Month: November 2012

In the current real estate environment, with often drastically reduced listing prices, both buyers and buyers’ agents might forget that property taxes are based on the assessed value of a property, not the sale price.

Before you start to show homes to eager buyers, ensure that you know the correct property taxes for each of your listings. And make sure your buyers realize the importance of ensuring that this information is correct. And what the implications are if it isn’t.

Explain that, if they fail to factor in the correct property tax information, they may suddenly realize that their mortgage payments are several hundred dollars higher than they were anticipating, and in fact might bring them over the amount they originally qualified for. This is especially true in the case of foreclosures and short sales.

It is as much your job as it is the job of the mortgage professional to ensure that the buyer realizes that the prequalification letter shows both a purchase price and the dollar amount for which the buyer is qualified.

Another thing to pay attention to, especially in the case of an elderly seller, is whether the home is subject to some type of tax exemption or freeze. These may be in place and, again, will skew the actual tax bill and ultimately the monthly payment.

A good source for property tax information is the county assessor’s website, as it will have current information about the property. If you have questions or concerns, discuss it with your mortgage partner.

In the current real estate market it is important that your buyer knows exactly what he or she is buying. To help this process, your buyer needs a home inspection.

Here we discuss the home inspection process and why it is important to you that your buyer gets one.

Home inspections, as opposed to appraisals, are almost never required by lenders.

The appraisal provides the underwriter with sufficient information on the property to be able to make an informed decision. This information focuses on the overall condition of the property, but will also note obvious problems such as mold, missing paint and missing stair rails.

To really get into the nuts and bolts of the property, a home inspection is needed.

Inspections cover all major systems of the home, including plumbing, electrical, heating and air conditioning. A good one will take several hours to complete.

Many buyers may hesitate to invest in a home inspection because of the price, but at the same time, a home inspection is there to protect the interests of your buyer.

A home inspection might cost $300 or more, depending on the size of the property, but this is insignificant compared to the price of major unplanned repairs that arise long after closing and that your buyer hadn’t anticipated.

Most standard real estate contracts allow a certain number of days – typically five – to complete a home inspection and raise items that need to be addressed.

Part of the job of the real estate attorney – and, of course, your buyer has one – is to help the buyer raise with the seller any problems discovered in a home inspection.

A seller has the right to refuse to fix anything, but at the same time your buyer has the right to walk away from the property if no agreement is reached with regard to these problems.

If the contract has no provisions for a home inspection, and they are unwilling to put one in, the seller may be hiding something. Encourage your buyer to walk, or rather run, from the transaction, no matter how appealing the property appears to be.

As a real estate professional, you likely have a relationship with a good home inspector; if not, there are several excellent sources for locating one.