I've seen this twice in the last month and I'm sure there are at least a couple of people out there who could have used this little note before they started negotiating on a foreclosed property.
Here's what I'm talking about. Buyers go looking for a good deal on a house. They decide they really like a foreclosed property. The home is listed at a very reasonable price. Knowing that the mortgage company is anxious to sell they throw a low offer. The mortgage company won't drop that much, but the buyer still likes the house and doesn't move on to something else. Thinking they are the only game in town they sit tight.
While the buyer plays tough and sticks to their guns another buyer swoops in. The mortgage company requests competitive offers and the house ends up selling for thousands more than the mortgage company's last counter offer to the original buyer.
The original buyer may or may not end up with the house.
If you like a house and you would feel bad if someone else bought it, don't ever delay in signing papers unless you must. This holds true with any real estate transaction. The larger the time frame involved, the larger the chance something can come along to make it fall apart. Get the papers signed, sealed delivered, earnest money deposited and inspections done and the house off MLS and off the market.
Close on it as soon as you can.
I'm not suggesting you plunge forward willy nilly. Understanding what you are getting into and having an inspection are important, but when there is a delay, ask yourself why and whether it is to your advantage. Introducing delays is introducing unknowns. Gambling on those unknowns is more risky than the casino.
Tuesday, March 18, 2008
Friday, March 14, 2008
Foreclosures & Multiple Offers
I've seen this twice in the last month and I'm sure there are at least a couple of people out there who could have used this little note before they started negotiating on a foreclosed property.
Here's what I'm talking about. Buyers go looking for a good deal on a house. They decide they really like a foreclosed property. The home is listed at a very good price. Knowing that the mortgage company is anxious to sell they throw a very low offer. The mortgage company won't drop that much, but the buyer still likes the house and doesn't move on. Thinking they are the only game in town they sit tight.
While the buyer plays tough and sticks to their guns another buyer swoops in. The mortgage company requests competitive offers and the house ends up selling for thousands more than the mortgage companies last counter.
The original buyer may or may not end up with the house.
If you like a house and you would feel bad if someone else bought it, don't ever delay in signing papers unless you must. This holds true with any real estate transaction. The larger the time frame involved, the larger the chance something can come along to make it fall apart. Get the papers signed, sealed delivered, earnest money deposited and inspections done and the house off MLS and off the market.
Close on it as soon as you can.
I'm not suggesting you plunge forward willy nilly. Understanding what you are getting into and having an inspection are important, but when there is a delay, ask yourself why and if it is to your advantage. Introducing delays is introducing unknowns and gambling on those unknowns is more risky than the casino.
Here's what I'm talking about. Buyers go looking for a good deal on a house. They decide they really like a foreclosed property. The home is listed at a very good price. Knowing that the mortgage company is anxious to sell they throw a very low offer. The mortgage company won't drop that much, but the buyer still likes the house and doesn't move on. Thinking they are the only game in town they sit tight.
While the buyer plays tough and sticks to their guns another buyer swoops in. The mortgage company requests competitive offers and the house ends up selling for thousands more than the mortgage companies last counter.
The original buyer may or may not end up with the house.
If you like a house and you would feel bad if someone else bought it, don't ever delay in signing papers unless you must. This holds true with any real estate transaction. The larger the time frame involved, the larger the chance something can come along to make it fall apart. Get the papers signed, sealed delivered, earnest money deposited and inspections done and the house off MLS and off the market.
Close on it as soon as you can.
I'm not suggesting you plunge forward willy nilly. Understanding what you are getting into and having an inspection are important, but when there is a delay, ask yourself why and if it is to your advantage. Introducing delays is introducing unknowns and gambling on those unknowns is more risky than the casino.
Monday, March 10, 2008
Wet Basements
The days have gotten longer and Spring can't be far away. With Spring there is running water. With all of that running water around some of it is going to end up in people's basements. A wet basement is not the end of the world, but it would be a good idea to know how wet and where its wet before you purchase a house that has had water in the basement.
With all of the disclosure laws these days it seems that we have fewer water in the basement disputes. As a buyer water in the basement still could still cause a problem for you. When the little box on the Seller's disclosure next to "wet basement" is checked, yes, you should look carefully and ask a few extra questions. Where exactly did the water come in? What exactly was done to correct the problem? Did water come in after corrections where made? Did the previous owner disclose water probelms to the current owners when they purchased the house?
Many wet basements can be dried out with simple landscaping changes, some can not. I once sold a commercial building that had an access panel in the basement floor. Under the panel there was a constant flow of water. A few blocks south there was a home that always had water in the basement. I've learned that both the commercial building and the house were built over a creek that was filled in way back in the 1800's. The creek is still there, it's just underground. Those basements will never be dry.
Homes built on clay soil or in areas with a high water table are more likely to have wet basements. If you ask around you will find people from the area are generally aware of these situations. Somone in the city engineering department should certainly know about problem areas in town.
I have been in old homes with seemingly dry basements, but when it rains a rivlet of water runs in and harmlessly down the drain. Harmless as long as the basement isn't finished or as long as no one stores anything in the path of the water.
When you are looking at homes pay attention to things like mops and buckets in the basement, boxes stored on pallets or areas where nothing is stored. Look for powdery white "efforvesence" on the walls or stains on the floors.
Outside look for plants growing out of gutters, downspouts that are off or that empty inside of landscape edging. Take note of if the ground slopes away from the house. If there is concrete near the house does it slope away? Has somebody caulked cracks in the concrete near the foundation?
These situations are all common in older homes, but they are flags to be on the lookout for a basement with water problems. Asking a few extra questions so that you know what you are getting could save you a lot of future grief.
With all of the disclosure laws these days it seems that we have fewer water in the basement disputes. As a buyer water in the basement still could still cause a problem for you. When the little box on the Seller's disclosure next to "wet basement" is checked, yes, you should look carefully and ask a few extra questions. Where exactly did the water come in? What exactly was done to correct the problem? Did water come in after corrections where made? Did the previous owner disclose water probelms to the current owners when they purchased the house?
Many wet basements can be dried out with simple landscaping changes, some can not. I once sold a commercial building that had an access panel in the basement floor. Under the panel there was a constant flow of water. A few blocks south there was a home that always had water in the basement. I've learned that both the commercial building and the house were built over a creek that was filled in way back in the 1800's. The creek is still there, it's just underground. Those basements will never be dry.
Homes built on clay soil or in areas with a high water table are more likely to have wet basements. If you ask around you will find people from the area are generally aware of these situations. Somone in the city engineering department should certainly know about problem areas in town.
I have been in old homes with seemingly dry basements, but when it rains a rivlet of water runs in and harmlessly down the drain. Harmless as long as the basement isn't finished or as long as no one stores anything in the path of the water.
When you are looking at homes pay attention to things like mops and buckets in the basement, boxes stored on pallets or areas where nothing is stored. Look for powdery white "efforvesence" on the walls or stains on the floors.
Outside look for plants growing out of gutters, downspouts that are off or that empty inside of landscape edging. Take note of if the ground slopes away from the house. If there is concrete near the house does it slope away? Has somebody caulked cracks in the concrete near the foundation?
These situations are all common in older homes, but they are flags to be on the lookout for a basement with water problems. Asking a few extra questions so that you know what you are getting could save you a lot of future grief.
Sunday, March 2, 2008
Water Bills
Unpaid water bills are an issue that is coming up more frequently because of the number of foreclosure homes that are being sold. Water bills are different from other utility bills. Water is typically provided by the city rather than a utility company. The city always collects water bills, they never get "stuck". This is because the city has a tool that other utilities don't have. They can assess outstanding water bills against the property just like taxes. If you refuse to pay a water bill it will eventually be assessed to the taxes for the property. If you don't pay your real estate taxes you lose your house. The city doesn't care who used the water, they just want payment.
When you purchase a foreclosure, the bank should have paid the water bill, but it doesn't always happen that way. If the previous owner had their water shut off for non-payment and no one ever turned the water back on it's likely there is a water bill out there somewhere.
The title company might find it when they do a title search if its been attached to the taxes, but it could easily be missed. The only way to know for sure is to talk to the water department and verify all water bills have been paid for the property before closing.
When you purchase a foreclosure, the bank should have paid the water bill, but it doesn't always happen that way. If the previous owner had their water shut off for non-payment and no one ever turned the water back on it's likely there is a water bill out there somewhere.
The title company might find it when they do a title search if its been attached to the taxes, but it could easily be missed. The only way to know for sure is to talk to the water department and verify all water bills have been paid for the property before closing.
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