The Realtors Job--earning their commission

Once we have written the contract, your job is to finish up with the lender and all the information they need and start packing. (It will take you longer and it will take more boxes to pack than you think it will. So start early and pack what you don't need every day as soon as you get a chance to start. Sort out the stuff you no longer need to move or can't afford to move--give it away or trash it).
During this time, I will be ordering the inspections, (like the termite inspection, radon if it is not done with the home inspection and any other items the home inspection brought up) coordinating with the attorney on the title work, making sure that all the rest of the items are taken care of so we can have a successful closing. I will make sure that the lender is on top of your file and that the appraisal (they determine the value of your property for the bank) came back OK. I will take care of the problems that arise and be sure that all goes smoothly. You have enough to do to pack all that stuff you have while living your regular everyday life. I have the experience to take care of problems that arise and the vendors I use know that they need to let me know right away when they need help with a problem that needs to be solved. We will then go to the closing with your attorney if you have one and after the papers are signed and we are given the go ahead, you get the keys and the garage door openers and then you go and live happily ever after.....in your new home!

The Contract--Clear Title

I get the question all the time about making sure that we get a "clear title". That means that they can transfer the ownership of the house to you with no problems. It has not had work done to it that has not been paid for (liens) or taxes that have not been paid (tax liens) or judgements that have not been satisfied, etc. There is what we call "title work". It is a document that is ordered on the new house and when it comes from the title company it tells us (you, me, your attorney and lender) what the parcel number for your house is, what the legal discription is (so we don't buy the house next door!!) where the current mortgage(s) are from (so we can be sure to know about all of them and be sure to get the amounts to pay them off from the proceeds) if the taxes are currently paid, what easements are on the property (most of them are for utility companies to run their wires etc.) who owns the property currently (we want to be sure all the sellers are selling) and any other information that is important to the sale. If all of this information is OK and we are sure that none of it is "clouded" then we can proceed with the sale. Our contracts say the seller must provide you with a clear title. That means you can own the property and have the right, with certain provisions, (like the easements, etc.) to sell it to someone else in the future. If there are problems, we want to know so that the attorneys can get them cleared up so you can live happily ever after in the home of your dreams!!

The contract--Home sale contingency

You have a home to sell--do you sell or buy first? Yes, no, maybe!! This is a market where some homes take forever to sell and others sell right away--we have no magic way to tell what will happen in your situation. We start by looking at your home and helping you "stage" it--that means we help you declutter your stuff--pack it up, you are moving and you need to sort what you are taking to the new place and what you are getting rid of. We have professional stagers too that come in and can bring items to make your home look like a model home, or just change things around and give it a new vision or eye (they are very reasonable for the time they spend and well worth the money!!). We then price your home to sell. That seems like a crap shoot at this time too--we want to price it low enough to get buyers to come through but we don't want to make it so low because you may--probably will--get low ball offers. (We will negotiate the low ball offers and hopefully get to a price you can live with.) We can always go out and find a home you love and put in an offer "subject to the sale of your current home". Some sellers will take it that way and some will reject it and hope they get a non-contingent home sale buyer. We can always put yours on the market with a clause that you get the home you want or have time to find suitable housing. Buyers would have to honor that and hopefully you would have 30 days or so to find a home and/or a place to live--and then another 30 or so days before closing. It always seems to work out--it is in the overall plan. So lets look at yours and I will give you my best advice and we can go from there with all the options presented to you at that time so you know what the best plan is and we can go forward from there. It is not an exact science and I am sorry for that but that is part of the challenge of this business. It is OK--I am a trained professional and for the most part, know what I am doing and you can trust me that it will be OK!!

Writing the Contract part 3--the contingencies

We have written the contract and told the seller all the details of the major contract conditions, but there are the other "contingencies" or conditions that might apply to this contract and your ability to purchase. Do you want a survey of the property lines so you are sure where the fence is and whose property it is on--yours, the neighbors, on an easement of someones--answer yes!!
Do you want or does your lender require a pest inspection? If so we will get one--the seller pays for both of the above unless you make other arrangements in the contract. Is there special financing--FHA and VA have special provisions about how much the seller can contribute to repairs required by that type of financing. If you purchase a country property that is on well and septic you will need both the well and septic inspected to be sure they are working and safe--you may need the septic pumped out if it has been over 5 years since it was done. Some wells will need to be shocked and retested if they fail the first test to be sure the water is good to drink. We talked about the home sale contingency in the previous blog, but this is a contingency that is important to be addressed in the contract. You may want a radon test if there is no system to take care of it in the home. You may have a home to sell (another blog) and we have to tell the seller about that home and where in the process of selling it you are, just on the market or do you have a contract with a closing date firmed up. There are a few other contingencies that may need to be used, but for the most part, these are the major ones that protect you. At the time of the contract, you will give "a good faith deposit" also called earnest money and that is usually $500 to $1000 in our area. Some areas ask for more. This money will secure the contract on your home and says you are making an offer in good faith. If the contingencies you have put in place are not satisfied, such as selling your current home, then the earnest money (most times) will be returned to you and you no longer are bound by the contract. Only sign a contract for a home in good faith knowing that you are purchasing that home and it is a big decision, not to be taken lightly.

Writing the contract part 2--the home inspection

We have found the home of your dreams but need to know more information about that home. We do this with a home inspection. I will recommend home inspectors but you may bring in anyone who knows what they are doing to check out the home. The charge for most homes that are single family is about $300, worth every penny, and paid at the time of the inspection. I only recommend inspectors I have used personally myself. I will ask you to call the inspector and set up a time that you and the inspector can all be there. (Then you call me to set up the appointment with the seller so they know when you will be there--it takes 2-3 hours to do the inspection, so be sure you alot that amount of time.) You need to be there if at all possible so you can learn as much about your new home and the care (and feeding) of it. The inspectors will give you tips on furnace filters and how to change them, water shut offs in case of emergency, electrical and roof problems if there are any and what to do about them, they will explain what a GFI plug is and why you need them around the water sources in your home. They tell you the age of the systems and about when you will need to replace them down the road. They will answer your questions and don't be afraid to ask--you are paying for their time and expertise. You can bring family or friends with you if you want and that is fine. (Dad always wanted to know about the house we were buying and he knew what questions to ask). You will get a booklet from most of them to refer to when you have other questions. All of the inspectors will be licensed and bonded. When they are finished they will give you a list of the things that may need to be repaired or warranted or are just unacceptable. We take this list to the sellers agent and ask for repair, an allowance or what ever remedy we would like to have. They then have the option to do what we ask or counter our request. We are asking for them to fix the major problems, not do simple stuff like paint the pepto-bismol pink bedroom. Once we come to an agreement, they repair what they said they would do or give us the allowance at closing. Once in a while, with certain kinds of financing (FHA) there are things that the appraisers want done or finished and they put that on the appraisal sheet and we ask the seller to do those things or if we can do them, we get the sellers permission to fix them. Knowing what you are getting into will make your life easier down the road.

Writing the contract to purchase--the disclosures

Well, we finally found the right house--now we have to write up a contract to purchase that home. We go back to my office and fill out the "Official paperwork". (Don't worry, I am a trained professional and it really is exciting--it doesn't hurt at all!!) The first piece of paper you will see is called the Sellers Disclosure and it tells us what the seller knows about the house. It talks about the roof and the basement, if they have had any leaks, any problems that they know of they must disclose to you the potential buyer. They have to tell us the truth because we are basing our decision to purchase on the answers on that sellers disclosure. (We are also basing the price we offer on what is known and has been corrected in the house.) There are other disclosures the seller has signed here in the state of Illinois. A radon disclosure (Radon is an odorless, colorless gas that usually comes in thru the basement of the home, and can be measured so that the levels are safe--under 4 pico cures (I have no idea what a pico cure is but it is the standard of measure for Radon)) Radon levels can be remediated and the levels guaranteed to be under 4 pico cures if need be (usually by the seller). You will also see a Lead based paint disclosure if they house was but prior to 1978. Lead paint was used in all homes built prior to that year and most, if not all, of it has been painted over or covered over but you need to know this because if you buy an older home and remodel it, you need to be aware that the dust from the remodeling could be detrimental to any children that are around at that time. You might see a mold disclosure also. Every home has some small amounts of mold somewhere but we want to be sure there are no large amounts of it, for instance in the attic, or basement, or behind the walls. We will have a home inspection (see next post) and that will hopefully uncover any major mold problem the homeowner doesn't know about or has not had fixed.
Now finally on to the contract. The contract is an 8 page document where we fill in all the blanks. It is where we tell the seller what it is we want and what it is we are willing to pay for what we want. It is where we make an offer to purchase the property and tell them what we want to be included in the property (like the refridgerator and stove) and what we don't want (the old airconditoner in the attic). We state the terms and conditions of the sale, when we want to close and take possession and how we will pay for the property. We want them to convey a clear title to us (another blog) and we need to discuss other things (performance, default, damage to the real estate, etc.) The contract protects you and there are contingencies (another blog) that if not met you can void the contract--like the sale of your current home or the fact that if you don't get the money you don't have to purchase the house. These are legally binding contracts so when you fill one out you are serious about purchasing a home. It is a simple process and you have a trained professional (me) guiding you through the whole buying process so not to worry. It is all part of the journey and fun to getting to "happily ever after".

Looking at homes is fun!!

Finally, we get to the good stuff--looking at homes!! You will know when you find the right home for you because something in your tummy will say "THIS IS THE RIGHT ONE!!" Sounds silly I know but my clients all say this is the one--I feel just like you told me we would about this home.
We need to know what we are doing when we look at homes. We will set appointments and usually see 3 per hour so in 3 hours we will see 9-10 homes. The is enough to totally confuse you as to what kitchen is in which house. The Multiple Listing Data Sheets have lots of pictures of the inside of the homes so it is easier to remember the inside of 123 Elm from the inside of 3456 Mead, and you get your own copy of the data sheets so you can take notes on each one. We usually keep only 3 at the top of your list of homes and throw out the rest. Choosing from 3 is easier than choosing from 10. We are looking for the home that has a floor plan that works for you, a lifestyle that works and a neighborhood that is comfortable, convenient, and located within your parameters of close to work, school district, near friends or some other criteria you have that is important to you. Some things in a home are really important, is there a big kitchen, bedroom size, a finished basement for the kids or a "man cave", a three car garage, a large yard. Some things are not as important, the color of the walls, the wallpaper in the bathroom, the counter tops in the kitchen, because these things can be changed and at a smaller expense than moving a wall or building an addition. Sometimes a home will not have one of the features you want, say a fireplace in the living room, but we can have one put in. We just need to build in the expense of having it done or doing it ourselves and add it to the cost mentally. We can do it right away or maybe it will be a plan for down the road in a year or two. I suggest not ruling out a home because it doesn't have one or two things you think you need or think you really want, because I can only find you about 85% of the house you want. There is no perfect house, close but not perfect, no matter how many you look at. One of the greatest joys in this business is helping someone find the right home for their needs, budget and their lifestyle. The right home is out there and it is our job to find it--and then you get to live "happily ever after".