Buyertips

Buyers Tips

When talking and listening to my buyers, I try, more than anything else to pay
attention to their needs, likes and dislikes. Sometimes it is difficult for agents
not to overshadow their clients' needs with their own preferences, be it style of
house, area of town, nearby amenities, or school district. Below are some
points buyers should know prior to looking for a property:

Agency Agreement - Many agents ask their buyers to sign a Buyer's
Agency agreement for an extended period of time when they first start
working with a buyer. This insures that the buyer will use this agent to
purchase their new home, and that eventually, the agent will get paid for
their time and effort. Good agents put a lot of time and effort into finding
their clients the right home, and should be compensated for this. Agents
also should know a lot about construction and values, as well as current
trends and possible changes in a market area. To date, I have not asked
my buyers to sign this agreement until they submit an offer. I have
expected my clients to be considerate of my time and efforts, and
appreciative of my knowledge and experience. I found out recently that
this is not always the case, but all any agent can do is concentrate on
their successes and their clients that value them.
Due Diligence Period/Money - A year or so ago, North Carolina Real
estate offers added Due Diligence Fee as an option. This is a non-
refundable fee that the buyer pays directly to the seller(s) at the time of
an excepted offer, for the sellers to take their house off the market while
the buyers get home inspections, loan approval, a survey, and review
Home Owners' Association documents, if they apply. Buyers have until
5PM on the day Due Diligence ends to terminate the purchase. If they do
terminate, they forfeit this fee to the seller. If a successful closing on the
property is reached, the fee is credited to the buyer, as part of the
purchase price. Naturally buyers want the Due Diligence fee as low as
possible, while sellers want it as large as possible. It is a negotiated
amount, many times depending upon the length of the due diligence
period, the activity (showings) the house has been experiencing, and
asking price of the house.
Earnest Money - Additional money paid by the buyer at the time of an
accepted offer, which is held by the listing agency or an attorney until
closing, in an escrow account. If a successful closing is reached, it is
applied to the purchase price of the property. It is refundable to the
buyer, if the buyer terminates the purchase for any reason prior to the
end of the Due Diligence period. All buyers should be aware, though,
that whoever is holding the Earnest Money cannot release it until the
seller has signed a release. If they do not agree to sign a release, the
fate of the earnest money may have to be decided by a court of law. This
does not happen very often.
Price Negotiation - When a client of mine is interested enough in a
property to make an offer, I research the recent comparable sales and
current listings in the market area, and advise the clients as to what I
think the property is worth. I am usually pretty good at this because of my
28+ years of experience in the Charlotte area as a real estate agent and
certified residential appraiser. Many clients listen to my advice, but some
do not. Those who do not listen are usually disappointed when they do
not get the house, and a buyer who was more realistic with their offer
does. All buyers should know that the North Carolina Offer to Purchase
contains a clause stating that the property must appraise for at least the
purchase price. If it does not, many sellers will lower the agreed upon
price, in order to reach closing. A Buyer relying on the Internet free
services to determine what to offer on a house is usually not very
realistic. Please, please, please listen to your knowledgeable buyer's
agent! You will reduce your stress and move into your dream property
much more quickly, if you objectively make an offer based upon recently
closed comparable sales and current market activity!
Inspections - The problems raised by home inspections are often more
difficult to resolve than price negotiations are. Buyers should know that
they are free to use any inspection service they want to, have a relative
inspect, inspect themselves, or not have any inspections at all. Just
because a buyer has inspections done does not mean that the seller is
obligated to repair anything. They can choose to not repair a thing,
leaving it the buyers choice as to whether they wish to continue with the
purchase. I am happy to provide buyers names of inspection services I
have worked with in the past, but cannot guarantee they will find
everything, or get their report in on time. Buyers should be aware that
Radon is becoming more of an issue, even in Charlotte. Prudent buyers
should order a Radon inspection, termite inspection, mechanical and
structural inspections. If a house is several years old, they should hire an
inspector to make sure there is no underground fuel tank on the
property. Be aware that some buyer's agents prefer that you hire an
"easy" inspector, that will not raise a lot of questions that could be
difficult to resolve. I will tell you who I think is most thorough, even if it
causes more problems for me in repair negotiations. You should also
know that a seller can hire anyone they want to complete repairs, and
you can hire your inspector to make sure they are completed correctly.
My advice is do not worry about asking for small stuff to be repaired.
Also, it may be smarter to settle for a reduction in price, rather than have
a seller get repairs done, as they most likely will not have them done in
the manner you would. Finally, please be aware that no where in the
North Carolina residential offer to purchase contract does it say that a
dwelling has to meet current building codes. Unless it is a new home, this
should not be something you raise as a requirement when negotiating
with a seller about repairs.
Loan Originators - A good loan originator is key for a smooth
transaction. I know several of them and can provide contact information
to compare interest rates and closing costs. A good question to ask the
loan originator is how long will it take to get a loan commitment after we
apply for the loan? Be aware that you cannot apply until you have an
accepted contract on a property, but you can be pre-approved based
upon your income and credit rating.
Survey - If you are buying a property with an individual lot, you want a
survey. It is sometimes acceptable to review and use a survey the owner
may have had done, but you need to make sure there have been no
significant changes to the structures on the lot you are buying, or on the
adjoining properties. Pay attention to easements on a survey and
determine whether they have a negative affect on you. Review of a
survey should be done during the due diligence period, not at the
closing table!
Closing Attorney- Obviously you want an honest and competent one.
You can use any real estate attorney you like, but sometimes it is a good
idea to use one that your agent is familiar with, or that your loan
originator suggests. You can compare what various attorneys will charge
you to close the sale and do their title search and perhaps save a few
dollars this way.
Be Observant - I suggest to my clients that they drive buy the property
they are buying several times during the due diligence period, to see
what the neighborhood is like. Find out how the commute to work is,
where is the nearest grocery store, restaurants, movie theaters. Buyers
should also talk to neighbors, who are often full of information. Check out
all you can prior to your due diligence period expiring. Remember, you
can back out for any or no reason during that period, if you are willing to
forfeit your Due Diligence Fee and any money you have spent on
inspections.
School Districts - Many buyers in Charlotte are concerned about
school district ratings for their own children and future resale. Not
everyone has these same concerns, and nearby private schools can
outweigh a public school assignment that is not considered to be
desirable.
Property Improvements - Many buyers appear to prefer properties
that at first glance appear not to need any immediate improvements.
They should try to be aware of quick fixes that sellers have applied that
do not really meet the buyer's needs. These can be things like fiberglass
surrounds in the showers, when you really wanted ceramic tile.
Sometimes the more cheaply priced property that needs new tile around
the shower right away may be the better choice...
Old Houses - Alright, I do have to confess one weakness of my own: I
prefer old houses and old neighborhoods. I like the hardwood floors
throughout many old houses, the molding details, and the established
trees in old neighborhoods. I love mid-century homes and older. That
said, I have sold new houses too, and see the advantages of some of
them. Buyers should be ware of what the trade offs are between new and
existing construction. They should also know that a house in a new
subdivision usually does not start appreciating until the builder has
finished building in the subdivision.
Deed Registration - Buyers should know that they could not have the
keys to their new home until the deed has been registered in their names
at the courthouse. This is for home insurance reasons, and because of
this, I tell my buyers they should schedule their closing in the morning on
a weekday to allow time for the attorney to get it registered that
afternoon and permit them to then pick up the keys. Many attorneys
register deeds electronically now, which cuts down on the lag time.
Down Payment Money - The closing attorney is going to expect the
buyer to bring a certified check to closing or wire the funds to the
attorney's account. Every attempt is made to get a closing statement the
day before closing to let you know what the final amount needed to close
is. Whether this can be done is often a function of how efficient your
lender is and when they get the closing package to the attorney's office.
Utilities - I will remind you to have them switched to your name prior to
closing. You should make the calls at least a week in advance, and
arrange for all utilities to be transferred to your name on the day of
closing. It is not fun to move in your new home with no running water for
the weekend, which can happen.

Rossier
Realty

Selling and listing
great homes in
Charlotte since 1984