Gregory Arcaro's Bloggle

10 Questions to Ask the Condo Board

Before you buy, contact the condo board with the following questions. In the process, you'll learn how responsive - and organized - its members are. You'll also be alerted to potential problems with the property.

1. What percentage of units is owner-occupied? What percentage is tenant-occupied? Generally, the higher the percentage of owner-occupied units, the more marketable the units will be at resale.

2. What covenants, bylaws, and restrictions govern the property? What grandfather clauses are in place? You may find, for instance, that those who buy a property after a certain date can't rent out their units, but buyers who bought earlier can. Ask for a copy of the bylaws to determine if you can live within them. And have an attorney review property docs, including the master deed, for you.

3. How much does the association keep in reserve? Plus, find out how that money is being invested.

4. Are association assessments keeping pace with the annual rate of inflation? Smart boards raise assessments a certain percentage each year to build reserves to fund future repairs. To determine if the assessment is reasonable, compare the rate to others in the area.

5. What does and doesn't the assessment cover? Does the assessment include common-area maintenance, recreational facilities, trash collection, and snow removal?

6. What special assessments have been mandated in the past five years? How much was each owner responsible for? Some special assessments are unavoidable. But repeated, expensive assessments could be a red flag about the condition of the building or the board's fiscal policy.

7. How much turnover occurs in the building? This will tell you if residents are generally happy with the building. According to research by the NATIONAL ASSOCIATION OF REALTORS®, owners of condos in two-to-four unit buildings stay for a median of five years, and owners of condos in a building with five or more units stay for a median of four years.

8. Is the condo building in litigation? This is never a good sign. If the builders or home owners are involved in a lawsuit, reserves can be depleted quickly.

9. Is the developer reputable? Find out what other projects the developer has built and visit one if you can. Ask residents about their perceptions. Request an engineer's report for developments that have been reconverted from other uses to determine what shape the building is in. If the roof, windows, and bricks aren't in good repair, they become your problem once you buy.

10. Are multiple associations involved in the property? In very large developments, umbrella associations, as well as the smaller association into which you're buying, may require separate assessments.

Dallas Chambers

RE/MAX Agents Realty

Office:  770-922-7777 X316

Cell:     770-595-1541

Web: www.dallaschambers.com 

E-Mail:  dallasc@remax.net

Each Office Independently Owned and Operated.  All information deemed reliable but not guaranteed.

One comment we often hear as real estate professionals is "I'm selling my home myself to save the commission." That is fine so long as you don't think that your potential buyers don't know that.

In fact, did you know that there are only 4 kinds of buyers out there? That's right, 4. And they are either working with a Realtor or they, too, will want to save the commission. If you have a "For Sale By Owner" sign in your yard, everyone knows that you are not paying a commission to a professional.

1. First time home buyers: They are the most likely to seek the help of a professional because they do not know all the ins and outs of the home buying process. Even if they come across your home and like it, they will want their agent involved. Being open to working with a buyer's agent and paying at least some commission might help you get your home sold.

2. Relocating buyer: They, too, usually work with a real estate agent because they are not in town, yet. Again, if you are willing to pay a buyer's agent commission, you may be able to work with one of these buyers and sell your home, that is, if you are available to show it when this buyer is in town house shopping. If not, they might just buy your neighbor's house because it's listed and on a lockbox and they were actually able to view it.

3. Moving up (or moving down) buyers: They tend to feel more confident about the process because they have been there before. However, if they choose to work on their own, they'll negotiate you down on your price to save some of the commission themselves. Since 2 out of 3 FSBO that go under contract do not close when no Realtor is involved, it might not matter if you split the would-have-been commission with this buyer. The question is: can you get them to the closing table?

4. Investors: Probably the most savvy buyer out there and you can bet that they will not pay you a commission to work the sale of your home for you. Unless you are an investor yourself and you've sold many homes in the past, this buyer knows more about the process than you do and he/she knows that they will have to do all the work. And, unless you are an awesome negotiator, you will not save money if your buyer is an investor. Not a penny.

There you have it! These are the only 4 kinds of buyers out there, no more, no less.

Here's another way to look at it: appraisers do not care about the commission. Your house is worth what it is worth, whether or not there is a commission involved. For example, if you live in a neighborhood where homes of similar age and sizes sell for 150K, then your home is worth 150K.

With a 6% listing commission, you would have to pay 9K in commission, usually split between the listing and the selling brokers (if two agents are involved). If you sell on your own, you are not going to save the full 9K. Buyers will want to split those savings with you and might only offer you 145K for your home. If this is acceptable to you, all is good, but your savings are now down to 4K. If you calculate 2 or 3 months extra on the market (and 2-3 months of extra house payments), the advertising and signs costs, and the time involved in showing your home numerous times to buyers who may or may not qualify to buy it, is it really worth the aggravation? Besides, getting an offer/contract on your home is the easy part. Do you know what to do if you ever get that far?

I know what my time is worth, do you?

8 Tips to Guide for Your Home Search

1. Research before you look. Decide what features you most want to have in a home, what neighborhoods you prefer, and how much you'd be willing to spend each month for housing.

2. Be realistic. It's OK to be picky, but don't be unrealistic with your expectations. There's no such thing as a perfect home. Use your list of priorities as a guide to evaluate each property.

3. Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender and get prequalified for a mortgage. This will save you the heartache later of falling in love with a house you can't afford.

4. Don't ask too many people for opinions. It will drive you crazy. Select one or two people to turn to if you feel you need a second opinion, but be ready to make the final decision on your own.

5. Decide your moving timeline. When is your lease up? Are you allowed to sublet? How tight is the rental market in your area? All of these factors will help you determine when you should move.

6. Think long term. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in this home for a longer period? This decision may dictate what type of home you'll buy as well as the type of mortgage terms that will best suit you.

7. Insist on a home inspection. If possible, get a warranty from the seller to cover defects for one year.

8. Get help from a REALTOR®. Hire a real estate professional who specializes in buyer representation. Unlike a listing agent, whose first duty is to the seller, a buyer's representative is working only for you. Buyer's reps are usually paid out of the seller's commission payment.

 

Dallas Chambers

RE/MAX Agents Realty

Office:  770-922-7777 X316

Cell:     770-595-1541

Web:  http://dallaschambers.agentsrealty.com

E-Mail:  dallasc@remax.net

Each Office Independently Owned and Operated.  All information deemed reliable but not guaranteed.

With many homeowners unwilling to accept the prices being offered by today’s buyers, some have taken the remodeling approach. If the reason you wish to move is to have a new kitchen or bath, or to have additional space, remodeling may be just the answer.

 

Today is a great time to remodel, and the changes just might make you fall in love with your home all over again. Materials and labor are at extremely competitive prices, and the government may even help foot the bill by providing tax credits for energy saving upgrades.

 

However, those who are seriously considering a remodel or addition should ask themselves the following:

 

● How long do I expect to remain in the home? Most remodeling projects fail to recoup their cost when the home is sold. Staying in the home several years allows you to spread the cost over a longer period.

● Will the features or changes I desire appeal to a wide range of future buyers? Don’t make your home so “unique” that it will be difficult to sell.

● Will the changes I make cause my home to be significantly more expensive than other homes in the neighborhood? Unless you plan to remain in the home forever—a rare occurrence—avoid changes that will make it far more expensive than others in your neighborhood. Not only will it be difficult to sell in the future, but you’ll probably lose much of the money spent remodeling.

● If financed, will the additional expense be a burden to my budget? Don’t stress yourself or your budget by doing work you cannot easily afford.

● Can I afford the job if it exceeds my budget by 20%? The work may create unexpected expenses, and you may decide to make changes during the process. Few remodeling jobs are completed within the original estimate.

● Can I tolerate the disruption to my life? The job will create lots of dust, noise, and you may have occasional disruptions of water or electricity. You’ll also have strangers in your home who may arrive early in the morning.

● Can I accomplish the same thing by just de-cluttering or re-purposing a room? Getting rid of unnecessary junk/furniture may help to create the space you need; or you may find that an unused living room or spare bedroom can be re-purposed to serve your needs.

● Can I afford the subsidiary costs of remodeling? Be sure to budget for any new furniture the remodel may require; and be aware that your insurance, property taxes, and utilities may increase due to your changes.

 

If, after answering the above you still believe remodeling to be the best approach, here are a few tips.

 

● Before interviewing contractors, make a list of everything you might want. Try to be as specific as possible when listing the changes or additions you wish.

● When hiring a contractor, interview at least 3, and get references of recent jobs completed, as well as banking and supplier references. Professionals should be able to provide several references of their recent work; those who can’t should be avoided. And in today’s tough economic environment you’ll need to make certain that your contractor has the financial stability to complete the job. Pick a contractor who is likeable. You may be working with them several weeks or months. Go with your “gut.”

● Check the references—all of them. If you can visit a recently completed job, that’s even better.

● Professional contractors will supply a written contract, including the scope of the work, building plans if necessary, and specifications for materials, appliances, and fixtures. They should also provide copies of state and local licenses, and certificates of workman’s comp and general liability.

● Don’t base your selection of contractor solely upon price. The most expensive isn’t necessarily the best, and the lowest price may not ultimately be the least expensive.

● Never pay for a job up front. The risk of losing some or all of your money is too great. The recession has brought out lots of “scammers.” Don’t be taken in by slick sales talk. While large jobs may require periodic payments as work is completed, don’t allow the payments to exceed the work in place. Ask for a payment schedule up front and make sure you understand it fully.

● Ask the contractor to provide Lien Waivers as requests for payment are submitted. Some states allow unpaid workers or suppliers to place liens on homes to collect for unpaid labor or material, causing unsuspecting homeowners to pay for work twice.

 

Finally, be as flexible as possible. On occasion you may have to compromise and disruptions may sometimes be frustrating. If you can tolerate the disappointments when things don’t go as planned, and if you don’t allow yourself to become stressed over the minor annoyances, your remodel just may leave you with the home of your dreams.

 

The Housing Guru: The one source for all your housing questions

I received an email yesterday from someone I showed some houses to this past summer. I didn't remember him at first, but he had some questions about a property. I reached out to the listing agent for answers, and before she responded, I got another email from the guy today. " I didn't hear from you yet," he said. "Maybe I should call <another agent>." I remembered the guy now. He ran my wife and I around in circles getting forensic information about homes he found online for a week, then disappeared after looking at 2 homes with me. He had resurfaced, wanted me to do more research, and was already threatening to sack me.

So I sacked him.

Here's the point: real estate professionals aren't waiters. We don't do free research for just anyone who rings or emails us, and like any normal person, we are a bit sketchy about people that make us jump through hoops and then then disappear. That time we put in with those people could have been better spent with more sincere clients or our family.

On the other side of the coin, consumers are suspicious about agents. Too many people have a bad agent story to tell, so they often fend for themselves before investing time and hopes into another agent who will disappoint. It's like a big game of chicken. Niether side wants to devote time or commit to someone who might let them down. Here's what I say: If you, the consumer, want heat from that stove, how about throwing in a little wood.

Here are a few things home buyers can do to ensure that they get the most from an agent.

1. Get pre-approved. I shouldn't have to explain this. The housing industry has been bent like a pipe cleaner the past 18 months. A pre approval older than 90 days is worthless, and no pre-approval disqualifies you from being taken seriously by a seller. . It takes 10 minutes to speak with a lender and get a free updated pre-approval that shows you are ready, willing and able buyers.
2. Practice monogamy. Often in New York, some buyers think that they can get a batter deal if they work with more than 1 agent or deal directly with listing agents. Both of these notions are not only false, they can be expensive mistakes. If your agent catches on to the fact that you are playing the field, he'll start hedging his bets also, because nobody wants to devote time to a buyer file that might not close because you are looking in another town with another broker. 
3. Figure out what you want. Some agents get understandably frustrated when they spend a Sunday morning looking at town homes and Tuesday evening walking through Victorian colonials with the same buyer. I can almost intuit what some buyers want after spending time with them. However, if you are too whimsical, I might get the sense that we're just unlocking doors so you can satisfy curiosity. 
4. Return our calls. Sound familiar? Do you like it when you can't reach an agent for 3 days? It is the same here. Buyers who drop out and resurface without explanation are deemed unreliable and risky. It is only fair; stay in touch.  
5. Take our advice. The reason I give people 3 lawyers, 3 home inspectors, and 3 mortgage firms is not because I get a kickback, it is because I know that your union attorney won't return calls, an Internet bank can screw you, and your uncle Mel is not a licensed home inspector. I cannot compensate for their deficiencies. I am more effective with a cooperative team.  
6. Sign a buyer representation agreement. This tells the agent "you are hired. We won't use anyone else." You risk nothing by doing this, because if someone is hired, they can be fired if they stink. Establish performance criteria, have a 3 strikes and out rule or reasonable exit clause, and the agent is now at your service. 

Doing these things will make you hold your agent to a higher standard, and ensure that you get the most from them. Never forget that agents are human, just like you. An agent assured that they have a qualified, sincere, eager client can work confidently for that client. If they take you for granted, that can be grounds for firing them. With that leverage, everybody wins. 

 

 

• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• Read my short sale blog here. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
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• I'm hiring agents. 
• Agents: Subscribe to the 40 Somethings Group. Reach Phil at (914) 723-8900.

All content/images, unless noted, are the property of J. Philip Faranda & may not be used without permission

It's fairly ubiquitous today to hire a licensed home inspector when purchasing a home.  This is a good thing. For most folks a home purchase represents the largest amount of money to be spent in their lifetime. The home inspection contingency is typically one of the "big three" contingencies in an offer to purchase.  

While specific language and format will vary, the basis of a home purchase agreement has, in essence, three components from the buyer's point of view.

 

We will purchase your home if...

1. You agree to our price
2. We can acquire appropriate financing
3. Upon inspection(s) the home has no defects which we deem unacceptable

If any of those contingencies are not met, the buyer has an out and will likely be able to recoup any money paid into an escrow or trust as a deposit.

I guess this is where I should put my disclaimers. 

I am neither an attorney nor a home inspector - this post is to be construed neither as legal advice nor specific recommendations on any construction, structural, etc issues regarding a home you wish to purchase.  Any similarities to actual persons living or dead is purely coincidental. One offer per household and finally - employees of Rick Schwartz Homes, any affiliates, wholly or partially owned subsidiaries or related companies are not eligible.

The question I'm posing, as a Realtor is this: Should it be assumed, by the buyer, that the seller should bear the cost of repairing any and all defects uncovered during a home inspection?

My purpose in this discussion is to raise the issue for thought as to why we do home inspections and should the buyer plan to use this moment to renegotiate the purchase price of the home.

We do home inspections in order to uncover defects in the home that might not be noticed during the shopping process.  Things that might not be visible during a routine walk-through. Most defects are fixable.  There is obviously, a cost involved in any remedy.  The key point, in my opinion is one of expectations.  The purpose of the inspection is to uncover things that were not likely to be apparent when you are in "shopping" mode.  Examples:

• If you see water dripping into a large puddle in the center of the basement directly under the kitchen, you should not be surprised when a home inspector reports a plumbing issue.
• If you see scores of rodent traps on the floor in several rooms, you should not be surprise if the inspector hints that there might mice present.
• If there is black tape across the front of several electrical outlets, you should not be surprised if the inspector recommends that an electrician check the place out.
• If the front view of the house looks more like the one on the left in the image below, rather then the one on the right, you shouldn't be surprised at anything the inspector finds.  

Serious point here is that your own walkthrough which happens long before you negotiate price should give you a general idea of the condition of the house. If you have a feeling that there are issues yet to be discovered, say so early on. Have your Realtor let the listing Realtor know that you are making a lower offer because you saw, this or that or the other.  Take the condition of the house into account before you decide what you want to pay.

Your home inspection is, without a doubt, going to reveal some items that need to be corrected. If they are minor, put them on your list of things to work on when you move in.  If they are major safety, health or structural issues, then either ask the seller to pay for repairs, split it with them or use your contingency to pull out. 

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