Posts Tagged "mistakes homebuyers make"

How To Lose Your Home in Less Than 10 Minutes

Posted in For Buyers, General Musings

Most people think that having condo insurance is like having renter’s insurance, you need to cover your personal possessions and the rest is covered by the master policy of the HOA, right?  That’s what you pay your HOA dues every month for…well, sorta right.  Here in Utah we have Utah Condo Law that specifies ,( well , they didn’t really put it like this, being an official law and all, but this is what it means), if you took your unit and turned it upside down, everything that falls out is what you as a homeowner would be responsible for insuring. Pretty straight forward, right?  Well, the fly in the ointment is that community CC&Rs (the bible by which Condo and PUD communities live by) can override this very same provision in the law!

First, a bit of background.  This is the story (true by the way) of an older lady who lives with her daughter and grandson in a beautiful condo community in Salt Lake.  She , we’ll call her Freida (name is changed to protect the innocent) lives in a stack unit community (apartment type condo where there are 3 levels).  Frieda and her family and 2 cats live on the first level. 

One day in December (well, more like a week I guess) we had sub freezing temperatures, which unbeknownst to anyone, froze a fire sprinkler pipe up in the attic of the top unit (which is technically common space since it is directly under the roof of the building).  So….

When the weather warmed up, the frozen sprinkler pipe cracked, blowing out the sprinkler head and priming the fire system, which being the dutiful and reliable fire system that it was, began pumping hundreds of gallons of water through the pipes, drowning all 3 units beneath it.  All 3 units suffered 10s of thousands of dollars worth of water damage. 

The HOA (Home Owners Association) thought they had primary insurance (since the bad happened in a common area) so called their insurance company to begin the claim and start damage repair in all the condos, including Frieda’s unit.  This was on a Saturday to boot, not too many folks around to consult with, so the idea was to get Frieda, her family and cats to a dry and warm place. She was quickly moved to a hotel where she could be comfortable during the month to 2 months she would need for the recovery of her unit.  Incidentally, this happened the week before Christmas…talk about Yule tide cheer. 

On the following Tuesday, the HOA got the news that their CCR’s specifically state that the individual owner’s insurance policy is primary, and the HOA policy is actually prohibited from covering ANYTHING inside an owners unit.  Nada.., nothing,… not even a split hair on her cat’s head.

The two homeowners above her had more than enough insurance to cover the damage, but Frieda and her agent had decided on minimal coverage to only include personal property and a slight structural provision of 18,000.  The disaster clean up (removing the water, drying out the condo, and ripping out what was damaged, basically gutting the unit) alone amounted to more than 15,000, leaving her very little to replace sheet rock, insulation, baseboards, carpets, painting etc.  and living in a hotel for 2 months.

Long story short (too late you scoff), she is now digging into her limited savings to cover the cost of her disaster.

The moral? If you own a home, whether it is a condo, townhome, single family home, twin home, modular home or tree house, Check out your insurance, talk with your agent, read your CCR’s,  and make sure you are covered correctly for the cost of a disaster.

A Hard Lesson For Homebuyer To Learn

Posted in For Buyers, General Musings

Are You Frustrated with Homebuying?

Recently we responded to a homebuyer on Trulia who was learning a hard lesson.  His remarks were difficult to hear because they were filled with frustration for the Realtor(and I am one of those darn Realtors…only the darn doesn’t apply) who sold him the home. Now that he has problems with what was promised in the contract, he can’t seem to get hold of his Realtor. (No, I did not sell him the home…I am just a fellow Realtor type person)

In all fairness, I don’t know enough about the situation to condemn the Realtor, or the buyer, or even the seller, but I Have observed other situations where a Homebuyer is left hanging out to dry.  So, I am going to concentrate on New Home Construction with a “Here Are Some Rules To Live By” Attitude.

1.  Use a Buyer’s Agent. 

There are so many contracts to read, decisions to make, and details to be handled, you need someone on your side to protect your interests. You need someone who has a fiduciary duty to you, not the builder. Make sure the agent you choose is familiar with new construction homes and builder’s contracts. Ask questions up front, and make SURE that your agent knows how to represent a buyer, not all agents do ya know.  And above all, make sure that you are comfortable with whomever you choose.

 The friendly model home agent represents the seller (the builder), and even though they have to promise to treat you fairly and honestly, they are not representing you. Everything they say or do is for the builder’s best interest; this is what they are contracted to do. Don’t get me wrong, this also not a bad thing, the builder has a right to be represented, just know the difference.

2.  Read your contract. 

 I can’t emphasize this enough, especially if you are dealing with a builder.  New Home Builders write contracts on their behalf (which is not a Bad thing, but you need to know this going in), not to protect you as a buyer. 

3.  Make sure that all terms and conditions are in writing

There is no such thing as a “verbal contract” in Real Estate. If you are buying new construction, make sure you have all the extras that are promised in writing with an authority signature i.e. someone who has the right to sign the contract.  So, if you were promised a built in microwave in stainless steel, but you did not see one in the house, you and your agent can go back to the contract and make it happen.

4.  Keep up to date. 

Go by the construction site (your agent will or should do this as well) to find out what is going on.  We had an situation not too long ago where our client’s new home was supposed to have been finished by October 15^th.  We were working on a deadline on his loan that involved “First Come First Served” grant money, and could not apply until the home was completed. Turned out the builder had mixed up the lot numbers and thought that it Was finished.  We called and complained, and called again and complained.  By the 3^rd time, they had corrected the error, but if we had not “kept up to date” and kept in touch with the builder, our client could very well have lost out not only on the grant money,( and therefore his ability to purchase the home), but the builder’s contract had also made the earnest money non refundable, so that would have been forfeit as well.

5.  Do 2 walk throughs BEFORE you close on your new home.  

On the first walk through,  make your punch list , use the infamous blue tape to mark the spots that need touch up, take pictures…(well, not of every piece of blue tape, but of a missing microwave for instance, you get the idea).  Keep a record of everything that needs attention.  Once the builder has your list (hopefully from your agent), plan to go Back through your home the day of closing to see what has been done and what has not.  Once you close on your home, you don’t have much leverage and the builder has less motivation to return your calls, so the more you have written, the better off you will be.

Do all these things,

and you will have a much better experience in buying your new home.  If you have any questions, call, text, or email us…or better yet comment on this blog and we will answer so that everyone can benefit from the information.  Ciao’

You Might Be Turning Your Realtors Hair Gray!

Posted in For Buyers, General Musings

So, if you love your Realtor, if you want to save and protect them as the rare and wonderful people they are, Don’t Do This!

1.   Quit Your Job.

Big NO NO. I know that sounds like …duh…but folks do it.  One of our buyers not only quit his job, but he did it 5 days before he was to close on his loan.  Didn’t think it would make any difference to anyone.  He had taken a job that actually paid less money, but thought he was making more because his new employer did not offer insurance, so he wasn’t getting that taken out of his check.  On top of that, he told no one.  His lender called for a final verification of employment the Friday before we were to close and was told he no longer worked there (lost about half a head of hair over that one).  Needless to say, he did not qualify for his loan….AND lost his earnest money. He is now happily living in Kentucky…with his mother.

2.  Declare Bankruptcy In The Middle Of Buying A House

Ok, we would Also think this was a big duh, but it has been known to happen. Ok, it happened to someone in our office during the height of the housing boom.  I’m sure that it would never get that far in todays’ loan climate, but strange things have been known to happen. This also comes under the heading of Loan Fraud, so keep your Realtors’ hair, and yours, disclose all.

3. Spend Money You Don’t Have

Sometimes we as Realtors have to remember that We know this stuff, but our clients may not. We had clients who had a large tax refund deposited into their account….which was being used for the down payment on their new home no less, and suddenly they got the itch to spend it.  Bought a refrigerator, and various things they felt would be needed in their new home, ok well they Wanted it for their new home, and saw nothing wrong with spending several thousand dollars of the money that was earmarked for their down payment.  The lender called for a verification of funds from the bank, and lo and behold it was not all there! There was indeed a lot of weeping and wailing and gnashing of teeth, but we finally managed to get everything taken back, refunded and put back into the account.   There were at least 24 new worry lines on my face after that one, oh and many new thinning and graying areas on Steve’s head (I can’t take All the gray strands or the loss of hair now can I?)

4.  Use A Relative For Your Home Inspector

Now, don’t get me all wrong, when you are a first time homebuyer, you naturally want opinions from those who are close to you.  You sometimes need that validation from parents or relatives to give you the confidence you need to push on and complete your home purchase….I get that.

However, it has been my experience that some parents and relatives will try to find everything they can to show you why you should not buy the home of your choice.  I have seen relatives who felt it was their duty to report every single default in a home, and give the same weight to a plug cover missing a screw as they would a furnace about to explode.

One of my clients had an uncle, who was a city inspector, come to her condo. He proceeded to condemn the inside, because he would never have approved the plugs in the living room being 7 ft apart rather than 6.  He  was also suggesting we have a sound proofing test done because he worried it wasn’t up to code, and was ready to tear down walls to look at the construction underneath the sheet rock.  My clients father, however, being the wise man that he was, said “This may not be perfect, but is this condo going to fall down, is this place sound, or do we need to find another place?”, to which the Uncle replied, “No, actually the place is pretty great, I was one of the inspectors on this project, and I like the builder”.  At that point, I was ready to kiss feet and proclaim the dad King.

My rather long winded point here is that sometimes relatives (as much as we love ‘em) will offer a very subjective view any issues associated with your home, so you are better off with a 3^rd party’s objective view on a home inspection. They will give weight to the serious problems, tell you which issues are minimal, and even offer solutions, so that you can make informed decisions.

Well, I have run over my allotted space for this post, stay tuned for other Gray Hair Turning activities, but remember we are here to help you in any way we can.  We love our clients, love to serve them, love to answer questions, love to help them through any challenges…but if you are indulging in gray hair turning activities… Stop It!

Buyers Mistake Costs Him His Home!

Posted in General Musings

Another Scary  Thought!
It seems almost bizzare, but here it is.  The buyer in this news video (who did not have anyone representing him by the way) actually moved into a home he did not own. No one, not even the buyer himself  really caught what happened, but as the news story states, had he used a Buyers Agent to represent him in the purchase, this probably would not have happened.  So, buyers beware!

Another Holiday Safety Tip: Use a  Buyers Agent, it costs you nothing to have representation from an experienced buyers agent… but as in this case, it could cost you big time NOT to use one.

More Scary Thoughts…

Posted in General Musings

In keeping with Halloween this month, I have been looking for scary Real Estate , so here is a video I found on You Tube that I thought would give you a laugh:

Now….. Hum the Ghostbusters theme here…

When you want to buy…….or sell a home…

Who Ya Gonna Call?

Home Finders (Salt Lake)

We ain’t ‘fraid to sell homes