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Saturday, July 18, 2009


Having found the perfect Buyer’s agent to help you find the perfect home, most buyers believe that their biggest hurdle will be finding that property that includes all of the top requirements on their list. The same can be said for the seller, once a worthy Seller’s agent has been employed to market their home. Both believe they have achieved their goals when the two worlds meet. As exhilarating and exciting as this event can be, it is just the beginning of a process that has many twists and turns. You will need a skilled agent to advise you through each step of the process. Step One - The Art of The Deal – Finding the right house, in the right location, with all the right “extras” in the right price range is truly a relief and joy for the buyer. Equally pleased will be the seller who has now attracted a buyer who appreciates the value of their home, for the seller’s asking price and who is “ready, willing and able” to make the purchase. The new hurdle becomes finding a middle ground regarding price.

Both seller and buyer need to depend upon their agents to provide them with comparable sales in the past 3-6 months. While it is important to know what other homes are currently on the market and at what price, the reality is that unless they have sold it is not relevant. Something is only worth what another person is willing to pay for it.

Beyond these numbers, the factors that will affect the choices the Buyer & Seller make may dependent upon personal finances (“I must sell so I will take less” or “I don’t have to sell so I will wait for my price”.) or emotional connections (“I know this house is more than I wanted to spend, but it feels like home!”)

In determining an opening offer, buyers will often want to know two things about the property. 1) How long has it been on the market? , and 2) What was the original price? People often conclude that if a home has been on the market a long time, the seller is desperate. It is also assumed that lowering the price indicates desperation on the part of the seller. While the answer both of these questions can be yes, at times, it is a mistake to assume that to be the case. Unrealistic pricing or poor marketing are just two reasons that a property could have “missed the boat” when it first was introduced to the market.

So you make your initial offer accompanied by a check or money order called “earnest money”. Earnest money, not to be confused with a “down payment” is the money provided to secure the agreement to show “good faith”. If the seller does not accept your initial offer, they will make changes to your agreement and present the signed agreement back to your agent with the changes initialed. This is called a “counter offer”. This process continues until parties agree on price and terms and there is a “meeting of the minds.”
Step Two – The Waiting Game – In New Jersey, when you sign an Agreement of Sale, the agreement is not legally binding until the end of a three day period (business days) following the last date of signing and the agreement has been delivered to both parties. The purpose of this review period is to give both parties the opportunity to review this agreement with their attorney and to make any additional changes if needed. This means that during this three day period, the Seller is still allowed to show the property and if another offer is received that the Seller prefers, the Seller can cancel the agreement already signed. The Buyer has the same option. If during this three day period, the Buyer contracts a case of “Buyer’s remorse”, the Buyer can cancel the agreement. Cancellation for either party must be su
bmitted in writing through an attorney’s letter. Step Three – Looking Under The Hood – Unless the property is sold “AS IS”, most agreements provide a home inspection paragraph. It provides the Buyer to arrange a home inspection, with a QUALIFIED home inspector within a given time period after the attorney review period. Generally, the Seller will be expected to deliver a home with a working heating and air conditioning systems, roof and flashings free of leaks, no structural issues with the foundation and no problems with the plumbing or the electrical systems.

The Buyer’s agent should be able to provide you with a list of local reliable Home Inspection companies that past clients have used.
Try to attend the home inspection. It only takes 2-3 hours. You will learn everything you ever will want to know about your home and more; so much more than you will get from the 30 page or more booklet that summarizes the visit. The home inspector will walk you through each nook and cranny pointing out things to look out for in the future.
You will receive a report within 24-48 hours from the home inspector detailing the inspection. Make sure you authorize your agent to receive a copy of this report so that your agent can go over this report with you. Together, you and your agent will determine what problems revealed as a result of the inspection that you will be requesting either to repair or as a credit. In some agreements, Buyers write a clause that gives them the option to cancel the agreement if they want to buy the property based upon the results of the home inspection. Typically the Buyer will have 5 days after the date of the home inspection to present a list of requests to the Seller.
At times this finally negotiation can sometimes be more difficult than the original price negotiation. Sellers feel that have already “discounted” their price sufficiently and are adamant to remain at the price that was agreed. On the other hand Buyers can feel deceived that the property they were sold is not the quality that they thought. At the end of the day, it will require skilled agents to keep both sides calm and their eye on the end goal. Some deals fall apart at this stage. However, most are able to work it out with a little give and take since both have the same goal.
Step Four – Seal of Approvals – Every seller must get a number of certifications in or
der to sell their property. Many agents will handle the paper work and appointments required with regard to the city and the all important Certificate of Occupancy. What you need to know is that you can NOT sell property without it and it requires a city official to be scheduled to come out to check to make sure that you are in compliance. If you are not, the errors will be cited and you will need to make the correction and reschedule the official for a re-inspection. In some counties you can wait up to 2 weeks for an official to fit you in. It is true, you can’t fight city hall so work with your agent to get your home in compliance early so it only has to be done once.
Every home must receive a “clean termite certificate”. Most agreements allow the Buyer to choose the termite inspector. If you have termites or any other wood boring insect, you must get it treated and if there is any structural wood damaged you will have to have it repaired. Without this treatment and remediation you can not get a “clean cert” and without it you can not sell your home. This one is a no brainer.
Step Five – The Finish Line – You are almost at the end of the road and you want to make sure things are going to run smoothly.

Here are the last few tips for both buyers and sellers for the last days before you close:

1 . Contact the utility companies to make sure start and stop dates are correct - Buyer & Seller
2. Don’t remove nails from walls when you take down pictures. Leave them or you will have to repair the walls - Seller
3. Bring a lamp to you walk through to check outlets - Buyer
4. Hire a cleaning service to give the place a “once over” after you have moved out –Seller
5. Make sure you obtain copies of all documentation, especially related to underground oil tank removal if applicable. - Buyer
6. Put a bucket, paper towels, window cleaner and cleaning solution in your car, just in case – Buyer
7. Bring all your keys, manuals and garage door openers for the buyers – Seller

8. Jot down questions ahead of time you might have about alarm codes, light switches etc to ask the sellers when you see them - Buyer
Clearly, the process of buying or selling a house does not end when the match is made. Hopefully this five step guide will prepare you in the future for your next purchase or sale.

1 comment:

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