FOR HOME BUYERS - TIPS FOR MAKING WISE HOME BUYING DECISIONS.

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FOR HOME BUYERS - TIPS FOR MAKING WISE HOME BUYING DECISIONS.

REAL ESTATE SECRETS THE AGENT MAY NOT TELL YOU (Originally published September 6, 2007. The market has changed dramatically and so have some of the tips below.)

WHAT A REAL ESTATE PROFESSIONAL MAY NOT TELL YOU CAN BE
DANGEROUS TO YOUR HOME BUYING HEALTH.

Sound serious?? We hope so. The important thing is for us to get your attention before you hit the road with a real estate agent that may not be working in your best interest. Consider the following:

Secret: Dark roofs often do not last as long as light colored roofs. Further, light roofs reduce air conditioning costs by Homes in MD and VA reflecting sunlight. Your home inspector will estimate the remaining expected life of the roof as a part of the home inspection.

Secret: Attics were meant for ventilation. If you store belongings in the attic of a home, you may reduce the life of the roof. Ventilation prevents moisture and mold growth in attics.

Secret: If you put flooring over the insulation in your attic floor, you may reduce the insulation properties of the material. Insulation works best when loose and deep.

Secret: Interest on your mortgage loan and real estate taxes are deducted from your gross income before computing your income tax. Wow.

Secret: Your home inspector cannot order repairs. Unless agreed in writing, the seller can agree, refuse or negotiate repairs.

Secret: The agent's whose name is on the FOR SALEsign in the yard has promised the seller that he/she will get the best price for the seller. The only information required of a seller's representative would be "material defects". General condition of a property should be obtained the a home inspection with a contingency to void the contract if the house has serious maintenance, structural problems.

Secret: You can avoid Private Mortgage Insurance with down payments of less than 80% by using the 80/20 loan or 80/15/5 loan. Many loan instruments popular in the past that helped home buyers avoid Private Mortgage Insurance are no longer available. FHA and VA financing has gained in popularity with higher loan limits.

Secret: Radon inspections are inexpensive and Radon remediation averages about $1,500 or less.

Radon Map Zone 1 = High

Fix your home if your radon level is 4 picoCuries per liter (pCi/L) or higher. Radon levels less than 4 pCi/L still pose a risk, and in many cases may be reduced.

Secret: Earnest money deposits may be forfeited if a buyer falsely represents his/her financial ability to obtain financing. Buyers who do not cooperate with the financing paragraphs and cause the seller to keep the home off market have caused the seller serious damages and may not get their earnest mondy deposit refunded.

Secret: Real estate agents who work for companies that own lenders, title companies, termite companies, etc. often receive benefits for referrals to those affiliates.

Secret: Termite Warranties do not protect your home from termite damage. Termites cannot read.

Secret: The advertisement for homes for sale in the newspaper, home magazines are placed there by the agent that works for the seller.

Secret: Sellers cannot hide material defects by not providing a Property Condition Disclosure Statement. A material defect is a condition that would or may affect the value of the real estate or present a safety hazard.

Secret: Oral statements are not binding.

Secret: There is no cooling off period or rescission period unless it is written into the contract. Once the contract is signed and accepted by both parties, it is a legally binding document.

Secret: Personal property does not convey with the real estate. Washer/dryer, etc.must be written in the contract to convey.

Secret: In most states, agents must disclose in writing which party, if any, they represent.

Secret: When sellers with dog and cat pets move out, they often leave a growing infestation of fleas behind.

Secret: In most states, real estate conveys "as is", meaning - What you see is what you get. However, at the final pre-settlement walk through, appliances, heating/cooling electrical and plumbing must operate as the manufacturer intended. The "as is" condition may be conditioned on an acceptable home inspection.

Secret: If the furnace filter is very dirty, that is a good indication of poor maintenance.

Secret: Carpet replacement does not always eliminate pet odor. Carpet "allowances" may not always be permitted with certain types of financing. Serious home inspections should be made of homes for sale with pets in residence.

Secret: Home owner additions may not have been code/safety inspected by the county. Who inspected the homeowner installed electrical wiring behind that finished basement wall. Subsequent owners may have to remove additions, upgrades, etc. if code violations are discovered. Or, the county may perform "after the fact" code inspections.

Secret: Foreclosures do not always (or even often) sell for less than market. They often sell for more than similar homes in the area. Foreclosures are usually priced based on an appraisal or comparable sales in the area and then "discounted" for condition.

Watch out for pet odors when selecting a home to buy.

Secret: Most new home contracts do not have financing contingencies for buyers.

Secret: Conventional loans with less than a 20% down payment usually will require that buyers pay for Private Mortgage Insurance; FHA loans are insured by HUD; VA loans (or a percentage of the loan) are guaranteed by the Veterans Administration.

Secret: Only a buyer's agent can help you negotiate the best possible price, terms and conditions for a home you want to buy. Seller's agent (listing agent) is obligated to obtain the best price, terms and conditions for the seller.

Secret: Homes constructed prior to 1978 may contain lead based paint. You can have a home inspected for lead based paint before or after settlement. Sellers do not have to agree to mitigate lead based paint.

Secret: Termites gain access to many homes through mulch used in landscaping beds.

Secret: Most co-workers fib about their commute time.

Secret: Offers to purchase real estate that are not in writing may not be enforceable.

Secret: Offers to negotiate the price of a home listed for sale have a much higher likelihood of being accepted than an oral offer.

Secret: Short Sale contracts between a buyer and a seller/owner are contingent on acceptance by a "third party" which is the owner/seller's lender. A buyer may cancel a short sale contract up until the time a seller's lender has approved the contract and the buyer's deposit money should not be deposited until the owner/seller's lender has removed the "third party" contingency.

Secret: Foreclosures sold by banks favor investment buyers using with cash or with high down payments, no home inspections and/or quick settlement times.

Courtesy: Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-mail.

_______________________________________________________________________________________________________

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Posted by Lenn Harley, Real Estate Broker, Virginia & Maryland on 06/15/2009 06:01 PM

Comments (47)

Tips for Home Buyers in the Home Buying Channel

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47 Comments on FOR HOME BUYERS - TIPS FOR MAKING WISE HOME BUYING DECISIONS.

JUN

2009

That's a long list of good ideas. Roof and termite issues are a very big concern down here.

Lenn - Wow! That is a great list of information and stuff Realtors need to know, I will look is over really good when I get more time and I bookmarked your post!

Lenn - Great list of home buying secrets... The key is good representation and your customers are lucky to have you at the helm.

Lenn - This has got to be the best list of tips I've seen for homebuyers. I think you got everything covered from A-Z.

Lenn- Of course, some of these vary state to state. Florida is not an "as is" presumptuous state.

I am curious, what do you know about the new metal roofs that I see advertised? Do you know anything about those? Energy, heat saving, heat loss, etc?

Great information to post.

Lenn, Great list of secrets but my fave is:

Termite Warranties do not protect your home from termite damage. Termites cannot read

Wow! This is a LOT of information. And I'm sorry to say, I didn't know about the attic storage. In Florida, you rarely find a basement (only on really old homes) so we all use our attics for storage. Buyers frequently ask if the attic is floored, to make sure they have enough storage space.

Great Stuff Lenn, a great read and lots of great tips. I am going to rebog this one.

I went back and read your original post first. Great additions about Short Sales and Foreclosures, two important things that buyer's need to fully understand in today's market. Sadly, I don't think a lot of agents explain either of these to their buyer's.

They also need to understand "yesterdays" financing options their friends all got are history, good job on that tip to the buyer's out there.

Lenn, you are a walking encyclopedia! GREAT buyer info (and for sellers too!). Thanks for sharing.

Now you let the secrets out. I'm guessing most buyers said WOW a few time while reading this.

Lenn as usual..this is great stuff! Common sense dictates paying attention to all of this. This post is a must for all homebuyers. This should be a featured post!

JUN

2009

Lenn - Great list. What is really amusing to me is that I was Googling you a day or two ago just to see how popular you are in Google and I came across your 2007 version of this posting. I think you have it linked on the front pages of one of your websites. Out of all of your postings, you picked this one to repost (and update).

Jim. HA! This didn't get featured in it's first permutation and didn't get featured in this issue. Perhaps I'll try again next year.

I have been asked by about a dozen agents for permission to publish this on their web site. Thanks but no. However, I have given permission for several to print and distribute to their clients or customers.

Marc. I rarely repost my own material. However, this post gets a lot of consumer interest and I wanted to update it with a bit of short sale and foreclosure info.

Katerina. I'm curious. If resale homes in Florida are not sold "as is", what type of warranty do they have?? "As is" is simply a term meaning that the property is not new and doesn't carry the new home warranties.

Metal roofs. The jury is out. They are expensive. I consulted on a listing on a home with a metal roof in MD last year. It was a 50 year Alcoa alum. roof. Ugly as sin. It had also been seriously pitted in a hail storm. The roof was a clear barrier to sale. The price had to be reduced dramatically for the home to sell. I wouldn't recommend them in my area.

TOTOH, a home that recently sold in my county in Virginia had a more simply tin roof installed after purchase and it's lovely. Of course, any metal roof makes a lot of noise in the rain / hail.

Terry. I have gotten a few e-mails about it.

Coleen. I suspect that most of us could create the same type of list. I just enjoy the exercise.

Cris. Indeed. Short sales and foreclosures are such a predominant part of our market these days, it had to be done. I wonder what next year will bring.

Charles. Thank you. I appreciate it.

Lisa. Folks need a shed. I suspect that ventilation can be preserved in an attic that is used for storage if the property preparation is used. One member of my family lives in a small home with attic storage and we put "sleds" to hold the items rather than putting them on the attic deck. You just must have movement of air in an attic.

Barb. Thanks. I can't tell you how many times I've heard a seller say, "There cannot be termites in this house, it's under a warranty". Sadly, they misunderstood the warranty. It just means that if termites get a foot in the door, the company issuing the warranty will treat at a reduced or no fee rate. The termites don't care.

Wendy. Thanks.

Donna. Glad to help.

Ryan. Thanks. I'll spread the word a bit more.

Robert. Thanks. Enjoy.

Neal. I remember my times in Florida. Between the termites, palmetto bugs, scorpions, etc. I believed I was in some bug heaven.

And still mostly true today. Thanks for the post, great stuff!

Great points Lenn. Home Buyers need to know the facts before buying or even looking at homes. This is a great list of secrets they should know.

Paddy. Thanks. Hopefully this list will demonstrate to prospective home buyers why they need a buyer's agent with experience.

This is a good list for consumers AND agents. Thanks for posting and for being so forthcoming with your knowledge.

Susan. Thanks. You're right about "AND agents".

Lenn,

This is a great list for consumers and a good review list for real estate agents. I got a good chuckle from seeing the photo of the cartoon termite and the secret about them not being able to read. Thanks!

Gerry's AR signature

Gerry. Thanks for stopping by.

One thing we know for sure. In MD and Northern Virginia, there is a colony of termites under every house just waiting to find a damp splinter of wood to start chewing.

Wow, Lenn that is a heck of lot of really good information! I think more buyers need to be aware of this, "The agent's whose name is on the FOR SALEsign in the yard has promised the seller that he/she will get the best price for the seller."

Very nice list of "secrets." Brings to mind the ever changing foreclosure/short sale market and it's numerous aspects. (I think I'm working on a post on this very subject!)

I also learned something, too. I didn't know about the roof color. And the attic info was new to me. We don't have too many attics here in Colorado. We do have a plethora of basements, though, with all the associated problems they bring.

Mark. Which is why I'm so surprised that so many home buyers believe that they'll get a better deal with the listing agent.

Marianne. Thanks. Maybe I'll add some basement tips to the next post. I would go back and edit the original posts herein but I understand that you lose a fistfull of points for editing a post.

Great tips Lenn! All the reasons why you should have a buyers agent representing and educating consumers.

Bill. Indeed. Every time I hear of a bad buying experience, it was the buyer working with the listing agent.

Lenn,

Personal property does not convey with the real estate. Washer/dryer, etc.must be written in the contract to convey.

Some buyers here in Tucson paid more than $750,000 for a lovely home in the foothills of the Catalina mountains. Flanking the driveway near the entrance were two beautiful boulders with greens, blues and other colors associated with copper ore. Each had to weigh half a ton.

The sellers took their boulders with them to their new home. The buyers sued and lost. There was a similar case with two huge potted palms that were removed from another home by the sellers.

In both cases, the items were not permanently affixed to the property, were not included in the listing agreement or the contract of sale, and remained the personal property of the seller.

Mike in Tucson

Mike. That's the way it works. If it ain't screwed in, nailed in, built in or installed, it doesn't comvey unless agreed by the parties.

Lenn, I didn't know that!!! You loose points for editing? I know if you delete it you do. Well, it's not really about points...not for me, because I'm very low on the totem pole.

Lenn have you ever thought of writing a book? A primer for home buyers and sellers?

Lenn,

Any home buyer would be a much better home owner if he knew all this. The roof and attic info is common sense but seldom thought about and acted on.

JUN

2009

Lenn- There was this one builder here that tried the metal roof thing, but there was a lot of resistence. Now they have some that look exactly like composition tile. I did not think about the noise when it rains. That is a good point, and it sure rains alot here. The ads talk about hurricane resistance.

We have 2 contracts we use a lot here. One is an AS IS with right to inspect and the other one is a standard repairs contract. As agent we like for liability reasons the AS Is with right to inspect. But there is not a caveat emptor in Florida like in New York for instance.

Perhaps we are talking about 2 different things:)

Marianne. I just found that out a couple of weeks ago. That post I have about agents qualifying buyers got over 225 comments but is stuck at 475 points. The only thing I can figure is that it is because I edited it after a day or so. I've got posts with under 100 comments that are over 600-700 points.

Jim. What's up? Are you encouraging me to stop my job and write a book because we're competitiors? Mmmmmmm.

Esko. Thanks. The roof and attic things are fundamental. I do give these facts to my home buyers. They make their own decisions when they buy a home, but I want them to have the facts.

Katerina. Our standard contract is "as is" with a "property condition" paragraph meaning that things have to operate as intended. Then we have the "as is" with the right to inspect where the seller makes no repairs, which is what short sales and foreclosure banks use. Virginia is a caveat emptor state too.

Good stuff, Lenn. I particularaly like "Termites cannot read". What a hoot!

I'm also running into more and more buyer's agents that want to negotiate terms before they submit anything in writing. I keep hammering home that we can talk about anything they want and the Sellers can promise the moon and the stars but it doesn't mean jack unless it's in writing...so why waste a lot of time with up front "what ifs"? Write it down and send it over!

Ken. The only sensible response to a question about price-terms-conditions is "write it and I'll present it."

What I've found over the years is that many who want to "clear a certain point" want to make low ball offers and just want to see what will fly before they take the time to write. Shucks, make them take the time.

However, the terms and conditions are often more important than the price.

Make them write it.

Good for you.

Lenn, That is probably the most complete list tips I have ever seen! Excellent content from years of research, I can tell...

Aw Gee Paul. I could have gone on and on but there is only so much we can cover in one list that anyone will read.

Perhaps I should break it up into categories and keep going.

Lenn,

We have a lender in our office an d the company gets a benefit and if we refer clients we get referrals on foreclosures etc. AND we must make full disclosure. It's the law here.

Terry. Of course, it's the law everywhere. It's a RESPA matter. The question is "how much pressure is used to steer the buyer to the lender affiliate and when do they get disclosure that there is a relationship. That RESPA disclosure says that the real estate entity MAY benefit from the referral or affiliation. Real disclosure would be to show how much income to the real estate company is received annually from these sources.

Dang, Lenn...I've never had that many posts to my blog entry, or points either. Good for you. But, I have edited posts and not seen any decrease in my points. This sounds like a good question for the AR guru's.

Wow, I have never see a radon map. Always thought that we are in high concentration area, but the map shows that we are pretty safe.

JUN

2009

Marianne. I didn't think of it. I read a post about it. When I had a post with over 225 comments that got 475 points, I figured it was correct, unless. . . . Everyone knows I'm paranoid.

Jon. I'd have suspected low readings in Florida. High Radon is in areas close to subsurface rock formations. We get higher as we get closer to the mountains. The eastern shore is usually low.

JUL

2009

You have shared great info and I thank you for all of it!

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Lenn Harley, Real Estate Broker, Virginia & Maryland

Leesburg, VA

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Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

Address: Lovettsville, Fairfax, Arlington, Alexandria, Stafford, Woodbridge, King George, Fredericksburg, Leesburg in VA., Rockville, Laurel, Columbia, Baltimore, Waldorf, Frederick, Eastern Shore, Bowie, Harford, Annapolis in MD. , Maryland, Virginia

Office Phone: (800) 711-7988

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Maryland and Virginia real estate agents and brokers serving buyers and sellers with experience. Search listings in Maryland and Northern Virginia and get daily updates of new homes for sale by e-mail. Contact Lenn for a tour of homes. REALTORS available every day for home tours. Homefinders network of experienced agents and brokers includes new home specialists, resale specialists and luxury home experts. We can help you with your home buying needs. Homefinders offers discounted 5% listings for Maryland, Northern Virginia home owners. Experienced agents helping buyers and sellers in the Washington Metro area since 1985.

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