact, ask Google “how to find a listing agent” and you’ll get 151,000 answers.

The task isn’t quite as challenging as it seems when you understand that the listing agent’s primary job is to market your home. So, yes, you want to find an agent you feel comfortable with and one with experience listing homes. Beyond that, there are three important qualities to look for as you interview agents (and please interview more than one) for the job of selling your home.

Communication

One thing I hear most often from my clients is that their last agent was unresponsive. I understand that selling your home is stressful and that you’ll have questions along the way. It’s a pity that not all agents feel the same, so ensure that the one you choose will respond to your calls in a timely manner and keep you updated on the progress of the sale.

Experience and Expertise

Look for a listing agent with a proven track record in the local market. An experienced agent is more likely to have a deep understanding of current market trends, pricing strategies, and effective marketing techniques. A seasoned professional will also have the negotiation skills necessary to maximize your profit.

Scrutinize the Agent’s Suggested List Price

Yes, determining an accurate market value for a home and suggesting a strategic listing price is very much a part of an agent’s marketing plan. Homes priced right sell faster and the quicker your home sells, the more money you’ll get for it.

Beware of the agent who suggests a price considerably higher than others you interview. This is an old, dishonest trick known as “buying the listing.” Thankfully, not many agents attempt this but those who do will price your home high at the outset and then continually ask you to drop the price.

Marketing

Homeowners hire a real estate agent to not only list their homes but market them as well. The listing aspect is merely sticking a sign in the yard and information in the Multiple Listing Service database.

Marketing it is how he or she will get the word out about your home to other agents and unrepresented homebuyers.

Ask the agent to explain his or her approach to marketing homes and exactly how your home will be marketed. And, since most homebuyers start their search online, clear, compelling photographs act as bait to get them off the couch and into your home.

Additional marketing tools that attract homebuyers include floor plans and 3D virtual tours.

In today’s digital age, an agent who leverages technology and online platforms effectively can significantly increase your home’s visibility to potential buyers.

Personality Fit

Selling a home can be an emotional process, and it’s important to find an agent whose personality aligns with yours. A compatible working relationship can help reduce stress and facilitate effective collaboration throughout the selling process.

Hiring the right listing agent is critical to the successful sale of your home. Take your time and don’t rush the process.