Real Estate Contract Traps & Pitfalls: 5 Ways Home Buyers Can Learn from Indiana Jones

Looking for a home can be an adventure – but buying one shouldn’t play out like an Indiana Jones movie. If it does, it can take some serious legal maneuvering to rescue a deal that could have stayed as safe as Dr. Jones before he landed in India.

Indiana Jones Real Estate Pitfalls and Traps

The traps and pitfalls that await you in the contract phase could spell out problems including:

  • losing your deposit to the seller
  • losing financing
  • scrambling to find a real estate lawyer in the 11th hour

Excluding snakes or crocodiles, you’re doomed if you ignore the fine print, critical dates, or how you communicate with the seller.

Here are 5 ways you can learn from Indiana Jones, when closing (in) on your prized possession:

1. “X” Marks the Spot

Sign, sign, sign. Your contracts, including the Offer, Purchase and Sale Agreement, and Commitment Letter, should remain as ironclad as the Ark. No matter what, make sure your agreements are in writing and signed by all parties. The seller can surprise the buyer during the final walk-through—when the buyer realizes the seller removed property (chandelier, washer/dryer etc.) that was originally discussed verbally as part of the deal. If it’s not in writing, it’s gone for good.

2. Timing is Everything

There are critical dates involved during the Purchase and Sale process that include home inspection dates, financing and, of course, the closing date. Be sure to “whip” everyone into shape before the ball flattens your deal by agreeing to extend your dates (in the form of a written extension) if necessary – or the whole expedition could be in grave danger.

“You’re gonna get killed chasing after your damn ‘fortune and glory!'”

“Maybe. But not today.”

Indiana Jones

3. Use Caution (with Your Communication)

You can inadvertently give your seller an easy out if you don’t stipulate in writing how both parties plan to communicate. This can come into play when the buyer requests an extension. “I never got the email, letter, fax,” is a common way sellers can make a quick get-away and destroy the entire agreement, leaving you in the dust.

4. Don’t Get Stuck Holding The Bag

Along your journey, you may encounter an appraisal that’s below the sales price, well after you surveyed the area for danger. This means your bank will lend less even though you’ve already committed to the purchase. In this situation, you would need to pay more out of your pocket to compensate for the lowered bank loan. Your contract however, if it’s in writing, can save you. If the agreement states that the seller must work with you to address this issue, your deposit will not be at risk.

5. Make Sure You Have Back-Up

Whether it’s a savvy business partner or real estate lawyer in the background, you’ll wish you had another eye to help you navigate complex issues that can arise. This could be the biggest investment of your life. Make sure you consult a professional, experienced in real estate transactions, before someone replaces your treasure with a bag of sand.

Attorney Rob Pellegrini is a Boston Real Estate Observer contributor and is the former Senior Attorney at Cumberland Farms Inc. and Gulf Oil. He now runs a private practice specializing in Estate Planning, Real Estate, Land Use, and Zoning. Pellegrini enjoys working with clients on real estate matters to ensure the closing and purchase meet the buyer’s expectations and divides his time between offices in Bridgewater, Stoughton, Dedham, Newburyport, and Boston (2015).

Beginners Guide: Finding a New Home

You’ve just made the decision to buy your first house. It’s a scary and daunting task ahead of you. One which will take up a lot of your thinking time, even when you’re supposed to be asleep.

It’s extremely easy to make mistakes when you buy your first home, especially during the preliminary stages of the buying process. You can easily avoid the hassle of a bad purchase though, simply by gaining some of the knowledge other first time buyers don’t have.

Research Finding a New Home

Do as much research as you can about the properties you are looking at, the real estate company you are putting your trust in, the kinds of home insurance you could, and the process of buying a house. The more you know, the less likely it is you’ll be taken for a ride. Know as much as you can before you bring money into the mix.

Prepare for a Wait in Finding a New Home

You need to understand that your dream home isn’t going to pop out of nowhere for you. The home purchasing process is a time consuming thing, and you will probably look at hundreds of houses before you settle on placing an offer on one. In other words, don’t settle for the first house you like just because you want the process over with – Keep your options open and stay persistent.

Read Before You Sign Real Estate Contracts

It’s extremely important you read all documentation thoroughly and understand every last detail before you sign anything. If you are unsure about a clause, word, expression etc, and you need clarification, you are well within your rights to ask for it. If you are still unsure, seek guidance from a professional.

What New Home Can You Afford?

Bear in mind your budget and stick with it. There’s nothing worse than a crippling mortgage on your first house. Be sensible and realistic about what you can feasibly afford to pay off over the next few years, or you could end up losing money. Ideally a mortgage shouldn’t take up more than 36% of your total income.

Searching for Real Estate Online

Compared to ten years ago, it’s now far easier to search for real estate online.

Whether you want to find a commercial or residential place to rent or own, there are literately thousands of websites to search and find a property that meets your personal search criteria. You can even redefine your search based on the exact location where you need one. There are many search engines that can help you find one. And should you know the company which you want to work with in getting you the property you like, you can easily find information online about them if they have a website and check for yourself the services they offer. These companies can offer local and even international assistance in searching for different properties. And there are also various governing bodies who can give you access to records online for various properties which may be for sale or for rent in different locations. You can double check for the real owners of the properties that you are interested in. You can even verify the validity of the information you get from various brokers or agents.

For instance, you can check Boston homes that you are interested in complete with pictures, maps and other pertinent details online. In fact, you can compare prices of properties in one location as well. You have more options to choose from and compare with your physical and financial requirements. You can get a better idea as well regarding its community and the type of people who can be your possible customer or neighbour. The pictures can help you assess the property right away without having to go on a tripping and check them yourself. You can also locate them on a map online. You can see right away the closest landmarks and establishments which may be important to you for business or residential purposes. In the same way, you can check through pictures alone if it is in fact your dream business establishment or dream house. You do not need to spend on fuel and get there yourself. You save on money, time and effort and still get the same results.

And finally, you can also get all the information you need about the agent and brokers of such properties. You can deal with them online and discuss all your requirements which have to be met to finally close the deal. You can also have copies of property titles or deed of sale scanned and emailed to you for verification purposes. There is no waiting time needed. And if necessary, you can get their contact information online too and chat or talk to them right away. Information gathering is definitely faster online and when it comes to searching for property, you need worry about time constraints anymore. If you need to find one right away then all you need is a computer or a laptop and an internet connection. And of course, you should know how to refine your search to be able to find what you have been looking for. You can even email it right away to any business partner, spouse or family member who would need to decide as well in renting or buying the property. And of course, online they can double check it at their own schedules and see for themselves if the property you are talking about matches with their expectations as well.

What to Expect When Buying an Older Home

Purchasing an older home can have many advantages. Not only are older homes typically less expensive than new homes, but they are also generally located within well-established neighborhoods with plenty of nearby retail and dining opportunities. Furthermore, older homes frequently offer mature landscape and older trees that often cannot be found when purchasing new construction. On the other hand, there are some potential downsides to purchasing an older home. Whether looking at Boston or Bethesda homes for sale, before you make the decision to buy an older home, it is important to have a solid understanding of what to expect before you make a purchase.

Does the Home Have the Upgrades You’re Looking For?

While an older home may be less expensive to purchase than an older home, you may find that the home needs to undergo many upgrades before it meets your standards. The cost of replacing appliances, upgrading faucets and changing out cabinets in order to create a more modern look can be quite costly. The same is true of the plumbing and electrical systems, which may need to be replaced in order to improve efficiency or to reduce potential health and safety risks.

Is the Home Energy-Efficient?

In many cases, older homes are not nearly as energy-efficient as new homes. Not only do they have less energy-efficient systems in place, but the aging process often reduces the efficiency of appliances and other features. As such, you may find that you need to replace the windows in order to improve energy efficiency or that appliances and plumbing items need to be replaced in order to waste less water, gas and electricity.

When Do Major Items Need to Be Replaced?

Even if you are willing to deal with out-of-date features and appliances or even if you are not too concerned about energy-efficiency, you may find that several parts of the home need to be replaced shortly after purchasing the home. While the roof may still be in decent shape, for example, you will likely need to replace it far sooner than you would if you were to purchase a new home. The same is true of major appliances, such as your heating and cooling system. More than likely, these items will not need to be replaced within the first few years. Still, since these items generally are not new when purchasing an older home, you will likely need to replace them within the next ten years or so.

The bottom line is that, while an older home may be less expensive than a new home when you first purchase it, you will likely need to invest more money into your older home. Therefore, you need to take these factors into consideration when deciding on the type of home you wish to purchase.

The Secret of Real Estate Final Walk-Through Success

Before you close on the purchase of your home you have one more chance to view the interior of the house you are about to buy.  Don’t waste it.

This is the final walk-through and it is your chance to ensure that the house you are buying is the one you agreed to buy when you signed the offer to purchase.

I’ve noticed that how my clients approach the walk-through is a mixed bag. Some treat it with all the seriousness it deserves, while others offer nary a glance as they speed through the home.

So, what should a buyer be on the lookout for during the final walk-through?

Plenty.

First, you should attempt to conduct the final walk-through as close to the closing as possible.  The goal here is to reduce or eliminate the chance that something can change between the time you look at the property and when you sign the final HUD.  Aim for hours, not days, and ideally, the final walk-through should literally be done on the way to the closing table thereby eliminating the chance that the property can change.

If the seller agreed to make certain repairs, check first to ensure that those repairs were, in fact, made, to the specifications outlined in the purchase and sale agreement. If checking these repairs requires water, gas or electricity, and those services have been shut off, don’t close the escrow until the services are reinstated and you can perform your inspection.

Next, make sure that the rest of the house is in the same condition as when you made the offer. Go through each room and look for recent major damage, such as to walls, baseboards and flooring. Check the attic and basement to ensure the seller didn’t leave behind their unwanted junk. If appliances were included in the sale, check to ensure they are in working condition; run the dishwasher through an entire cycle, check that the icemaker in the freezer is in working order and that the refrigerator remains cold.

Check the plumbing by flushing toilets and running both cold and hot water through all of the faucets. Turn on the heater, then the air conditioner.

I once had a client that moved into her home only to find that the garbage disposer was missing. The sellers took it with them. So, tinker with everything you need to tinker with to assure yourself that all is as it should be.

The home should be at least swept clean – this is oftentimes called “broom clean” condition. If it’s not, request that the seller have it cleaned before you close escrow.

Don’t neglect the exterior of the home. Check that the sprinkler or other irrigation system is in working order. If there’s a timer, did the seller leave the instruction booklet? If not, ask your agent to get it from the listing agent or have the sellers buy you a new one.

Run pool and hot tub equipment, including heaters, lights and filters. Do you understand how to use the control panel for these items? If not, ask your agent to get this information from the seller.

After you’ve signed the closing papers, this house, and any problems, belongs to you. The time for due diligence will have come and gone and you may have little recourse for items you find after the sale. Take your time during the final walk-through, listen to your real estate agent’s advice and you can go to the closing table confident that you are getting what you’re paying for.

What to Expect When Purchasing an Older Home

Purchasing an older home can be a good decision. Not only can it help you save money, but it might also be your only option if you are interested in living in a certain neighborhood. Of course, older homes can also offer a certain kind of charm that cannot be achieved in newer homes and many offer mature trees and other well-established landscaping features. Before making a purchase, however, it is important to have a better idea of what to expect when buying an older home.

Performing Maintenance

When purchasing an older home, it is important to keep in mind that you will likely have more maintenance costs than you would if you purchased a new home. While there are no guarantees that a new home will not have problems, you are more likely to experience issues with an older home. Even routine maintenance issues, such as replacing your furnace or roof, are more likely to be an issue with an older home. Therefore, while you will usually save money when purchasing an older home, be aware that the money you save upfront may still need to be put into your home in terms of maintenance costs.

Addressing Safety Issues

Many older homes have certain safety issues that need to be addressed. When purchasing a new home, for example, you can be sure the wiring and plumbing will be in compliance with the most current safety codes. Older homes, on the other hand, may be grandfathered into the new codes. Therefore, if you want to ensure your home is as safe as possible, you may need to do some major work to get it up to code. As is the case with many Austin homes for sale and elsewhere, it is quite common in older neighborhoods for very few homes to already be up to code.

Making Upgrades

Even if your home is up to code and does not require any immediate maintenance, you may discover that the home needs some upgrades in order to compliment your lifestyle. Many older homes, for example, do not offer dishwashers, garbage disposals or other appliances that are commonly found in newer homes. Similarly, the home may not have energy-efficient windows, appliances or other desirable features. If you want to enjoy these amenities or other popular features, you will need to invest in your home in order to make the necessary upgrades.

For many people, purchasing an older home is the right decision. Before you decide to go this route, however, it is important to explore all of your options and to examine the pros and cons of each in order to determine which option is right for you.

How to Deal with Competing Offers in Real Estate

You’re a homebuyer, and you find yourself in a situation where your agent tells you that the offer that you just submitted on a home is one of several offers that the seller is now considering.  Does your agent know how to win against competing offers so that you get the home you want?

Perhaps more often than one would think, you have two or three competing offers on a home. It’s the experienced agents who can win the majority of the time against competing offers. They know how to work the contract, they know how to work the agent on the other side, etc.

What to Look for in a Boston Custom Home Builder

Nearly every neighborhood in Boston can boast luxury custom homes, but it is important to realize that finding a Boston luxury home neighborhood is just the first step in your homebuilding (or in many cases in Boston, home remodeling) process.

In particular, Boston luxury custom homes are not built by production builders (those that build many homes a year using just a few, set floor plans). Instead, they are built by custom home builders who have experience planning, designing and constructing true, custom homes.

If you are interested in luxury custom homes, then you must consider what to look for in your custom home builder. Here is what you need to look for when it comes to finding builders for luxury custom homes:

  • A custom home builder is someone who will either build on your land, in a development, or completely rework an existing home. They build one-of-a-kind houses that are built exactly to their client’s wants, needs and expectations. Builders who build Boston luxury custom homes will build you a home from a unique set of plans conceived and approved by you. Make sure your custom home builder understands your specific needs ahead of time.
  • Look for a custom home builder that focuses only on building single-family, custom homes, or that has a demonstrable track record in high-end complete remodels.
  • A custom home builder is usually one that builds 25 or fewer homes a year, and is therefore considered a “small-volume” builder.
  • Make sure the custom home builder you choose has a strong, local reputation and a history of building homes in the Boston area.
  • Contact your local Better Business Bureau, who can alert you to any unresolved complaints with the company.
  • Ask for a list of previous customers and referrals. If the builder is unwilling or unable to provide you with a long list of previous customers, it should raise a red flag.
  • Before hiring a custom home builder, check out his or her work. If possible, look at both completed and in-progress work and keep a close eye out for the quality of materials used and the workmanship.
  • Make sure you establish a good rapport with the home builder. After all, you will be working closely with your custom home builder for months to come.

Home Buying Considerations

Nothing can be as rewarding as buying a home. Whether one is a seasoned buyer or a first time homebuyer, the feeling of excitement cannot be duplicated. To purchase a home is an excellent decision, and is a step ahead in the right direction. Because purchasing a home is the single most important decision and most emotional decision in which one will make in their lifetime, therefore it is wise to think about the kind of lifestyle in which one desires, what type and design of home is preferred, what location is desirable, and a home is a reflection of the homebuyer and their family. It could be a condominium, a Gulf-front home, brand new construction, a fixer-upper, or a traditional home in a large community. When considering purchasing a home, there are a few helpful tips that one should ensue.

Keeping in mind the price range that one can afford is imperative, not swaying from that range. Being realistic and cautious, understanding what one can afford to pay monthly, what expenses the property will entail, if one can cover any emergency expenses as well as what household expenses can be expected monthly is significant. Remembering to have the financial means to cover these expenses is fundamental. Secondly, make a list of wants and needs. Writing down what one must have when looking to buy a home and what one truly needs will help to keep things into perspective. Discussing this list with a real estate professional is a good idea as a real estate agent can search for a home based upon the needs and wants making it possible in finding a home that offers both.

Now think about how many rooms are important, size of rooms, square footage of the home, how much storage space there is, and if there is ample and adequate closet space. Specifying items such as these can really narrow down a list of homes if there are several in which are on the market that are of interest.

Evaluate and examine finances and get approved for a mortgage. Now is not the time to drag one’s feet by shying away from the realities of one’s financial situation. Again, be cautious, realistic, open and honest with your real estate professional as they will work diligently in finding the right home based on the financial information that is disclosed. Additionally, knowing where one stands credit-wise will determine what type mortgage one can qualify for and what homes are available based on that information.

Pay attention to every detail when looking to purchase a home. This includes finding the best and most trustworthy real estate professional that offers the experience, knowledge and is qualified to best represent one in this major purchase. Finding a real estate professional that makes one feel at ease and comfortable is also vital. Real estate agents that are familiar with the best selection of homes can save lots of time and money, and puts the homebuyer at a great advantage in that the real estate agent can negotiate effectively with the seller or the seller’s agent.

Some great tips when looking for a home to purchase are to check out the community in which the home is located in; is it safe, close to schools, close to public transportation, shopping, place of business? Also when choosing a home to purchase, check the inside as well as the outside very carefully and be sure to hire a licensed home inspector who can identify potential problems if any. Some common issues that could arise may be related to the A/C, roof, foundation, etc.

Once the final decision to purchase a home has been made, be sure not to rush the process but at the same time don’t waste any time. Now that the real estate market is on the upswing, it is possible that multiple offers could come in on the home so make the move to purchase quickly and efficiently.

After the contract has been accepted, one can look forward in anticipation to move into the home of their dreams. Following these tips only assures a smooth transaction, and proves that the more prepared one is when purchasing a home the less overwhelming and chaotic the buying process can be.

Qualities to Look For In a Good Realtor

Shopping for a new home is a challenge for many people and one that will often lead to them looking for help in finding the best house. That is when a person should know what they need to look for in the Realtor that they may be working with to see if they are going to have their best interest at heart.

A good thing to look for is going to be the level of organization that the Realtor has. If the Realtor is organized you will see that they are going to be able to help you with the needs that you have quickly. However, you should also take this into consideration so you do not have to worry about them losing any of the information that you have provided them.

Another thing to look at is going to be if they are respectful towards you and others. If they are not respectful towards other people then you may not get a good deal. It’s the role of your Realtor to negotiate on your behalf and interact in a professional manner with the other parties that will be a party to your transaction.  If they are not courteous to other industry professionals then they may be problematic.

Something else that you should look at is whether they are going to be loyal to you as a buyer. Many times you will notice that agents have multiple clients that they work with. However, when you have your time set aside with them you should have them concentrate on your needs rather than answering the phone or addressing other people’s needs when they are showing you homes. In addition, be sure that they are not just showing you their listings or listings of their office.

Technologically savvy real estate agents are a huge benefit to buyers. If they cannot use the computer properly then they could easily miss out on some of the new listings that are coming out. It is imperative that your agent continue to streamline properties to you that meet your specific criteria. This process is called prospecting and any good agent ought to know how to do this for you. Without it, you are likely not getting visibility to the properties you want. So make sure that your Realtor demonstrates that technology is key to ensuring that you have the proper information when you look at any of the homes that are available.

You should also take into consideration if they are going to be a good communicator or not. This is going to be important since they are going to be the ones that need to make clear your demands and negotiate on your behalf for the best price and terms. If they cannot communicate properly, then they could easily miss out on some of the information that you are telling them to include. They should be responsive to emails and calls. If their grammar is poor in an email then what does that say about how they are representing you when you’re not looking?

This is a great time to buy. Rates are low and so are home prices in many areas. However, if you do not have the proper help in finding the deals you will miss out. If you know what to look for in the Realtor you work with, though, it will be easy to find the best agent to help you with your needs.