What You Should Know About The Home Seller Disclosure

Home seller disclosures are mandatory in many states and are becoming more common regardless of the state or federal requirements. A home seller disclosure is statement signed by both the home seller and the buyer listing all the pre-existing conditions of a home that could potentially affect the property value or future ability to sell.

A home disclosure is the responsibility of the seller – not the realtor or listing agent. While guidelines and disclosure forms can vary state to state, a federal disclosure for lead-based paint is required if the home was built prior to 1978. In fact, most disclosure guidelines are directed at older or existing homes, rather than new construction.

Material Facts are an important part of seller disclosures. A material fact can be any defect or situation that can impact the buyer’s decision to move forward on the purchase or the price and terms of the property sale. Here are some examples:

  • Structural defects
  • Property taxes
  • Fire or flood damage
  • Death in the home

Personal situations such as divorce, separation, job loss and other intimate matters are NOT material fact and do not have to be disclosed.

In new subdivisions, builders may choose to give additional disclosures such as future land use plans for new roads, new commercial projects, transportation intrusions (like air or rail traffic noise) and other issues that could impact a person’s decision to choose a certain neighborhood. While these disclosures may not be mandatory, current trends lean toward over disclosure to avoid possible litigation down the road.

Home seller disclosures are another piece of the home buying puzzle, but with a little due diligence, you can make them fit. Know your rights, and know what you are buying, and all the pieces will fall into place.


The Closing Process

You have searched for homes for weeks, visited several open houses and now you have finally found the pefect home.  The final part of the buying process is called closing. For firstime homebuyers, this final step can  be confusing and may leave the buyer with many questions. Below are a few clarifications.

What exactly is closing?

Closing  is an arrangement in which a disinterested third party, called an escrow holder, holds legal documents and funds on behalf of a buyer and selle. They then distribute them according to the buyer’s and seller’s instructions. The escrow becomes the depository for all monies, instructions and documents pertaining to the purchase of your home.

How does the closing process work?

When you close, all monies, instructions and documents necessary for the purchase of the home, including funds for the down payment, lender’s funds and documents for the new loan are held in escrow. The duties of an escrow holder include: following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with instructions; paying all bills as authorized; closing the escrow only when all terms and conditions have been met; and, distributing the funds in accordance with instructions.

What information will I have to provide?

Typically you will be asked to complete a statement of identity as part of the necessary paperwork. Because many people have the same name, the statement of identity is pucused to identify the specific person in the transaction through such information as date of birth, social security number, etc. This information is kept confidential.

How long is the closing process?

The length of closing is determined by the terms of the purchase agreement and can range from a few days to several months. Typically it can take  an average time of 30 to 45 days.

Who is responsible for the closing costs?

How the charges for the services performed during closing  can vary.  The fees and service charges to be divided might include, the title insurance policy premium, escrow fee, and any transfer taxes. Unless there is some special agreement between the buyer and seller as to how these charges are to be paid, local custom will generally be followed in drafting the instructions to the escrow holder as to how they are to be divided.

When does the closing process end?

The closing process ends when all funds are transferred accordingly, when all documents are signed, and when you get the keys to your new home.


How To Have A Successful Negotiation

When it comes time to sell your home or if you are buying a new home , you will come to a point in the transaction where you will need to have a negotiation.  The negotiation process can be both complex and confusing for both sides. Of course the seller wants to get the highest amount they can and the buyer also needs to feel they have achieved the best deal. If  this is your first  negotiation or even if you are seasoned at this process, below are some tips to help you get the most from the negotiation transaction.

1. The current real estate status is a “buyers” market, where most sellers are very motivated to sell, this can give a buyer the upper hand. On the other side, in a “sellers” market, or a market where housing supply and demand are roughly equal might give the seller an advantage. If possible, you want to be in the market at a time when it favors your position as a buyer or seller. 

2. Always pay attention to the details. Buyers and seller pay a lot of attention to the actual transaction price. Don’t overlook the  other perks or benefits that can add to the overall worth. For example, if you negotiate that the roof be replaced or perhaps having the seller pay some of the closing costs this can sweeten the deal. Don’t be stuck with the idea that the purchase prince is the only financial gain to the transaction.

3. Don’t forget about financing. Keep in mind that there are several factors that can impact the final sale:

 • Has the buyer been pre-qualified or pre-approved by a lender? Having buyers that are “pre-qualified” or “pre-approved” are more likely to pose less risk than a buyer who has never met with a lender. This also shows the seller that they are serious about the offer and will give the seller more confidence. that they are a qualified buyer.

 •If there is a low interest rate, then there will be a larger selection of potential buyers. More buyers equal more potential demand, which is good news for sellers. On the downside, high interest rates will cause buyers to be more selective or cause them to withdrawal from the market all together.

 •The traditional 20% downpayment is not standard anymore. If the buyer has good credit, loans with 5 percent down or less are now widely available. Many loans where 100 percent financing are still available, although not as much as a few years back.

 Negotiation is an important tool of the real estate transaction. To be a successful home seller or buyer you should have a basic understanding of negotiation methods, knowing the motivation of the other party and adapting to their style.

Federal Reserve Stops Mortgage Purchases

A recent article  from the NPR indicated that The Federal Reserve will stop buying mortgage-backed securities on Wednesday March 31. This marks the end to a massive program that’s been helping the housing market recover.

When the economy showed signs of decline over a  year and a half ago, the government wanted to drive down interest rates for homeowners to stimulate the economy by making it cheaper to buy or refinance a house. The problem was that lenders were not issuing loans, even to homeowners with good credit. As a result, interest rates rose. 

The Federal Reserve aimed to solve this problem by buying up a lot of mortgages. Because of this, they became the largest mortgage-backed security investor in the world. In fact the total amount of mortgage-backed securities now totals more than $1.2 trillion worth in all.

The Fed was buying 90 percent of new mortgage-backed securities and now is only buying about 30 percent or less. As of April 1, 2010 they will stop buying altogether. So the question is what happens then? Barry Habib, chairman of the board of Mortgage Success Source, which tracks rates and trends for mortgage brokers, says that when the Fed stops purchasing these securities, it will leave a vacuum in the market that will push up interest rates.

What many people don’t know or understand is that the government actually has been making quite a bit of money on this program. The U.S. Treasury earns about $50 billion a year from interest that homeowners pay on loans the government owns. However, there is the risk that some of the more than $1 trillion worth of home loans that might go bad.

Relocating Your Automobile

If you have purchased a new home and are relocating to a new city that is a good distance away you may need to make a decision about how you will move your car.  If you are relocating across country, you may not want to get behind the steering wheel for thousands of miles as well as put the mileage and wear on your vehicle.  Fortunately, there are some differrent options available for you and your vehicle.

Some people who have older cars find that it is easier to sell their cars or donate them to charity for a tax deduction before they move.  However, if you are like most people,you will want to keep your car rather than going to the expense and trouble of purchasing a new vehicle once you reach your new home. 

Many businesses specialize in transporting your vehicle for you.   There are three basic methods of getting your car to your new home if you are not going to drive it yourself:

  • Moving your car in the same van that will haul your household goods
  • Using a professional auto mover
  • Hiring someone to drive your car for you

Moving your car in the same van as your household goods is as easy as driving it up a ramp and into the van, where it is secured in a separate compartment from your furniture and other goods.  A reputable moving company that provides this service will give an accurate estimate and references long before you drive your car on board.  Cars are heavy, though, so this can be an expensive method.  However, it is the method most guaranteed to put you back behind the wheel as soon as the moving van unloads.

Professional auto movers specialize in transporting vehicles on an open or in a closed truck.  Some provide hub-to-hub service (you will have to go to a central location near your new home to pick up your vehicle) while others provide door-to-door service (they pick up your car at your old home and deliver it to your new address).   Professional auto movers are highly expert at getting cars and other vehicles safely from one place to another.   However, unless your car mover coordinates perfectly with your household goods mover, you may find that you reach your destination before your vehicle does.

If you decide to have someone drive your car for you, consider a company that matches drivers with vehicles needing transport.  In this case, the company should screen drivers carefully and assumes all insurance liability for the trip.  Drivers usually pay their own expenses after the first tank of gas, so the cost of transporting this way tends to be reasonable.  However, if you don’t like other people driving your car in general, this is definitely not the method for you.   Coordinating arrival time with your move-in date may also be a little more difficult. 

Before letting any company or person take your car, be sure  that your car will be inspected carefully.  Any pre-existing damage, marks, and wear should be noted.  The company you hire will provide insurance coverage for your car, so this pre-trip inspection is an important step.  It is a good idea to take pictures or shoot a video of your car before the move for your own records.

Here are a few tips for the move:

  • Disclose any mechanical problems your car is having, especially if you are going to work with a company that provides a driver to get behind the wheel for you.
  • Deactivate your car alarm if you are shipping your car in a van or on a truck.  This prevents the draining of your battery if the alarm is triggered while the car is being moved.
  • Make sure there is fuel in your car so you can drive it at your destination.  A quarter of a tank should be plenty.  If you are using a driver, you will probable be expected to deliver your vehicle with a full tank of gas.
  • Roof racks, bicycle racks and other non-permanent accessories should be removed if transporting in a van or on a truck. 
  • Remove valuables from the car.  If you have an automatic pass for commuting on toll roads, take it out of the car too so you do not receive any unintentional charges during the trip.

There are many choices available if you need to move your car that can help to take some of the stress out of relocating. Do your homework and compare costs and always get references and proof of insurance.