School is Now in Session!

Now that school is back in session, I keep thinking about the "fundamentals" or things that are important during a transaction that might not seem so important to buyers or sellers.  With everything going at such a fast pace, its easy to let things slip by for fear of having to spend more time than necessary with "boring" things like paperwork.   Each area of the country comes with its own "special needs" areas requiring proper disclosure.  For instance, here in Hampton Roads, Virginia you might come across issues such as - flood insurance, historic districts, transportation and roadway concerns, military air disclosures for noise/accidents and the list goes on and on.  Buying and selling have the same basic principles across the board no matter where you live, but its always good to ask about any special concerns regarding your home purchase/sale.  Do not be afraid to ask your Realtor if there is something you don't understand!  There's never a dumb question - just don't be silly by not asking because you think you should already know the answer.  If you don't ask, you may second guess yourself or not be prepared.  The more information you have, the better informed you will be, helping you to make the best decision you can make.  Here are a few good things to make sure of when buying or selling:

• Do you have an agreement in writing outlining each parties duties and responsibilities?  This includes the agreement between you and your Realtor in addition to your sales agreement with the buyer/seller.
• Do you have a copy of everything that you have signed including any changes/amendments to your contract?  This should include any state required disclosures, buyer broker agreements, etc.
• Have you read everything you have signed that your Realtor has gone over with you?  I know its kind of boring to read legal mumbo jumbo, but its there for your own good - and protection so that you don't make a decision without knowing all the details.
• Do you understand what you have signed or gone over with your Realtor? 
• Have you asked questions to clarify anything you haven't understood?
• If this is your first time buying/selling, its a good idea to have your Realtor type up a tentative timeline so you can keep track of "what happens next?"

Buying/selling can be exciting in a good way - make sure you are a good student and READ, UNDERSTAND and ASK QUESTIONS when you don't!

Need to buy or sell in the Newport News, Hampton, Williamsburg, York, Poquoson, Smithfield, Isle of Wight, Suffolk or outlying areas?  Give me a call.  I'm at the helm of it!

Purchasing a home that has been "flipped"

When buying a home that has recently been "flipped" (meaning that an investor has purchased it to renovate it and place it back on the market in a short period of time for a profit), please keep in mind that you should have your agent look up the date that the property was last sold and how the investor purchased it.  If the investor bought the home using an FHA Loan, then there could be conditions that prevent the seller from selling the house within a certain time frame.  (Currently, the rule of thumb is 90 days but of course things change, so check with your local lender for more up to date information as time goes by.)  Most folks think that the 90 day rule is for settlement only.  But its not.  It means that the seller cannot even get a contract on the home until 91 days after the home was last purchased. 

So here's the deal...if you have a buyer interested in one of these homes and you find that you have written the contract prior to the 91 days, check with the lender to see if it would fall under the waiver criteria that is currently in place.  The lender may require a long list of things like - a second appraisal, a cma, a copy of the listing, a copy of the home inspection report, a copy of the deed when the seller purchased the home, and the list goes on.  And even though you may have to delay closing and jump through a few hoops like a circus clown, at least it wouldnt be a total loss and your buyer could still buy the home they fell in love with!

Lesson Learned #5,248

Okay, so the 5,248 is not an EXACT number.  And unfortunately, I am sure in reality its probably a much higher number.  I am writing to share a rare occurrence in my real estate journey....I recently helped a relocating buyer/family purchase a home here in Hampton Roads.  The home was a bank repossession.  What this meant for my buyer was that the home would be sold on an "as-is" basis, meaning take it or leave it for the buyer because of the lower than market value price.  The buyer was in this case allowed to have a home inspection and there were no "deal-breaking" issues so everything proceeded as normal.  Getting closer to the date of settlement, we received a call from the title company stating there was a problem with the deed.  Apparently, when this home was repossessed, it was bought by Lender A.  No issues there.  WELL....unfortunately when the sale was complete for Lender A, the deed was written up to read that the seller was...oops...Lender B!  So what we had was an error (big one) that prevented my buyers from closing until Lender B signed that they were never the owner and had no interest in the property.  The problem was that if it didnt get resolved, the buyer didnt have a valid contract with the rightful owner, Lender A, because according to the deed, they never owned the property. 

How in the world does a lender who has attorneys review every morsel of paperwork, miss something as huge as their NAME on the deed?  Even though this doesnt seem like an earth shattering big deal (have Lender B sign an affadavit stating that Lender A is the true and rightful owner) the issue was that the attorneys needed to review every nook and cranny (since now they were in the hot seat) to ensure there were no other mistakes.  Getting a lender who is already back logged with short sales and foreclosures to drop everything (right before Christmas) to consult their attorneys to review and make sure they are "held harmless" as to any claims or issues with the property and state they were never the owners, took weeks.  

Everything turned out fine in the end, but my assumption here is that with the many foreclosures and short sales going on and the rate at which they are happening leaves lots of room for human error. My lesson learned is to remember to educate the buyers with as much information and disclosure as possible.  I had already forewarned them that purchasing a bank repossession and/or short sale could take months to get closed.  This was the first time in 10 years and hundreds of transactions that I have seen this particular situation. We cant prevent every bump in the road from occurring, but we sure can do our best to educate which in turn will help navigate through the rough spots.

Not every deal is perfect and not all transactions require miracles.  Need help in real estate?  Call me, I'm atthehelmofit.com