On Real Estate

Jim Valentine: Unintended consequences and surprises

Jim Valentine on Real Estate

Jim Valentine on Real Estate

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There are many aspects to the journey of buying and selling real estate. As you venture forward in the process be aware that surprises can happen along the way, and you must be ready to make decisions when they do. The best thing you can do is to be briefed and ready in the beginning.
Inspections and investigations are one of the most prevalent sources of surprises during escrow. One area often overlooked is water quality. If you are getting a VA loan you should know that you must prove the water meets drinking standards even if you are on a water system. We learned recently of an escrow that was ready to close when it was learned the water was a touch high in arsenic content. The house is on a water system and the water company told the sellers and buyers that it was their responsibility to filter the home, not the water companies to filter all of their water. Escrow is delayed while a filter is installed, and the water tested.
If you are looking for a loan using land as security, you should be aware that there aren’t many land lenders around these days. There are a few, and their programs are vastly different. Regardless of who you use, be sure you understand the consequences of the loan. You most likely won’t be able to expense the interest costs on your tax return on such a loan. If you would like to benefit tax-wise from paying the interest, you should use your primary residence to secure the loan. If you have a loan in place, you can use a home equity loan to accomplish this if you have enough equity to cover your borrowing needs to complete the purchase.
As-is sales are quite common these days as buyers are positioning their offer to compete. It is important for all to understand that the as-is addendum does not obligate the buyer to buy under all circumstances, rather it encourages them to get inspections and advises them that they can quit the transaction if they want. When the test results are in there may be a need to renegotiate the transaction. This occurs when extensive life safety issues are revealed by the inspection, or far more work than was visible and/or anticipated. Sellers will often work with buyers in such situations to adjust for the surprises to a point where the buyer is closer to getting what he initially bargained for.
An area that can get confusing is that of lawn art. Owners often gather things to display around the outside of their home, i.e., gnomes, wagons, statues, etc. They aren’t always attached which would make them fixtures, so they sometimes disappear during the course of escrow. If you see something around the property that you want to make sure is included, be sure to include it in your offer so you don’t find yourself in the uncomfortable position of chasing gnomes around the countryside.
The comfort of a hot tub is very relaxing but dealing with them in a real estate transaction can be stressful. They are big and heavy, and it seems like most of the time a seller wants to leave it the buyer doesn’t want it and vice versa. Funny little dance that goes on so be sure to specify up front how you want it to be treated in your escrow whether you are a buyer or seller.
Most real estate issues have to do with getting what you bargained for. That can be value or features/items, but it is what you think you bought. Do as much as you can up front to assure your peace of mind at the end of the transaction because your paper trail will be the guide you and your counterparts follow on the path to closing. It will give everyone a common basis to work from.
Be candid with your agent and make sure he knows your thoughts on things as you go along. He is tasked with memorializing your wishes in the offer, but he has to know them in order to do so. If you want something included or excluded, share your thoughts so the offer represents what you want it to.
When it comes to choosing professionals to assist you with your Real Estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, BS.3481, 775-781-3704. dpwtigers@hotmail.com


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