Keeping Your Home Safe and Healthy

Most of us vacuum our carpets and dust our shelves fairly regularly to make sure our home is a comfortable place to live. We also take care of obvious safety hazards like poorly functioning appliances or broken plumbing. But sometimes, dangers are invisible. They lurk in mattresses, walls or in the air. Here are some tips to bring those problems into the light, and what to do to take care of them.

Houses have always been built according to the standards of their time. As we learn new construction techniques or gain awareness of what’s safe and healthy, standards change. Many houses built before 1978, for example, were built using asbestos and lead paint. Both materials have since been outlawed, but those houses still stand and people still live in them.

If your house was built before 1978, chances are you are perfectly safe unless you decide to remodel. Asbestos is not a health threat unless it becomes airborne (friable), so although you may have asbestos floor tiles, roof shingles, pipe insulation or popcorn ceilings, as long as they are in good repair, the asbestos remains encapsulated (sealed and safe). If asbestos is friable, it can lead to mesothelioma, a kind of cancer people talk about in hushed tones because it is so deadly. The moral of the story is this: if your house was built prior to 1978, hire a professional contractor to remodel. This way, you’ll live long enough to enjoy your new features.

The other health threat still present in homes built before 1978 is lead paint. Once again, as long as it is encapsulated (painted over so none of it can turn to dust or be inhaled or touched), it is safe. While exposure to lead is dangerous for adults, it is catastrophic for children because it causes permanent brain damage. In older homes, the paint around windows can get worn and old layers can become exposed. Even if your home was built after 1978, if your kids spend significant time in an old school building or church or other facility built before 1978, please do a little research to make sure it is safe.

While newer homes and buildings constructed to meet higher safety standards shouldn’t have any asbestos or lead, they may have another health threat: mold. In the Ukiah Valley, we are lucky not to deal with humid weather, because humidity is mold’s best buddy. However, most of us create humid environments in our home every day (in the bathroom when we shower and in the kitchen when we boil water). Mold is particularly hard on those with asthma and other respiratory problems.

To combat mold, open bathroom and kitchen windows if you have them, and use the exhaust fans. Also, be sure to replace your heating and air conditioning filters every few months and have your ducting cleaned once in a while. Doing this will reduce dust and mold, and make your heating and air conditioning systems run more efficiently.

As you head outside, you can make your home safer by creating a fire perimeter (knock down vegetation and limb trees six feet off the ground. If you use pesticides, rat poison, paint, or any other hazardous materials, be sure to keep the materials in their original, well-labeled containers that seal properly and are out of reach of children (locked cabinets are best). Children are curious and capable. They did a study with M&Ms in “childproof” medicine bottles. Want to guess how quickly those kids were enjoying the candy?

These are just some of the ways you can keep your house safe and healthy. As I think of more tips, I’ll be sure to pass them on.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

 

 

Buyers Aren’t Liars

There’s a phrase every Realtor has heard and many believe: buyers are liars. Realtors representing buyers sometimes feel misled when buyers change their minds or reveal information later that would have been helpful earlier.

As a buyer, it is unlikely that you hire a Realtor with the idea, “Hey, I’m going to lie to this person so they are less effective on my behalf.” And yet, it seems to happen a fair amount. If buyers know what questions to ask themselves, their Realtor, and their lender up front, they are more likely to get clear about what they’re looking for and to remain consistent throughout the buying process, resulting in less frustration for everyone.

Buyers first need to be honest with themselves about the type of house they can see themselves living in. To do this, they need to make a list with three columns under these headers: must-haves, needs, and wants.

Must-haves should be a list of the attributes that you, the buyer, cannot live without. If you are a contractor and your home serves as your office, you must have enough property to store your equipment. If you are a doctor, the hospital where you work may require that you be able get there within twenty minutes of an emergency call. If you work for an organization with territories or jurisdictions, you may be required to live in a certain territory or jurisdiction. If you have four kids, you may decide you need at least three bedrooms. If you are wheelchair-bound, the home must be one-story and wheelchair-accessible or easily converted to it. If you commute to work, you may decide that you must be within a certain distance of an airport to maintain a certain quality of life. These are must-haves.

Close cousin to the must-haves are the needs. That contractor we talked about earlier must have space for his equipment, but he also needs a home office where he can get paperwork done. Could he work on the kitchen table? Yes, but he’d prefer not to. That family with four children must have at least three bedrooms—boys in one room and girls in another—but each child would be much happier with his or her own bedroom, so the house really needs five bedrooms. And if you have school-aged children, being in a particular school’s enrollment area could also be a need.

After needs come wants. Do you want a view? A swimming pool? Hardwood floors? Clearly, these items are not as important as whether your whole family will fit comfortably in the new home, but they are still important.

Once you and your family are clear about everything you can think of for all three categories, share this information with your Realtor. He or she can filter homes for sale so you don’t waste your time looking at properties you would never buy.

After you’re clear about the property you want, ask your Realtor about neighborhoods with homes in your price range. What is the median price for houses in the neighborhood? Who lives here; is it quiet or full of rowdy kids? How close are community services and amenities like parks, hospitals, and shopping? Are there any problems you should be aware of?

Finally, get in touch with a lender and ask questions about current loan rates and terms, types of mortgages you should consider, variable versus fixed rate options, rate locks, and how much he or she thinks you can qualify to pay each month.

Armed with all this information, you can communicate clearly and accurately about what you want and need, and your Realtor can help you find the perfect property.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 40 years.

It’s a Buyer’s and a Seller’s Market

Right now it’s a buyer’s and a seller’s market. How can it be both? It’s these low interest rates.

Low rates allow more people to qualify for loans, bringing renters into the home-buying market. Low rates also make it easier for homeowners who want to upgrade to afford more expensive homes. On a typical $300,000 home sale, an interest rate increase of only 2 percent could mean as much as a 25 percent increase in your monthly mortgage payment, so people are getting while the getting’s good.

Of course, this is the reason it’s also a seller’s market. Buyers have been buying everything in sight, so there are fewer homes to choose from, making each one a little more valuable.

With fewer homes for sale, many people are faced with multiple offers on the same property—complicating things for all involved. Realtors must review each offer, explain the pros and cons, and sometimes compare apples to oranges: for example, one offer may have a higher price tag, but request that the seller make concessions (pay some closing costs, make repairs or perhaps leave personal property with the house), while another offer may ask for none of those concessions but come in at a lower price.

A common dilemma for sellers today is choosing between an offer with a high price tag—but one that requires maximum financing that a buyer may not be able to obtain—versus offers with lower price tags but more security, like a financed offer with 25 percent down or even an all-cash offer.

The question is: how much is the certainty of an all-cash offer worth? On a $300,000 purchase offer, would you take $100 less for an all-cash offer? Certainly. Would you take $25,000 less? Probably not. You and your Realtor need to discuss the upsides and downsides to figure out where you draw the line.

Let’s say you have three offers: one for $310,000, one for $300,000, and one for $298,000. The first offer asks the seller to pay $7,000 in closing costs. The second offer is a conventional loan with 20 percent down, and the third offer is an all-cash offer, but the prospective buyers want a super short, two-week escrow.

In years past, buyers used to send a letter with their offer, sometimes including a photo of their kids, the dog, and Goldy the goldfish, letting the sellers know how much they’ll love and care for this house. Now, no one is allowed to provide information that could allow sellers to discriminate, which means people cannot provide much, if any, information.

On each of the offers above, you have three choices: you can accept the offer as presented, you can reject it outright, or you can respond with a counter-offer. With a good Realtor on your side, you can respond to all offers at once, countering various issues in each of the offers, without inadvertently selling your house to three different buyers simultaneously—no one appreciates that. Or, you can simply ask for higher prices from each prospective buyer, taking into consideration their special requests and what those requests are worth to you.

Be sure your Realtor understands and complies with the special, and somewhat confusing, rules around multiple counter offers. Ask your Realtor whether they’ve done this before, because these transactions can be tricky. Inexperienced Realtors can always get assistance from their brokers or mentor Realtors—just be sure they do.

As a seller, multiple offers and counter offers provide some confusion and hoop jumping, but from a negotiating standpoint, it’s a wonderful place to be. As a buyer, multiple offers add more tension to an already tense process, but don’t be dissuaded. Hang in there. Your offer may be just what the seller is looking for.

If you have questions about real estate or property management, please contact me at rselzer@selzerrealty.com or visit www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 35 years.

What Is Seller Financing And What Should I Watch For?

When a buyer wants to purchase a property but doesn’t want to pay the whole price in cash, and the seller wants to sell the property but doesn’t need the whole amount in cash, an opportunity exists for both to get what they want through seller financing.

The buyer can acquire a property that may be worth more than he or she has in cash (or the buyer may want to reserve cash for other uses like improving the property after purchase). The seller is able to sell a property that may be hard to sell for cash because it is not attractive to institutional lenders, or the seller can get a higher price because he or she will carry the financing. The seller may also want to provide financing because he or she earn a favorable rate of return as well as favorable tax treatment.

If all the stars align and both buyer and seller agree to seller financing, here are some do’s and don’ts to consider. As the seller, you should require a reasonable down payment, usually a minimum of 20 percent. Less is risky: if the buyer (borrower) misses the first payment and you need to foreclose, you will lose money by the time the foreclosure is done. Foreclosures take time and money, and at the end you still have a property to sell. Depending on the situation, you may need to spend time and money repairing the property, as well as marketing it for sale and paying brokerage fees to do so—all this time you’re losing interest income. So, get 20 percent up front. The more specialized the property, the more important a large down payment is. While it’s relatively easy to sell an office building, selling a church, school, or hospital, for example, is significantly harder.

As a seller, you should also be cautious about a buyer who plans to do major work renovating the property. At first, it may sound great. But if the buyer doesn’t know what he’s doing, you may end up with a mess. Unfortunately, I speak from experience. I sold a property and carried the financing; six months later, after the buyer gutted the buildings (down to the concrete walls), the buyer ran out of funds. I foreclosed and had to complete the renovations at my expense.

As with most agreements, things work best when both parties get what they need. The loan’s interest rate should work for both buyer and seller, and the payment schedule should be realistic for both. The buyer needs to be able to afford the monthly payments, (mortgage payment, taxes and insurance) and the seller needs to receive enough income. Be aware that the new Dodd Frank Act, may pertain to your transaction. In most cases, seller financing is exempt, but talk to your realtor to be sure you’re following the rules.

The overall term or length of the loan may need to correspond with other expenses, like sending a child to college. If the seller carrying the loan suddenly needs cash, all is not lost. The loan (or mortgage-backed note) can be sold on the open market. The value of the note depends on the loan terms, the value of the property, and the borrower’s payment record. Having carried financing, I highly recommend title insurance on the note. It reduces your risk by protecting you against buyer fraud. If you’re carrying the financing, I also recommend that you make sure property taxes are paid, the property is covered by hazard insurance, and that you report interest income to the government so the buyer can deduct the interest paid. That keeps everyone happy including the IRS.

If you have questions about real estate or property management, feel free to contact me at rselzer@selzerrealty.com or visit our website at www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 35 years.

Making the Most Out of Open Houses

When you’re trying to sell your home, you want to engage in all the activities that encourage buyers and none of the activities that don’t. Common sense, right? Then why do I see so many sellers sabotaging the sale of their property when it comes to open houses?

Realtors have many marketing techniques to get your property in front of potential buyers. One of those is open houses. Like anything, there’s a right way and a wrong way to do open houses. The right way involves the following:

  • Remove a third of your furniture
  • Clean your house until it sparkles
  • Take Fido to your sister’s house (best not to have pets on the property)
  • Make the beds
  • Open the window treatments (curtains, blinds, etc.)
  • Make sure your valuables are in a safe place (Realtors will safeguard your home, but cannot be in all rooms at all times. Don’t leave out jewelry or electronics that someone could easily slip into their pocket.)
  • Mow your lawn and make sure your landscaping looks great
  • Clean the fireplace (If it’s winter, have a fire in the hearth. Otherwise, put a fern in the fireplace for decoration.)
  • Bake cookies before the open house (your house will smell amazing). If you don’t have time to bake cookies, put a drop of vanilla on light bulbs around your house. It will have much the same effect.

Now that you know what you should do, here’s what you shouldn’t do: as the owner, you should NOT be present when people tour your house (either during an open house or a showing). Be anywhere but home. Go to the movies. Go play with Fido at your sister’s house. Go to someone else’s open house. Go ANYWHERE but home.

Clear enough? If you’re wondering why it is so essential not to be present, here are a few reasons:

Your realtor can negotiate for you. Part of negotiation is the art of timing in asking and answering questions. If a potential buyer asks about whether a feature is included in the price (say, a hot tub), the realtor can ask, “Is that important to you?”  If you’re standing right there, the potential buyer will ask you directly and you’ll need to answer. Your realtor can legitimately say, “I don’t know, let me find out,” while probing about what the buyers really want.

Potential buyers feel more comfortable when the owner isn’t around. Many people feel weird rummaging through a closet or poking around someone else’s house when they’re right there.

Realtors are trained in how to respond to criticism, and are not emotionally tied to the property. This is probably the biggest reason owners should not be present during their own open houses. Prospective buyers should feel comfortable objecting to things about the home that they don’t like: a closet is too small or a room is too dark. When realtors hear these objections, they can often turn negatives to positives. If they don’t hear the objections because the property owner is hovering, the issues cannot be aired, and your realtor can’t address them. The last thing you want is a defensive homeowner defending a property’s shortcomings. That’s not a helpful negotiation tactic.

So, go somewhere fun for a few hours and let your realtor do his or her job. You’ll be glad you did.

As you can tell, there is no way for a seller to overcome these issues if they are selling the house themselves. I know this is biased in favor of working with a realtor, but it is also true.

If there’s something you would like me to write about or if you have questions about real estate or property management, feel free to contact me at rselzer@selzerrealty.com or visit our website at www.realtyworldselzer.com. If I use your suggestion in a column, I’ll send you’re a $5.00 gift card to Schat’s Bakery. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 35 years.

Pets: We Can’t Live Without Them, But Our Buyers Can

Most of us wouldn’t trade our pets for anything, but when it comes to selling your home, why limit your audience to pet lovers? I would never suggest trying to hide the fact that you have pets, but I would recommend you follow a few tips on minimizing the negative effects pets can have on your home.

Starting with the outdoors, be sure to remove any landmines that will leave a bad odor on the bottom of a potential buyer’s shoe. If your dog has torn up the landscaping, repair it and see if Fido can stay with friends when a realtor wants to show your property.

As you move indoors, before you invite realtors to bring potential buyers to the house, you should consider the following:

  • Fix door jambs (if the wood is damaged, replace it)
  • Replace window treatments (stained, scratched curtains do not impress people)
  • Repair, replace, or remove furniture (as a rule, you should remove about a third of your furniture when you put your house on the market – if you have pets, remove the third that the pet(s) use the most)
  • Repair or replace flooring (stained carpet and scratched wood floors should be repaired; odors sometimes require the carpet and the carpet pad to be replaced)

I once knew someone with so many dogs that the carpet, carpet pad, subfloor and much of the sheetrock had to be replaced before the home would sell. Clearly, you don’t want to take on extra expenses when selling your house, but to maximize the amount of money you will get out of the sale, you may need to do some repair work.

Again, do not try to hide the fact that you have pets, simply minimize the negative impacts. If you do not disclose that pets live in the house and potential buyers find out before the sale closes, you could lose the sale. If a buyer finds out after the escrow closes because of odors or needed repairs, you, as the seller, could be on the hook for expensive repairs. So, do not conceal defects, fix them.

I’ve mostly been referring to dogs and cats when I’ve said “pets,” but some people have slightly more unusual pets, like birds, snakes and rodents. If you have friends willing to keep your pets while you’re trying to sell your house (or at least when it’s scheduled to be shown), it’s probably best. A realtor I know showed a house that had a safe, fully enclosed terrarium for their pet snake. When the potential buyers entered the room with the snake, that was it. The wife turned on her heel and left. She didn’t even want to see the rest of the house. It’s possible the house wasn’t right for other reasons, but the snake clearly didn’t help.

If you cannot move your pets out of the house while it’s being shown, at least be sure to clean the cages, empty litter boxes, open windows (if weather permits), and put dogs and cats in their crate if they’re crate-trained, or outside safely confined, if possible.

Next time I’ll write about Reverse Mortgages. If there’s something you would like me to write about or if you have questions about real estate or property management, feel free to contact me at rselzer@selzerrealty.com or visit our website at www.realtyworldselzer.com. If you make a suggestion I use, I’ll send you a $5.00 gift card to Schat’s Bakery & Café. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 35 years.

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You Can’t Disclose Too Much. Really.

When you sell a house, you are legally obligated to disclose anything that would negatively affect the value of the property or a buyer’s interest in owning it. So, if you’re selling your home, you probably have quite a list to compile.

In Mendocino County, real estate agents typically use an 11-page document that covers a wide variety of issues. In addition, sellers must also complete a Transfer Disclosure Statement (TDS) that includes anything he or she knows (or should have known) about the property.

Typically, disclosures fall into three main categories. Property-specific disclosures include things like a leaky roof, a well that runs out of water each September, a septic system that has a swamp over it, or an addition for which there is no building permit. Proximity-specific issues can include things like whether a property is at the bottom of a hill with erosion problems, near a Superfund contamination site, or within earshot of a popular shooting range. And finally, regulatory disclosures include zoning and other issues. For example, is the property zoned for its current use or within 300 feet of land zoned for agriculture? These issues can affect how the property can be used and the owner’s quiet enjoyment of it.

If your head is already spinning, hold on because we’re not done yet. Some local sellers (especially in Willits) must also complete the Alquist-Priolo disclosure that warns buyers that the property is close to an active earthquake fault. And, your realtor must do a diligent visual inspection of all visually accessible areas (so, not necessarily the attic or under the house, but everywhere you can easily see).

After the visual inspection, the realtor has to describe the property in detail. The report doesn’t have to include explanations regarding the cause of the problems, just that they exist. For example, the realtor’s report may state, “There is a stain on the ceiling,” but not, “Looks like a leaky roof.” Or it may state, “The lawn over the septic system is green and soggy and smells like a sewer,” but not “The septic system clearly needs attention.”

If the sellers don’t hire a realtor, they must complete the disclosures on their own, so be sure to get all the appropriate forms. On the upside, this process is an excellent way to make sure you haven’t overlooked common issues. On the downside, it is time-consuming and a legal liability probably better handled by one accustomed to completing it.

There are a few exemptions, folks who do not have to complete some of the disclosures, most notably people who acquired property by foreclosure are exempt for the TDS requirement. If the owners did not have problems disclosed to them, they may have no way of knowing a problem exists. However, to the extent that the post-foreclosure owners knew or should have known about problems, they are on the hook. For example, if a neighbor repeatedly sends letters concerning a property line discrepancy and those letters are tossed in the trash, a judge will likely rule that the owner should have been aware of the problem.

If you’re trying to decide whether to disclosure something, your decision should basically come down to three rules:

  1. If you wonder, “Gee, should I disclose this?” The answer is almost certainly YES.
  2. If you would want to know about the problems, you should disclose it to the buyer.
  3. If you picture yourself in front of a judge explaining why you didn’t disclose something, is the judge likely to rule in your favor? If not, disclose.

Here’s the thing. When a potential buyer is walking around the empty living room picturing her couch next to the fireplace and her kids squealing with delight as they run around the backyard, that’s the time to disclose issues. Be up front. If you mention a minor issue that isn’t really material, no harm is done because the buyer will recognize it as minor. If an issue is material, then you are legally obligated to disclose it. So, just err on the side of caution. After all if the disclosure is going to kill the sale, wouldn’t you rather have it die before escrow closes than six months later when you hear from the buyer’s attorney?

I hope you are enjoying the holiday season. I wish you and your loved ones a happy and prosperous new year.

Next time I’ll write about some of the highlights from 2013 as we plunge into 2014. If there’s something you would like me to write about or if you have questions about real estate or property management, feel free to contact me at rselzer@selzerrealty.com or visit our website at www.realtyworldselzer.com. If you’d like to read previous articles, visit my blog at www.richardselzer.com. Dick Selzer is a real estate broker who has been in the business for more than 35 years.

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What is this “MLS” everyone’s talking about?

I’ve referred to the MLS in previous blogs, but I don’t know that I’ve explained what it is and why it’s so valuable, so here you go.

MLS stands for Multiple Listing Service, and it is a system whereby real estate agents in a specific geographic area share information about all the properties for sale (“listings”). Access to the MLS is restricted to real estate brokers, and by extension the agents that work for them.

For each property, the MLS includes address, photos, price, detailed descriptions, disclosures, access information (so the realtor can show the property), and more. The information’s available online and, ideally, offers everything a person would need to make a decision about whether to buy.

The MLS can also be used to match buyers with their ideal property by entering a wish list. The system will automatically inform potential buyers when a property matches their list.

In my opinion, your real estate agent must be a member of their local MLS to provide you with the service you deserve. Without the MLS, they’re working in the dark – offering you a narrower set of choices than you’d get with a realtor who checks the MLS regularly for updates. In addition to listings, the MLS also includes data about recent sales, so your realtor can accurately assess the fair market value of your home or the home you’d like to buy.

In the last year or so, some private listing services have tried to compete with the MLS. Within a region, a small number of offices have opted out of MLS and chosen only to share with each other. I really feel this is a disservice to the buyer and seller. Candidly, I see no advantage to these private programs because the MLS, when used as designed, provides the most information to the broadest audience. Also, with the traditional MLS, rules and a strict code of ethics have been designed to improve the relationship among all parties to make the entire transaction smoother and easier.

The MLS also feeds public and governmental online listing services. So, while brokers are the only ones who access the MLS, their willingness to enter all that data allows public sites like trulia.com, zillow.com, and realtor.com to be populated. “For Sale By Owner” (also known as FSBO) properties are not on the MLS, but nearly all other properties are.

A note of caution when listing your home: if you’ve upgraded your home without the appropriate permits, government databases fed by the MLS may give you away. If the county has your property listed as a house with three bedrooms and one bath, but you are selling a three-bedroom, twobath house, flags may go up.

Next time I’ll write about why I’m optimistic about the housing market. If there’s something you’d like me to write about or if you have questions about real estate or property management, feel free to contact me at rselzer@selzerrealty.com or visit our website at www.realtyworldselzer.com. Dick Selzer is a real estate broker who’s been in the business for more than 30 years.

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What to Expect from a Real Estate Agent

For those of you who may not have noticed, the real estate market has changed recently. Prices are up, inventory is down, and buyers outnumber sellers. This makes it a seller’s market. Buyers are in the market because rates are still at historic lows (and have only one way to go in the future). Prices are still affordable, and the economy is looking stronger. If you are thinking of selling in the near future, you should consider starting right now.

Whether you’re thinking of buying or selling, the question is whether to employ a real estate agent to help you. Are they expensive? What do they do for you, exactly?

To answer those questions, I thought I’d define a real estate agent’s legal obligations, as well as the difference between a real estate agent and a realtor®. All realtors are real estate agents, but not all agents are realtors.

Licensed real estate agents have a fiduciary responsibility to deal honestly and in the best interest of the principal (you) — this is not just an ethical responsibility, but a legal one. Real estate agents must follow your instructions unless they are “patently frivolous.” But, as long as you are reasonable, your agent must represent you according to your wishes.

A realtor is a real estate agent who is a member of their local realtor association (which also affiliates them with their state and national associations). So, in addition to being well trained, realtors adhere to a strict code of ethics and standards of practice, higher than those mandated by law. Membership in the associations also makes it easier for realtors to stay up to date with the latest legal issues. The question remains, should I hire a realtor to help me buy or sell a house? I’d say yes, and here’s why.

First, it is in a realtor’s best interest to help you meet your goal. realtors only get paid if you get what you want – if you complete a buying or selling transaction.

Second, people in the real estate industry hire realtors – brokers and lenders with the knowledge to do the work themselves. They know the value of a good realtor. It’s kind of like when you find out your doctor goes to a specialist when he needs one. Don’t you want to do the same?

On the selling side, a realtor will assess your property to determine its market value and bring to light any issues that make it unusual (e.g., is it in a flood plain? Does it have historic value?). realtors advertise your property locally, online, and via the Multiple Listing Service (MLS), reaching thousands of potential buyers. realtors are also connected to other real estate professionals and can share information about your home via those relationships. And, the realtor doesn’t make a dime unless your house sells. As a mater of fact, they spend time and money marketing your property on the prospect of collecting a fee when it sells.

On the buying side, realtors can act as a buffer between you and a homeowner, so you don’t tip your hand. In negotiations, he who speaks first loses. However, if realtors communicate, they may act as independent parties, providing you with information without giving away your position. (This is true whether you’re a buyer or seller.)

If you’re a buyer, realtors can save you a ton of time. As long as you are clear and specific about your needs, a realtor can filter through all the properties for sale so you only see ones of interest to you. Also, realtors are likely to hear of properties coming on the market before the general public, putting you in a position to know sooner.

The idea of saving money with a For Sale By Owner (FSBO) isn’t really accurate. From a seller’s perspective, unless you’re a marketing genius, your property just won’t get the same exposure it would with a realtor. And, advertising can get expensive. If you are not well versed in real estate law, mistakes can also be very costly. Not surprisingly, most FSBO homes end up being listed with a realtor.

On the buyer’s side, you do all the work and receive none of the benefits of an agent. Without a realtor, you may not know what’s for sale or what legal rights you have, what sellers should provide and/or pay for, or other legal issues. And, real estate contracts have a lot of details. If you aren’t familiar with them, you may agree to things you shouldn’t.

Whether you are buying or selling a home, if you have a smart phone you can download a free app that will give you a lot of information about what’s for sale. Text “Selzer” to 87778 and you’ll be sent a link to an app that uses your location to identify all properties in the MLS (not just Realty World listings). It also offers recent sales so you can compare your property to others.

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Getting Through Escrow

With so little inventory available, the market is shifting to a seller’s market, even with rates at record lows. So, if you’re a buyer fortunate enough to have signed a purchase contract and gone into escrow, here’s what you need to know to complete the process.

First, let’s define “escrow.” Escrow is a neutral place where money and property are both safe. An escrow officer is like an impartial judge who makes sure everyone keeps his or her word. The escrow officer has a fiduciary responsibility to all parties (buyer, seller, and lender). When all the conditions for the transfer of property are met, the escrow officer oversees the exchange of the deed for the payment.

As a buyer, you may have already worked with a lender to become pre-approved for a loan. If not, you’ll need to find a lender and get all your financial information in order (see last week’s column for details on what you’ll need).

Hopefully, you’ve been working with a real estate agent who walked you through the process of carefully outlining contingencies you need, exactly what is included in the purchase and who will pay for inspections, any repairs, closing costs, etc.

Inspections are a big part of an escrow. My advice to buyers is to take advantage of as many inspections as you can. Yes, you will probably have to pay for them, but better to know what you’re buying, than to end up with nasty surprises after the property is yours. Unless you are buying a property and planning to tear it down and build from the ground up, order inspections!

Here’s a list to consider:

○     Home Inspection

○      Electrical

○      Plumbing

○      Roof

○      Heating & Air conditioning

○      Foundation

○      Structural

  • Well – both quantity and quality of water
  • Septic – physical condition of the tank and function of leach field
  • Pest and Fungus – check for dry rot and bugs, both of which are abundant in Mendocino County
  • Hazardous Materials – e.g., asbestos and lead paint. Although both were outlawed in 1978, contractors still had supplies on hand and sometimes used those supplies illegally for some time.
  • Soil/Geology – if you are unsure of the history of the property and plan to plant vineyards, for example, you will want to know what you’ve got. Are you on the side of a cliff that may be about to give way? Check it out.
  • Energy Audit – are you going to need new windows and insulation as soon as you purchase the house? Best to know ahead of time.
  • Structural Engineering – two-story house with cracks in the walls, any house with cracks in the foundation? In addition to inspections, making sure you are aware of any liens, easements, or tenant rights connected to the property can save you from big headaches later. Many easements aren’t a big deal; they assure that your neighbor can access their driveway or that a utility company can pass behind your property to access communication or electricity lines.

However, some legal restrictions could prevent you from inhabiting your home for several years or require you to pay bills that weren’t yours in the first place. An easement through the only building site could reduce the value of the property dramatically. If the property has renters, be sure to get written verification of the rental terms (called an estoppel agreement). Because, verbal agreements are only worth the paper they’re written on.

The escrow process is based on everyone acting in good faith. If inspections or the preliminary title report indicate problems, the buyer can withdraw from the contract if the seller is unwilling to remedy the problems. However, the contract is a legally binding document, so there must be a compelling reason to dissolve the contract. Most escrows go through, and the property changes hands in 30-45 days.

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