Tallahassee Real
Estate For Sale - FAQ
Why should I use a realtor to sell my home or real
estate?
• A "realtor" can help you determine how much home you
can afford. Often a REALTOR® can suggest ways to accrue the
down payment and explain alternative financing methods.
• A "realtor", in addition to knowing the local money
market, also can tell you what personal and financial data
to bring with you when you apply for a loan.
• A "realtor" is already familiar with current real estate
values, taxes, utility costs, municipal services and
facilities, and may be aware of local zoning changes that
could affect your decision to buy.
• A "realtor" can usually research your housing needs in
advance through a Multiple Listing Service--even if you are
relocating from another city.
• A "realtor" can show you only those homes best suited to
your needs--size, style, features, location, accessibility
to schools, transportation, shopping and other personal
preferences.
• A "realtor" often can suggest simple, imaginative changes
that make a home more suitable for you and improve its
utility and value.
• A "realtor" is sensitive to the importance you place on
this major commitment you are about to make. Look for a real
estate professional to facilitate negotiation of a win-win
agreement that will satisfy both you and the seller.
What are you looking for?
A home is more than just a collection of bedrooms and
bathrooms. Several properties -- each with four bedrooms,
three baths, and the same price -- may well represent
radically different designs, commuting distances, lot sizes,
tax costs, interior dimensions, and exterior finishes.
Can you really afford it?
Get "Pre-approved". That means you have met with a loan
officer, your credit files have been reviewed and the loan
officer believes you can readily qualify for a given loan
amount with one or more specific mortgage programs. Based on
this information, the lender will provide a pre-approval
letter, which shows your borrowing power. You can visit as
many lenders as you like and get several pre-approvals, but
keep in mind that each one carries with it a new credit
check, which will show up on future credit reports.
- the pre-approval process? Getting pre-approved means you
have a very good idea of how much you can borrow, what loan
programs will most likely work best in your situation and
how much home you can afford.
How reliable is a pre-approval?
While pre-approval is not a loan commitment, it's still
necessary for lenders to check such items as appraisals and
the latest credit reports. Despite fluctuating interest
rates, pre-approval nonetheless provides a reasoned, careful
analysis of what you can afford. After all, loan officers
are routinely paid only when loans are originated. It
doesn't make much sense for loan officers to suggest high
loan limits that later can't be delivered.
While much attention is spent on offering prices, a proposal
to buy includes both the price and terms. In some cases,
terms can represent thousands of dollars in additional value
for buyers -- or additional costs. Terms are extremely
important and should be carefully reviewed.
How much?
You sometimes hear that the amount of your offer should
be x percent below the seller's asking price or y percent
less than you're really willing to pay. In practice, the
offer depends on the basic laws of supply and demand: If
many buyers are competing for homes, then sellers will
likely get full-price offers and sometimes even more. If
demand is weak, then offers below the asking price may be in
order.
How do you make an offer?
The process of making offers varies around the country.
In a typical situation, you will complete an offer that the
realtor will present to the owner and the owner's
representative. The owner, in turn, may accept the offer,
reject it or make a counter-offer.
How can I make my offer more attractive to the sellers?
Offer the highest price you can. Get pre-approved, not
just pre- qualified, for your mortgage and attach a copy of
the pre-approval letter to your offer. Make as large a down
payment as you can and provide documentation showing the
source of your down payment (e.g., a bank statement). If
your current home is in escrow, provide information about
that transaction. Avoid unnecessary contingencies. (Waiving
your inspection or financing contingency can make your offer
attractive, but it's foolish.)
Why do I need a Home Inspection and Appraisal?
Getting a good inspector to inspect the house before
buying is essential. Sellers may cover up major problem
areas in the house. So it is in your best interest to get a
good inspection, but the lender will most likely require one
as well. The lender will not want to take risk on a house,
if they are not confident that you are getting the house at
a good price without any unforeseen problems (certain loans
will only require a drive-by inspection).
Who is responsible for making repairs, if any, as a
result of the inspections?
The fact that the buyer orders one of more inspections of
the home for informational purposes doesn't obligate the
seller to make repairs or modifications as a result of those
inspections. In practice, however, inspection reports often
are used to negotiate repairs of major problems or safety or
environmental hazards that may be noted. The purchase
contract should provide some guidance for these
negotiations.
What are the cutoff dates for inspections and approvals
of the inspection reports?
A typical contract provides an opportunity for the buyer
to hire all manner of experts to check out the condition of
the home. From the buyer's perspective, the more time that's
allowed for these once-overs, the better. Sellers, on the
other hand, usually want the inspections to be completed and
signed off as soon as possible.
How do you get insurance?
The time to obtain insurance and warranty coverage is at
closing, so speak with a realtor or insurance broker prior
to closing. Be sure to ask about limitations, costs,
deductibles and "endorsements" (additional forms of coverage
that may be available).
What kind of insurance are there and how much do they
cost?
There are various forms of insurance associated with home
ownership, including these major types:
Title insurance: Purchased with a one-time fee at
closing, title insurance protects owners in the event that
title to the property is found to be invalid. Coverage
includes "lenders" policies, which protect buyers up to the
mortgage value of the property, and "owners" coverage, which
protects owners up to the purchase price. In other words,
"owners" coverage protects both the mortgage amount and the
value of the down payment.
Homeowners' insurance provides fire, theft and liability
coverage. Homeowners' policies are required by lenders and
often cover a surprising number of items, including in some
cases such property as wedding rings, furniture and home
office equipment.
Flood insurance: Generally required in high-risk
flood-prone areas, this insurance is issued by the federal
government and provides as much as $250,000 in coverage for
a single-family home plus $100,000 for contents. Local
realtors can explain which locations require such coverage.
Home warranties with new homes, buyers want assurance
that if something goes wrong after completion the builder
will be there to make repairs. But what if the builder
refuses to do the work or goes out of business?
Home warranties bought from third parties by home
builders are generally designed to provide several forms of
protection: workmanship for the first year, mechanical
problems such as plumbing and wiring for the first two
years, and structural defects for up to 10 years. Home
warranties for existing homes are typically one-year service
agreements purchased by sellers. In the event of a covered
defect or breakdown, the warranty firm will step in and make
the repair or cover its cost.
Insurance policies and warranties have limitations and
individual programs have different levels of coverage,
deductibles and costs.
When is escrow scheduled to close?
Pay attention to this date! If you're selling your home,
you'll be expected to move out completely before the
property changes hands. You'll want to make sure the closing
date doesn't fall before you're able to move into your next
residence. If you're buying a home, you'll be able to pick
up the keys on the day escrow closes. You'll want to make
sure you don't give up your prior residence too soon. Don't
cut the dates too close. Many escrows end up closing a day
or two later than the contract states--but that can happen
only with the mutual agreement of the buyer and seller.
Is the seller making any representations or warranties
regarding the condition of the property?
In some contracts, the seller warrants that specified
major components of the home (e.g., the roof or central
heating or cooling system) are in good repair and working
order at the close of escrow. Buyers should understand which
components of the home are guaranteed and which are being
sold "as-is."
Will a home warranty plan be purchased?
A home warranty plan is a sort of limited insurance
policy covering the basic major systems and appliances in
the home. It may seem like a prize for the buyers, but it's
equally important for the sellers and the real estate broker
representing the sellers. In fact, these warranty plans are
so popular among real estate agents that many of them will
pick up the tab for the program in order to insulate
themselves from irate buyers.
Can I submit an offer on a home in escrow?
Yes, but agents say you would be wiser to move on to another
home, particularly if there are formal back-up offers. Even
if your offer tops the accepted agreement, the sellers would
have great difficulty canceling the escrow.
My offer didn't prevail in a multiple offer situation.
Can I find out why?
Neither the sellers nor their agent is obligated to reveal
any information about the decision. As a courtesy, agents
frequently will point out shortcomings of a rejected offer,
but without disclosing details of the accepted offer. Until
a transaction is closed, it's crucial that everything remain
unknown in case that property has to come back on the
market.
What furniture, fixtures and appliances, if any, are
being sold with the property?
Technically, anything that's permanently affixed to or
installed in the home is real property. Everything else is
the seller's personal property. This distinction is a narrow
one and it naturally leads to a fair amount of confusion.
Are built-in appliances real property or personal property?
What about a shelving system? A chandelier? Window
coverings? Potted plants in the backyard? Sellers who intend
to remove anything that's attached to the home should have
that spelled out in the contract. And the same goes for
buyers who expect to acquire any of the furniture or other
movables.
What are the estimated transaction costs and who will pay
for what?
Typical costs include the brokers' commission, a home
inspection, a termite inspection, escrow or attorney's fees,
a title search, an owner's title insurance policy, transfer
taxes and recording fees. The price tags on these items vary
greatly around the country. Who pays for what is a matter of
both local custom and negotiation.
How do you get a loan?
To obtain a loan you must complete a written loan
application and provide supporting documentation. Specific
documents include recent pay stubs, rental checks and tax
returns for the past two or three years if you are
self-employed. During the pre-qualification procedure, the
loan officer will describe the type of paperwork required.
Where do you get a loan?
Mortgage financing can be obtained from mortgage bankers,
mortgage brokers, savings and loan associations, mutual
savings banks, commercial banks, credit unions, and
insurance companies. A growing number of realtors can also
arrange financing.
Is there a mortgage financing contingency and how
specific is it?
The mortgage escape clause is a must for buyers, unless
they're paying all cash for the home. Without this
contingency, buyers can be legally obligated to purchase the
home even if they can't obtain financing. Further, an
open-ended statement that says the buyer will obtain a loan
"at the prevailing rate of interest" leaves the buyer
completely exposed to interest rate fluctuations. A
statement that says the loan must be at an interest rate
"not to exceed xx percent" and on specified terms is
preferable.
What will happen if either side breaches the contract?
Unless an unmet contingency triggers the abandonment of
the contract, it's a binding legal document. Buyers who fail
to perform can lose their deposit money. Sellers who try to
back out can be sued for "specific performance," which
forces the sale of the home to the buyer. Many contracts
also specify that disputes must be brought in small-claims
court or presented for arbitration or mediation |
