Jim Valentine: Unintended Consequences and Surprises
Jim Valentine on real estate
Inspections and investigations are one of the most common sources of surprises in escrow. One area that is often overlooked is water quality. If you get a VA loan, you should know that you have to prove that the water meets drinking standards even if you are on a water system. We recently learned that a receiver was ready to close when it was learned that the water had a slightly elevated arsenic content. The house is on a water system and the water company has told sellers and buyers that it is their responsibility to filter the house, not the water companies to filter all of their water. Escrow is delayed while a filter is installed and the water is tested.
If you are looking for a loan with land as collateral, you should know that there are not many land lenders these days. There are a few and their programs are very different. No matter who you use, make sure you fully understand the implications of the loan. You probably won’t be able to charge the interest expense on your tax return for such a loan. If you want to benefit from the interest payment for tax purposes, you must use your principal residence to guarantee the loan. If you have a loan in place, you can use a home equity loan to accomplish this if you have enough equity to cover your borrowing needs to complete the purchase.
As-is sales are quite common these days as buyers position their offering to be competitive. It is important for everyone to understand that the addendum as is does not compel the buyer to purchase under any circumstances, but rather encourages them to be inspected and informs them that they can abandon the transaction if they wish. . When the test results are available, it may be necessary to renegotiate the transaction. This occurs when significant life safety issues are revealed by inspection, or significantly more work than was visible and/or expected. Sellers often work with buyers in such situations to accommodate surprises to a point where the buyer is closer to getting what they originally bargained for.
One area that can be confusing is lawn art. Homeowners often collect items to display outside their homes, i.e. gnomes, carts, statues, etc. If you see something around the property that you want to make sure is included, be sure to include it in your offer so you don’t find yourself in the awkward position of chasing gnomes around the countryside.
The comfort of a hot tub is very relaxing, but managing them in a real estate transaction can be stressful. They are big and heavy, and it seems like most of the time a seller wants to leave it, the buyer doesn’t and vice versa. Fun little dance that continues, so be sure to specify in advance how you want it handled in your escrow, whether you’re buying or selling.
Most real estate issues have to do with getting what you bargained for. It can be value or features/items, but it’s what you think you bought. Do everything you can from the start to ensure your peace of mind at the end of the transaction, because your paper trail will be the guide you and your counterparts will follow on the way to closing. This will give everyone a common working basis.
Be upfront with your agent and make sure they know your thoughts on things as they go. He is responsible for recording your wishes in the offer, but he must know them to do so. If you want something included or excluded, share your thoughts so the offer represents what you want.
When it comes to choosing professionals to help you with your real estate needs… experience is priceless! Jim Valentine, RE/MAX Realty Affiliates, BS.3481, 775-781-3704. [email protected]