Real Estate Transactions = Continuing Ed
Each and every real estate transaction is a learning experience! Here are a few stickee notes to add to your collection of things to remember.
This Seasoned Realtor, pictured left, has learned a few tips to pass on to fellow Realtors and consumers.
Thinking about purchasing a foreclosure?
When the foreclosing bank (Seller) wants a fast closing - like close within 30 days - there are a few considerations if the property is situated in a community with a homeowners association.
Most likely, the Seller/Foreclosing Bank works with a contract that it has generated and does not allow for any options to change any parts of that contract. It is as is. "As is" happens to be the often used term in foreclosure sales!
Tip #1: read every clause of that contract carefully, preferably with attorney review, and search for any language that presents any ambiguity.
Before signing that contract, be sure any item that presents any ambiguity is defined before signing that contract, because the Buyer does not have the option to change the language when it is a as is contract.
Reviewing a contract closely, of course, is important in every situation, but even more so when there are no options for altering the terms before signing. Be careful of clauses that can be broadly interpreted.
Tip #2: In the Commonwealth of Pennsylvania, if a property is being sold that lies within a community with a homeowners association, it is required that the Seller provide the Buyer with a "Resale Packet & Certificate" that informs the Buyer about the rules and bylaws of the association, information about the property itself, dues and fees, and ANY MONIES THAT ARE DUE AND OWING. It is common practice in PA that the Seller pay the cost for the Resale Certificate (generally about $150), and clear up past due amounts.
The Resale Packet has to be applied for within a certain period of time after signing of contract, and produced by the homeowners association within a certain timeframe. When working within a 30 day window of time to close, the Buyer can be near closing before having the Resale Certificate and package in hand. Monies have probably already been expended for inspection fees and the mortgage application if financing.
Here is where Tip #1 and Tip #2 play hand-in-hand:
That ambiguous language in the Seller generated contract, which can be broadly interepreted, may put the burden of the cost of the Resale Packet and past due amounts still owed to the homeowners association on the Buyer!
What the Seasoned Realtor, pictured above, should do when representing the Buyer:
Don't wait for that Resale Certificate to be presented! Call the homeonwers association prior to signing the contract and find out what is due and owing. And understand with clarity all the terms of the contract the Buyer is signing.
The Buyer should be fully aware of these costs, and perhaps made part of the estimate of closing costs, before signing on for the deal. In a foreclosure, there can potentially be significant amounts of monies owed to the homeowners association, and it is important to clarify if the Buyer or Seller is paying them, regardless of what common practice is in PA.
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