More Real Estate Questions Answered

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Question: My recent closing on a home I was buying was scheduled for 5:00 pm. At 4:00 pm when my bank was closing for the day, I still did not know how much money I needed to bring. I was unnerved and furious. Why couldn’t my closing agent get me a figure hours, or even days, earlier?

Answer: Most likely, you can blame your lender for creating this common, yet stressful situation. A closing agent (an attorney or title company) cannot put together the final settlement until they receive all the charges and fees from your lender. Lenders often send those figures (which include bank loan origination fees, daily interest charges, appraisals and more) at the very last minute. If you must go to your bank before you get the final figures, I recommend to my clients that they get about $1,000 more than the estimate amount received from the bank early in the loan process. If that turns out to be more than you need, the closing agent will typically refund you on the spot. To avoid the problem, consider asking your closing agent before you pick a lender which ones are better at providing the figures early.

Question: I am selling my house “as is.” Do I have to tell the buyer about the leak in the roof?

Answer: Yes. Even though your contract says the sale is “as is,” which means you do to have to make any repairs to the property, the law requires you to disclose all the major defects in your house which can’t be obviously seen. You don’t have to point out every paint chip or carpet stain, only problems, as the law puts it, “materially affecting the value of the property.” It is best for this disclosure to be in writing so that later the buyer cannot say you never told him.

Question: I recently sold my home in Palm Beach County and am about to close on a home in Coconut Creek. I know that I paid the owner’s title insurance when I sold my place, but the closing agent says I will be paying again when I buy. How can that be?

Answer: Each county has its own customs, and in Broward as in many other Florida counties, the buyer typically pays for the owner’s title insurance (which protects buyers from claims on the ownership of the property). In Palm Beach County, however it is customary for sellers to pay the title insurance premium. (Legend traces this practice to a fire years ago where many county real estate documents were kept, so sellers didn’t prove their property’s chain of title.) Owner’s title insurance premiums can be pricey – the higher the purchase price of the home, the more the insurance costs – but it is well worth the money. Do know, however, that like everything else in a real estate contract, it is possible to negotiate which party will bear this cost.

Your Real Estate Questions Answered

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Question: I am selling my house and the closing is set for Friday afternoon. The buyers need to move out of their home Friday morning and want to move their things into my house before the closing.  Since we are closing that afternoon, it seems fine to me. Is there a downside?

Answer: It is never a good idea to allow a buyer to move into – or do remodeling work in – a house they do not yet own. While is all likelihood the closing will go as smoothly as everyone desires, there is always the possibility for last-minute glitches (the loan doesn’t go through, the buyer’s closing on the sale of another house for which they were depending on money doesn’t proceed on schedule, etc.). Plus, there is the rare buy real chance, especially if they are moving heavy objects or doing major remodeling, that the buyer will injure himself in your home; as the owner, you will be responsible. I always tell my clients to make me the bad guy; tell them you would love to accommodate their wishes but your attorney will not let you.

Question: When I moved here four years ago, we rented out our old house rather than selling it. I went to see an accountant recently, and he tells me that I will owe capital gains on the house when I sell. I thought you didn’t get taxed on capital gains when selling your primary residence, which this was for 14 years. Am I really out the tax break?

Answer: Alas, you have fallen into a trap increasingly snaring South Florida homeowners who have hung on to their old properties. Federal law allows homeowners an exclusion of up to $250,000 if single, $500,000 if married, from capital gains on the sale of a personal residence. However; the law states you qualify for this exclusion only if you have lived in the house for two of the five years. Had you sold three years after you moved, you likely would have been able to claim this exclusion. Now that it is four, however, the property is no longer considered your primary home for this purpose.

Question: I made an offer on a townhouse that I love. The seller accepted it. But when I told the real estate agent I wanted to make a few changes to the contract, she told me it was already a done deal. Is this true?

Answer:  In some other states, you make the offer, it is accepted, and then you negotiate the contract to the satisfaction of both parties. In Florida, it is typical to make the offer by presenting a signed contract. Many people don’t understand that this is a binding legal document. You can still ask the seller to agree to your requested changes, but he is under no obligation to do so. Next time, avoid this problem by writing “subject to review and possible amendment by my attorney within three business days” at the bottom of the contract, then have your lawyer look at it.

 

What should you look for during a walk-through of the property you are about to buy?

The following is a checklist you might want to take to your prospective home when you conduct a walk-through (frequently, the Realtor will accompany you or, for a fee, you can have the inspector join you). This list is intended only to help you with the process, and may not include everything you should examine in your new home.

You should bring a copy of the inspection report, to check that all items flagged by the inspector have been repaired. It also helps to bring a small night light to plug into outlets around the house to ensure that all electrical sockets are working.

OUTSIDE THE HOME, CHECK:

  • All landscaping, to be sure it is in healthy condition.
  • Sheds, swing sets or other items you will be buying with the home, that they are still there and in good condition.
  • Doors, to detect any damage that may have occurred as the seller moved out.
  • Doorbell, that it works, along with any intercom system or garage door opener.
  • Outside lights, that they work.

In the living room, family room, and bedrooms, Check:

  •  Walls and floors that may have been blocked by furnishings, carpeting or stored items earlier.
  •  Doors and windows, including that all blinds or window treatments work properly.
  •  Flooring, to ensure it is in the same condition as when you saw the house.
  •  Lights and fans
  •  Outlets
  •  Fireplace, if your home has one.

In the kitchen, Check:

  •  All appliances, to ensure they are working properly.
  •  Sinks, to ensure the water runs properly and at the right temperature, and doesn’t leak in the drain lines below.
  •  Cabinets, that they don’t have additional damage or missing hardware since you saw the house.
  •  Flooring, to check for loose tiles not previously evident.
  •  Windows and doors
  •  Lights and fans
  •  Outlets

In all bathrooms, Check:

  •  Toilets, to be sure they flush.
  •  Sinks, to ensure the water runs properly and at the right temperature, and doesn’t leak in the drain lines below or clog improperly.
  •  Bathtubs and showers, to ensure the water runs properly and at the right temperature, and doesn’t clog improperly.
  •  Plumbing fixtures, to look for physical damage that was not apparent earlier.
  •  Flooring, to check for loose tiles not previously evident.
  •  Windows and doors
  •  Lights and fans
  •  Outlets

Other:

  •  Test and make sure there are proper smoke detectors and carbon monoxide detectors where applicable.
  •  Check that the air conditioner and heat work, by changing the setting and ensuring the unit responds.
  •  If the house has a swimming pool, check that the pump works properly.
  •  If the house has automatic sprinklers, check that they work properly.
  •  If the house has a screened patio, check that the screening and doors are in the same condition as when you saw the house.