7 Reasons Knowledge Is Power in Real Estate
Buying and selling real estate can be a long and involved process or it can be smooth and quick. As with most any situation in life, you get out of it what you put into it. I would like to share with you some thoughts from both sides of a real estate transaction and why it’s important to do your homework, make no assumptions, and be prepared for anything.
The home inspection can be a scary part of the process for both sides. There are a variety of inspections that can be done. Be sure to ask your realtor and inspector which would be recommended for your purchase. There are times when a seller thinks they know their house well and an inspector finds things they never knew were there. This is one reason it is highly recommended for buyers to get inspections during the purchase process. A seller can only tell you what they know. They don’t know what they don’t know. A buyer can only see so much unless they have a trained eye. An inspector can shed light on potential problems as well as existing problems. There are a number of different type of inspections that can be ordered. The inspections recommended may depend on your purchase. New construction inspections are different than residential resale inspections.
It would not be good for a buyer to move in only to find a major problem and say, well I didn’t know. Knowledge is power!
This is a very important part of the process. If you were to buy a house with a title issue it can create a real problem for you when you go to sell it. For example, if a couple is getting a divorce and the one spouse sells the house and the ex-spouse doesn’t sign off on the deed, the house is still in that spouse’s name. When the new buyer goes to sell the house years later, they cannot get a clean title because the ex-spouse will show up as part owner. Without a title search, you don’t know what you don’t know. If the ex-spouse passes away before you sell and need to locate them to sign, you will have to deal with heirs and legal matters. Stay informed and know the attorneys and title companies are looking after your best interest so you know what you are getting into. Knowledge is Power!
The lenders come into the process before any of the others. They should be your first stop, after the realtor, because a lender can make or break a deal. If a lender does a thorough job of pre-qualifying a buyer, they will generally catch any possible problems prior to writing a contract. Tell the lender the truth up front! If the lender doesn’t have all the facts, they can not give you accurate information and you will not be informed enough to move forward confidently. They can give you a letter based off of what you tell them and it can be worded in such a way that they are covered if you write a contract and can't’ get financing. Ask questions about when you can expect a loan pre-approval or commitment letter, what the closing costs will be, and a good faith estimate. Shop around for the best rates and you may want to ask the lender if you are having to buy points to obtain the low rate they are offering you. If you go with the first lender you find, it may cost you more in the long run. Go shopping and do your homework! Knowledge is Power!
Surveys are important for several reasons. Surveys are used to primarily stake the property boundaries, check for easements and encroachments, and the impervious soil ratio. It does happen where fences have been connected, driveways poured over the neighbor's property line, fences built over the line, etc. Many times this can be resolved easily, but sometimes sellers and new buyers want it right. If you do not get a survey and you go to sell a property, there may arise some issues you weren’t aware of. You don’t want to go to sell it and say, well “I didn’t know.” Knowledge is Power!
Not all home warranties are equal. Ask your realtor to refer you to some different options, research the policies, and make your decision on which one will cover your needs best for the home you are purchasing. There are options for upgrades that you may not be aware and wished you had upgraded if you only knew. The upgrades many times are what covers the major mechanics of the house, such as heating & air, water heater, etc. When a seller offers you a warranty, it is usually the base policy. Know what you are getting and aware of what you need. Sellers, buyers may try to negotiate the home warranty with you if it benefits them. Read the policies on what they are asking for and what you are offering so you will know how to better respond. Knowledge is Power!
Read what you Sign
You will be given a lot of paperwork to sign, starting with the agency from the realtor, lender disclosures, and offer to purchase. Ask a lot of questions if you don’t know the answers. There is no shame in asking. The only shame is that which comes when you have a problem after closing and say, well I didn’t know. Realtors, lenders, inspectors, attorneys, surveyors, title companies are all working as one team to help you in this process and encourage your questions. Knowledge is Power!
Getting the property under contract is an exciting step in the process. However, keep in mind it is not sold yet. Buyers can order inspections, surveys, and title searches, to ensure they are getting what they are paying for. Buyers may walk away for many reasons and until it is recorded at the courthouse, the house is still the sellers. There are various things that could happen to cause it not to record, even possibly at no fault of buyer or seller. The buyer could change their mind, death, divorce or separation, just to name a few. There could
be weather issues, courthouse issues, lender or wire issues, and the list could go on. Have your attorney and realtor confirm it’s been recorded before you move in or allow a buyer to move in. If a buyer moves in and it doesn’t record until the following day, know that if anything happens to the house overnight, it’s still the seller’s responsibility. Stay informed and communicate with all parties so you don’t have to say, “I didn’t know.”
Staying informed and in communication with the various members in the process will keep you up to date to make informed decisions. This knowledge leads to a life-impacting end result offering a peace of mind. Now you can enjoy your new home and feel confident you have made an informed decision on one of, if not the biggest financial decision you will ever make. Knowledge is Power!