Real Estate Advice / Chris
Buying a car/furniture while under contract and before closing
Few things are scarier in real estate than a buyer that drives up in a new car after going under contract on a house. The problem is that lenders approve buyers for homes based on a number of factors with one being the debt-to-income ratio. Simply put, if you take on more debt, you’re now a riskier buyer for that lender. I know it’s really temping to hit the 0% financing offers on new furniture for your new home but don’t do it! You’ll scare me to death!
Other agents that have no idea what they’re doing
As with every profession, some people are simply better at it than others. Real estate is no different in that regard. We have come across agents where it’s clear that they have never even read the standard contracts! We have just recently seen:
- An agent that didn’t know how to open a lock box to get a key out
- An agent complain about the condition of a home at the walkthrough when the contract was “as is.”
- An agent that did not know that garage refrigerators convey with the sale on a given contract
- An agent that did not understand the timing of earnest money deposits
- An agent that did not know to have their buyer apply to the homeowner’s association
- An agent that did not understand which items are considered defective vs. cosmetic
- An agent that forgot to write in the washer and dryer on a particular contract that does not include them
- An agent that did not understand the financing contingency (very scary!)
This is why people need to thoroughly interview the agents they are hiring. Do not use an agent just because she’s your aunt or friend. This is too serious of a transaction to not use experts.
Part-time agents
I don’t think anything scares or bothers me more than part-time REALTORS®. Real estate transactions are very serious business and have very serious timelines. Do you really want someone that dabbles in real estate?
I once had a transaction where I was representing the seller. We were under contract and that contract has very specific dates and times for different things to be done. Well, the other agent’s buyer hadn’t made their second earnest money deposit and it was getting late in the day. I called the buyer’s agent but no answer. I texted. No response. Called again. This went on for quite some time until finally my phone rang. The other agent says, “What do you want? I saw you kept calling but I can’t simply leave my job at Hallmark because you need something.” I couldn’t believe it! The fact was, if her buyer failed to make the deposit that day, my seller could have gone after the first deposit and likely kept her buyer’s $25,000. Can you imagine losing $25,000 and the house you want because your agent is working a part-time job elsewhere? Scary!
Not having enough money for closing costs
Buyers must show so many financial documents to lenders in order to prove that they can purchase a home. However, many of these buyers do not think about the money they’ll need for closing costs. It’s really simple—you can get a closing cost estimate from your attorney or title company within minutes. It’s worth it to ask for one so you don’t wind up in a mess!
Sellers trying to take fixtures
This comes up often and I see it even after explaining what items must stay to my sellers. That makes me a bit scared when I’m driving to final walkthroughs. Will everything be there?
Typically, if an item is “screwed or glued” it is a fixture. Lighting, TV mounts (not the TV itself though), home automation, etc. would be fixtures. I’ve also had sellers try to take down fixtures and replace them with other ones. This is not permitted in the contract and also pretty unethical.
If a fixture is important to you, make sure it is an exclusion in your contract.
Sellers not leaving the house in the condition it was in when the buyers entered a contract
Sellers have a duty to maintain the condition of the home from the time the contract is executed to the time the deal is closed. However, life happens and damage can be done to a home during that time. I once had a deal where a leak occurred during this period and did damage to the ceiling. Although it didn’t leave much of a mess, the moisture meter still showed that there was water there. The seller wasn’t happy that he had to fix it and I was surprised at his reaction. Since appliances (think A/C’s!) can and will break at some point, I just always hope it isn’t in that short window of time.
Buyers not getting a full inspection when there are signs that mold may be present
Mold is scary. Plus, it doesn’t just show up in older condos. It can show up in brand new construction too. If there’s water damage, there’s usually a possibility of mold.
What scares me about mold is that sometimes we can see that there was water damage in a given area of the home so a mold test is a must in my eyes. I just had lunch with another agent that’s a good friend as well. He was telling me how the ceilings were very water stained and a moisture meter showed they were wet! That means there’s a current leak somewhere yet his buyers simply wanted the sellers to fix the leak and they would paint over the stains. No, no, no! This is the worst part—they did not have a mold test done because it would be an extra $350. They’re buying a $450,000 house and skimping on the $350. That scares me as an agent.
Inspectors that don’t know what they’re talking about
There are good REALTORS® and bad REALTORS®. There are also good and bad inspectors and you really do not want the bad ones when you’re buying or selling a home. It’s scary just how bad some can be.
I sold a home in Golden Gate Estates once that was built like a northern cottage (complete with a front porch and a rocking chair). I loved the home. We were having beautiful weather the day I did the listing presentation so the owners had all of the windows open. Wouldn’t you know it—their buyer uses an awful inspector who writes that every window downstairs fails to open. She simply did not know how to open windows with the newer window locks. She also said that the gas stove didn’t work. The deal almost fell apart! Luckily, I was able to go to the home and take video of each of the items she said were defective and send them to the buyer’s agent. It held the deal together but this could have been a disaster.
So how do you get a good inspector? Ask your REALTOR®! I have a list of inspectors I think are great and would be happy to share that list with you.
Buyers choosing a home that I don’t think I could resell later
Maybe the scariest of all items on this list is when buyers fall in love and want to purchase a home that I do not think I could resell for them in the future. There are a lot of reasons why this may happen. Sometimes the house is just so overpriced that the buyers would never get their money back out of it. Other times, the home is just “unique” but not in a good way!
One thing I like to do with these types of purchases is look at the home’s history of when it was bought and sold in the past. It isn’t uncommon at all to see a home that sat on the market for 6 months and didn’t sell, 6 more months without a sale, and then on the 3rd or 4th time around they find a buyer at a discounted price.
Please don’t do this to yourself. I will absolutely tell you my thoughts on reselling a house you’re looking to purchase.