Buying a Home: 5 Contract Bloopers
When you think about buying a car, there's the fun part of looking at and test driving deals on wheels, but when a deal is initially struck, now comes the paperwork and more considerations. You get to make choices.
When you're buying a home, it's significantly different as once you're handed the keys there is no more room for change and no recourse. There's no lemon law for real estate.
Here are some examples of contract bloopers, and why choosing a Realtor carefully is important. As with any profession, you have varying levels of skill, expertise and knowledge. Our Realtors are frequently trained and mentored to continually raise the bar concerning care of clients and satisfaction.
Realtor Tips: Always Get Everything in Writing!
1. Appraisal and Financing: Whenever a buyer is financing, an appraisal is going to be done by the lending institution, and should the appraisal come back for less than the home is worth, your Realtor can help save time and sour pickles if the contract verbiage includes contingencies. Thankfully, this contingency is already on many Ohio real estate board's standard contracts.
Realtor Tip: In Ohio and mostly likely many other states, the banks no longer get to choose their own appraisers, but are randomly selected through a process and you don't know if they are familiar with the area and local housing market. Realtors have a good chance of successfully arguing the appraisal price if they do the due diligence, and demonstrate a fair market value having conducted a CMA, or comparative market analysis and can provide a professional report of factual data for consideration. This is a process of examining and averaging asking, sold and expired prices for homes in the area matching feature to feature; expired simply being over-priced.
2. Home Inspections: When you are buying a home, the single most costly investment that you will ever make, it is in your best interest to have the home inspected by a professional company. The standard time allotted to conduct inspections is 10 days post an accepted contract. A whole house inspector is a "jack of all trades and a master of none". A whole house inspection might raise concerns about a damaged fireplace that needs further evaluation by a chimney inspector, which will eat into the 10 day inspection period. It is best to get your whole house inspection done early in the inspection period to allow for any additional inspections that might be needed.
3. Appliances: The MLS states that a oven/range, microwave, refrigerator, washer/dryer are included with the sale of the home. According to the Ohio Association of Realtors, unless the appliances are written into the purchase contract, they are not considered to be officially included in the transaction. An unscrupulous seller may or may not leave them behind for the buyer.
Realtor Tip: Make sure that you write any/all appliances into the purchase agreement. You can even take it a step further to fully protect your client by inserting the model # and serial # of each appliance on the contract. Just because you write down a refrigerator for example, that does not guarantee that your buyer will receive the 3-door, $3000 stainless steel refrigerator that was in the home at the time of the viewing. Your buyer could very easily end up with a white $200 clunker!
4. Home Warranty: There are several reputable home warranty companies available to help insure the home that you are buying is protected for at least a year against unexpected repairs and replacements. If the seller is not already offering a home warranty, a savvy Realtor will request that one be included as part of the purchase agreement. Even if the seller refuses to include one, a buyer's agent can assist you with selecting a plan that will suit your needs. Our company has an affiliation with 2-10 Home Warranty and they have a proven track record for customer satisfaction when it comes to claims being made and paid. Their basic plan starts at $399 but can go higher depending upon which options might be added.
5. Contract Dates: The dates contained in a purchase contract are there for many reasons. It is your Realtor's responsibility to insure that all "dates and deadlines" are adhered to perfectly. If your home inspection deadline is 10 days post seller acceptance of the contract and you are running behind on getting them done, your Realtor must present an "extension of inspection period" document to you for your signature and then submit to the listing agent to obtain the seller's signature as well. If this is not done and you've gone past the "inspection period" deadline, you are now under contract to purchase the home "as is" with no further recourse to getting any repairs done. If your closing deadline is October 15th and you are quickly approaching the deadline and it is obvious that you will not be able to close by that time, your Realtor must present and obtain both parties signatures for a "closing date extension". If you pass the deadline, you are officially out of contract and the seller can sell their home to another buyer instead.
The items mentioned above should help you understand just a few of the important things when buying a home. It is always in your best interest to work with a professional buyer's agent, such as myself, when entering into the most expensive transaction of your lifetime!
Lastly, when choosing a Realtor, don't be afraid to ask questions of them to find out if they are indeed qualified to help you with your purchase transaction. And by all means, (this will be sure to upset a few Realtors) do not call upon the listing agent of a home to help you with the purchase. The listing agent has already established a working relationship with the home owner and promised them to sell their home for the most money. Don't you think it might be a bit cloudy if you became their client also?
Listing agents that become dual agents are bound by the Standard of Practice to represent both parties equally and without prejudice, but can you truly be assured this will be the case? If you were in a courtroom, would you hire the same attorney the defendant is using? Not that we are attorneys, but I've mentioned this scenario in the past and it seems to get the point across loud and clear.
The seller is responsible for a buyer's agent's real estate brokerage commissions, so why not have your own representation and protection?