A few weeks ago we examined how appraisals can kill the deal. This week we thought we would share a few other surprises that could stop your home purchase.
Your lender demands home repairs
In this fussier climate, lenders may hold up a sale if the appraiser points out even minor repairs that need to be done. We know a lender from another state who once delayed a home purchase until window screens could be installed.
The screens, included in the purchase contract, were nowhere in evidence. The appraiser pointed out the omission, so the bank's rules compelled him to withhold the loan. Loan documents were delayed until the builder put up the screens and the appraiser signed off.
There's nothing new in lenders insisting that homes they finance be in shipshape, but a few years ago, a lender might let the buyer and seller agree to complete the sale and fix any minor problems later, paying for them out of the seller's proceeds held in escrow. Today's buyers and sellers are rarely given that kind of slack.
Pre-emptive action: To anticipate issues an appraiser might raise, scrutinize the home inspector's report for any potential problems with the property. Also, be certain all conditions listed in your purchase and sale agreement are met.
The home has baggage
Remember any boyfriends or girlfriends from your past for whom you fell for before realizing that he or she had deep "issues"? Homes can be like that, too. Some come with baggage.
Any surprises usually crop up when a title search is done to clear the way for your purchase.
For example, there's a chance, given all the financial turmoil these days, that someone besides your seller has a claim on the house. For this reason, many deals today are not clean and easy. For example you may see:
- A bankruptcy — not uncommon these days — may have produced creditors who have filed claims against the home to get what's owed them.
- Your seller may have argued with a contractor who did work on the house years ago. Contractors or suppliers with beefs against the owner can file mechanic's liens against the property, preventing it from being sold until the claim is settled.
- Maybe the seller lost a lawsuit and failed to pay — or perhaps didn't know about — a court judgment worth thousands of dollars. You can't buy the home until the debt is satisfied. Ditto for unpaid child support or alimony.
Missing permits are another deal-stopper. Sellers occasionally complete do-it-yourself remodeling and think, "What the heck, I don't need those expensive permits." But they do. Typically, the real-estate agent listing the home makes sure all permits are in order. But sometimes this escapes notice.
Occasionally, buyers are shocked to learn that the boundaries of the property they're buying aren't correct. Maybe the seller built a carport, addition, shed or fence that crossed onto a neighboring property. No one's the wiser until your title search uncovers the error, but you can't buy the place until the error is corrected. The seller may have to tear down the structure or negotiate with the neighbors to buy or sell a few feet of land. These problems can set back your purchase or end it altogether.
Pre-emptive action: Buy title insurance. We've run into situations where errors have come out of the woodwork years later. With insurance, your claim to your home is protected. WARNING: If an insurer declines to insure the title of a home you want to buy, walk away from the deal.
I’ll say it again, it’s important to be prepared when buying a home. For this reason, we’ve provided you with a free simple 10 step guide to the buying process.
Simply visit the link below for more information on how to get it.
http://www.buyingahomeinlascruces.com/home_buyers_guide_intro.php
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