I am looking to beat this crazy real estate moment but, to date, nothing has topped it!
I was asked by a seller to write into the contract that she could return to the property to dig up her husband who was buried in the garden. No joke! The seller is a lovely lady who I really admire but I could not bring myself to include it in the agreement of purchase and sale. I believe her husband left with her prior to the closing.
Friday, November 13, 2009
Thursday, November 12, 2009
For Sale By Owner
It was suggested that I write my comments on the perils of attempting to trade in real estate as a private seller or buyer. This is a tough one for me as the potential for looking like I am offering a biased, whining opinion is great.
That said, I always appreciate clients who say "I wouldn't have my dentist fix my car, I think my most valuable investment, my house, should be handled by a professional also".
Prior to obtaining my real estate license, I bought and sold my own homes without proper representation. I thought I had all the information I needed by looking at the houses that sold in my area and looking online at the houses for sale. When I sold my house I had no idea what information I was supposed to disclose and what I should not. I had no idea how to protect my family from potential future lawsuits. I had no idea what strategy I should plan for negotiation based on all the factors involved. (I find that this is where many FSBO sellers fail miserably. They could have sold their property ten times over if they had only known how to properly negotiate the sale.) I also didn't weigh out the complication of dealing with two different lawyers (mine and the buyer's) and the additional costs associated with that as the lawyers were doing a lot more leg work and paperwork.
When I purchased my house I didn't bother to get my own Realtor to represent me. When I look back on it, that was probably the dumbest decision. Selling my house privately was the result of a neighbour offering to purchase my house so it was an opportunity I jumped on. When it came to buying I had options and I didn't think through those options due to my lack of understanding about the real estate world. Without representation I was only guessing at what the best price would be for my "fixer upper". I also didn't opt for a home inspection and didn't fully understand the many upsides of going through with that. The listing realtor didn't give us any indication of what comparable homes were selling for so we had no idea whether what we were paying truly was a "deal". We bought with the plan of doing extensive renovations, however, we were not advised on whether, once we had put $250,000.00 into the house, we would be able to increase the value of our property by that amount. This is another one of the biggest mistakes people make. They buy without advice on the potential future value of a property. I can honestly say that I have NEVER seen a case where the buyers saved money by purchasing through the listing Realtor and not having their own representation.
I could go on to discuss all the horror stories I have encountered when representing buyers who are purchasing a FSBO property but I would prefer to leave it to people telling their own stories.
I welcome you to comment on this post with your own FSBO stories.
That said, I always appreciate clients who say "I wouldn't have my dentist fix my car, I think my most valuable investment, my house, should be handled by a professional also".
Prior to obtaining my real estate license, I bought and sold my own homes without proper representation. I thought I had all the information I needed by looking at the houses that sold in my area and looking online at the houses for sale. When I sold my house I had no idea what information I was supposed to disclose and what I should not. I had no idea how to protect my family from potential future lawsuits. I had no idea what strategy I should plan for negotiation based on all the factors involved. (I find that this is where many FSBO sellers fail miserably. They could have sold their property ten times over if they had only known how to properly negotiate the sale.) I also didn't weigh out the complication of dealing with two different lawyers (mine and the buyer's) and the additional costs associated with that as the lawyers were doing a lot more leg work and paperwork.
When I purchased my house I didn't bother to get my own Realtor to represent me. When I look back on it, that was probably the dumbest decision. Selling my house privately was the result of a neighbour offering to purchase my house so it was an opportunity I jumped on. When it came to buying I had options and I didn't think through those options due to my lack of understanding about the real estate world. Without representation I was only guessing at what the best price would be for my "fixer upper". I also didn't opt for a home inspection and didn't fully understand the many upsides of going through with that. The listing realtor didn't give us any indication of what comparable homes were selling for so we had no idea whether what we were paying truly was a "deal". We bought with the plan of doing extensive renovations, however, we were not advised on whether, once we had put $250,000.00 into the house, we would be able to increase the value of our property by that amount. This is another one of the biggest mistakes people make. They buy without advice on the potential future value of a property. I can honestly say that I have NEVER seen a case where the buyers saved money by purchasing through the listing Realtor and not having their own representation.
I could go on to discuss all the horror stories I have encountered when representing buyers who are purchasing a FSBO property but I would prefer to leave it to people telling their own stories.
I welcome you to comment on this post with your own FSBO stories.
Tuesday, November 10, 2009
The Agreement
A very interesting discussion today with a local real estate lawyer. (Yes, real estate lawyers can be interesting-I'll save that for another post).
There is always lots of discussion with buyers and sellers about chattels and fixtures. Chattels are items in the house that are not securely attached (the dining room table, for example). Fixtures are securely attached (ceiling lights, for example). Fixtures do not need to be listed in a purchase agreement but chattels do. Of course, I live by the rule of when in doubt write it out.
Privately held mortgages: Few people realize that if they have a second mortgage or a privately held mortgage selling their property can be problematic. Only institutional mortgages can be carried over on the closing date of the transaction. This means that, if the seller has a private mortgage, the entire amount of the loan has to be paid back a few days before the transaction closes. The seller may have great difficulty finding the money to pay it off in advance and may not find out this is an issue until after the sale agreement has been signed.
I, for one, will be asking sellers who holds their mortgage to avoid this nasty scenario.
This lawyer said that he doesn't think we should be asking for surveys of the property anymore. He says that it is better to take out title insurance and have the insurance cover any issues. If one has the survey and it shows any potential problems then the insurance will not cover it. Hmm.
I love my job; it is always interesting.
There is always lots of discussion with buyers and sellers about chattels and fixtures. Chattels are items in the house that are not securely attached (the dining room table, for example). Fixtures are securely attached (ceiling lights, for example). Fixtures do not need to be listed in a purchase agreement but chattels do. Of course, I live by the rule of when in doubt write it out.
Privately held mortgages: Few people realize that if they have a second mortgage or a privately held mortgage selling their property can be problematic. Only institutional mortgages can be carried over on the closing date of the transaction. This means that, if the seller has a private mortgage, the entire amount of the loan has to be paid back a few days before the transaction closes. The seller may have great difficulty finding the money to pay it off in advance and may not find out this is an issue until after the sale agreement has been signed.
I, for one, will be asking sellers who holds their mortgage to avoid this nasty scenario.
This lawyer said that he doesn't think we should be asking for surveys of the property anymore. He says that it is better to take out title insurance and have the insurance cover any issues. If one has the survey and it shows any potential problems then the insurance will not cover it. Hmm.
I love my job; it is always interesting.
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