Jim Valentine: Why we do things in real estate
Residential real estate consists of many components each of which has its own protocols and standards. You won’t learn them all during the course of your transaction, but you will get an idea of what needs to get done, and, if things go awry, why we do them a certain way.
Physical inspections are a good example. The home can look good, especially a new home, but there are a lot of parts to a home and things can go awry. Even new homes that get inspected can have things not working right. With a new home, you will likely have a warranty, but with a resale home you won’t have that safety net available. We’ve seen pristine homes require major repairs, and the opposite, ramshackle appearing homes that were in very good condition despite the cosmetic deficiencies.
If you make an as-is offer, you will want an inspection to avoid buying the proverbial “pig in a poke.” Inspectors crawl into places and test things that the owner has long forgotten about. It isn’t that the owner is trying to hide something with an as-is sale, they usually want to realize a specific net figure and don’t want the uncertainty of repair costs. If there is something majorly wrong, they usually aren’t aware of it. Better to know up front of issues with a physical inspection than after you close. Consider inspections like insurance.
Title insurance is another area where you are spending money to protect against the unknown. If you pay cash, you don’t need it, but that might be when you need it, most if there is a problem. Title insurance claims don’t happen often as the title officers do a good job of searching title, but when they do it is a good thing to have, like any other insurance policy. You don’t want to misfortune of having to capitalize on the policy, but then that’s why you have it and it is better that than to not have it and face the financial consequences of a problem without it.
You are a nice person, so why don’t we give you the key to your new house before it closes? No matter how nice you are, things can happen. If you buy new furniture the night before the closing you could blow out your loan and not be able to buy the house. If you go start moving in and get hurt before you own the home, there can be legal ramifications, especially if it is somebody working for you and not the legal homeowner. Then there is the chance that you will adversely react to something you hadn’t seen before, slight, but it’s happened!
When you show up to a home and the door is open, why does the other agent, or owner, ask you to open the lockbox? That is the record of entry. Someone just walking up and leaving a card can be anybody casing the place for later malfeasance. Every agent entering the property should record their entry on the lockbox.
Why do we use e-signing services for everything but deeds and deeds of trust? Because they require “wet signatures” to be valid at this time. You need to plan for the transit time of those documents if you are out of town. When you close, your agent will suggest that you change the locks on your home. It isn’t because of anything known to them, but it is the unknown of who might have keys to your new home from past affiliation with the home that drives this practice.
Our advice: Words come into play in real estate, each with its own consequences once introduced to your transaction, i.e. negative grade, inadequate ventilation, vapor barrier, code at construction, life/safety, appraiser call out, arsenic, etc. Some have a bigger impact on the transaction than others, but all can be resolved with the right attitude, mindset and experience.
Stick with established standards of practice when buying or selling and you will have a safe and fruitful transaction.
When it comes to choosing professionals to assist you with your real estate needs… Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. firstname.lastname@example.org