The process of buying or selling a house seems to involve a million details.  It is important that you educate yourself on as many parts of this process as you can—this knowledge could mean the difference of thousands of dollars in the long-run.  The legal issues involved in the process are often particularly intricate, ranging from matters of common knowledge to subtle details that might escape the untrained eye.  Any of these issues, if not handled properly, could develop into larger problems 

With so many  legal issues to consider, your first step should be to seek out experienced professionals to help educate you and represent your best legal interests.  Begin with an experienced real estate agent, who can help guide you through the initial hoops.  S/he should also be able to point you in the direction of a reputable local real estate lawyer to assist you in all legal matters involved in the purchase or sale of your house.

While there are countless legal details involved in a real estate transaction, some seem to pose larger problems than others.  We’ve outlined two legal clauses that are commonly misunderstood and may cost you money if not worded correctly.  Handle these carefully and you will be on track to a successful sale or purchase!

1. Home Inspection Clause

Some real estate transactions have been sabotaged due to the wording of the home inspection clause.  This clause originally allowed that the buyer has the right to withdraw their offer if the home inspection yielded any undesirable results.  However, this allowance was known to backfire, as Buyers took advantage of it, using some non-issue stated in the inspection as an excuse for having changed their minds.  Of course, this was unfair to the Sellers, as they’d poured time and money into what they believed was a sure deal.  Not only might they have missed out on other offers in the interim, but their house might also now be unfairly considered a “problem home.”  Additionally, they’d now have to shoulder the costs of continuing to market the property.  All of this adds up. 

In order to remedy this potential problem, the clause should indicate that the seller has the option of repairing any problems the home inspection might point to.  With this slight change in the clause, both buyer and seller are protected.

To ensure this clause is fair from one side of the bargain to the other, work closely with a lawyer experienced in these transactions and all the nuances that may affect the outcome for you.

2. Survey Clause

It is the right of a home buyer to add a survey clause to the real estate contract on the home they’d like to purchase.  If you are on the selling end of the contract, be aware.  If you have added an addition or a pool to your property since the last survey was produced, your survey will no longer be considered up-to-date and the Buyer may request that a new one be drawn up—the cost of which you will incur.  The price of this process will run anywhere from $700 to $1000. 

It’s official:  you’ve signed the papers, dotted all the i’s and crossed the t’s—you own a new home!  You’ve almost reached the end of your journey.  However, now, faced with the daunting task of moving, it may seem as though the journey has just begun.  Moving can be a time-consuming and stressful experience if you let yourself be overwhelmed by the job.  Remember, though, having a successful move means taking care of the details, one by one.  If you break the process down into steps and arrange your time accordingly, you can make it manageable.  Use the following checklist to ensure you’re covering all the bases, and you will be well on your way to a successful move!

Household

·                     Arrange to have your mail forwarded to your new address.

·                     Forward or cease all deliveries to your home, and forward or cancel newspaper and magazine subscriptions.

·                     Disconnect or take care of utility, cable and phone services and accounts.

·                     Arrange for utilities to be connected at your new house.

·                     Cancel pre-authorized bill payments.

·                     Begin going through closets and discarding any unnecessary items.

Packing

·                     Plan your packing.  Start by purchasing or acquiring suitable containers.  Most moving companies have specialized containers you can buy.  Also, speak with others who have recently moved—they may be looking to get rid of boxes.  You’ll need the following:  small boxes for heavy items (books, tools, etc.); large boxes for bulky items (bedding, stuffed toys, etc.); medium boxes for bulky but less heavy items (towels, small appliances, etc.).

·                     Begin to collect other packing materials.  Decide which items you’ll need from the following checklist:

-White paper

-Tissue paper

-Paper towels

-Newspapers

-Non-printed paper

-Packing tape or twine to seal boxes and containers

-Scissors

-Labels and stickers (available from your moving company)

-Felt marker to label boxes

-Notebook and pen for listing contents

·                     Set goals and deadlines for yourself.  Aim, for example, to pack one room per week. 

·                     Attach a list of contents to each box.  Separate and label boxes to be placed in storage.

·                     Consider holding a garage sale to rid yourself of excess belongings.

·                     Begin to use up the food in your pantry and freezer.  Let the food you already have dictate your menus.

·                     Have rugs cleaned that are to be moved, then roll and wrap them.

·                     Make special arrangements for the moving of plants or pets.

·                     Collect all personal items from local services (dry cleaning, storage, photos).

·                     Service all appliances you are taking with you.  Note that all gas appliances must be emptied, as it is illegal for movers to carry flammable substances.

·                     Take inventory of all the boxes, and contents of the boxes, you have packed.

·                     Have your car serviced and tuned up.

Community

·                     Return library books.

·                     Clean out your locker at any club you are leaving.

·                     Determine how to transfer your children to a new school.

·                     Return items you’ve borrowed to friends, and collect any you’ve lent.

·                     Mail or e-mail change of address notices to family members, friends, and office contacts.

Records

·                     If needed, transfer medical and dental records, and fill prescriptions.

·                     Change the address on your driver’s license.

·                     Change the billing address for credit cards.

·                     Change the address for banking statements.

·                     Leave a record of security codes for new tenants.

Insurance and Legal Matters

·                     Visit your lawyer and ensure all documents are signed.

·                     Notify your insurance company well in advance of the move and ask them to review your policy. 

·                     Transfer insurance to your new home, or acquire new insurance.

·                     Review your moving company’s insurance policy.  If it doesn’t cover as much as you’d like it to, obtain your own.

·                     If you are currently renting a house or apartment, give written notice to the landlord.

·                     Have all keys to your old home delivered to your lawyer or realtor.

Stop Paying Your Landlord!:  Own Your Own Home

The thousands of dollars in rent you’ve already paid to your landlord may be a staggering figure—one you don’t even want to think about.  Buying a house just isn’t possible for you right now.  And it isn’t in your financial cards for the foreseeable future.  Or is it?  The situation is common and widespread:  countless people feel trapped in home rental, pouring thousands of dollars into a place that will never be their own—yet they think they’re unable to produce a down payment for a home in order to escape this rental cycle.  However, putting the buying process into motion isn’t nearly as impossible as it may seem.  No matter how dire you believe your financial situation to be, there are several little-known facts that may be key to helping you step from a renter’s rut to home-owning paradise!

Initially, of course, the most daunting factor involved in buying a house is the down payment.  You know you’ll be able to handle the monthly payments—you’ve done this for years as a renter.  The hurdle, instead, seems to be accumulating the capital needed to put money down.  However, this hurdle may be smaller than you think.  Take a look at the following points and explore whether any of these scenarios may be possible for you:

1. Find a lender to assist you with your down payment and closing costs.

If you’re free of debt, and own an asset outright, your lending institution may lend you the money for a down payment by securing it against your asset.  In this case, you won’t need to have accumulated capital for a down payment.

2. Buy a home even if your credit isn’t top-notch.

If you have saved more than the minimum for a down payment, or can secure the loan against other equity, many lending institutions will still consider you for a mortgage, despite a poor credit rating.

3. Find a seller to assist you in buying and financing the home.

Some sellers may be willing to bear a second mortgage as a seller take-back.  The seller then assumes the role of the lending institution, and you pay him/her the monthly payments, rather than paying the price of the home in a lump sum.  This is an additional option if you have a poor credit rating. 

4. Buy a home with much less down than you’d think.

Investigate local and federal programs, such as first-time buyer programs, that are designed to help people like you break into the housing market.  An experienced real estate agent will be equipped to give you all the information you need about these programs, and counsel you on which options are best for you.

5. Create a cash down payment without going into debt.

By borrowing money for specific investments, you may be able to produce a large income tax return that you can use as a down payment.  Technically, the money borrowed for these investments is considered a loan, but the monthly payments can be low, and the money you put into both the home and the investments will ultimately be yours.

So, you know there are options out there.  The next step is to educate yourself on what your own personal possibilities might be, and how to follow through with the means to achieve these goals.  Keep in mind, too, that you can get pre-approved for a mortgage before you begin searching for a home.  In fact, you should get pre-approved—the process is free and doesn’t place you under any obligation.  You can be pre-approved over the phone.  Or, take the next step and complete a credit application.  Once a credit application is submitted, you’ll receive a written pre-approval, which will guarantee you a mortgage to a specified level.  When you have a concrete price range, you’ll know where to begin looking.  Make a commitment to yourself to break out of the renting rut.  Start today!

After putting in a huge amount of time and effort to get your home looking good and ready to sell, your hard work is finally going to pay off:  your home is on the market—you’re ready to begin showing.  Your house should always be at-the-ready for a tour, as agents may bring clients by with very little notice.  If they catch you unprepared and you aren’t able to show the house on the spot, you could be losing out on a sale.  Concentrate on the following areas to ensure your home is ready to show:

1. People

Homebuyers may feel like intruders if you are present while they view your house, and this will affect their overall impression.  Consider taking the opportunity to visit the local coffee shop, go shopping, or take the kids to the park.  If you can’t leave while the house is being shown, try to be as unassuming as possible.  Do not move from room to room.  Don’t offer information, but make yourself available to answer any questions the agent or buyers might have.

2. Lighting

When you know an agent is bringing someone by, make sure all of the drapes and window shades are open to let in as much daylight as possible, or—if the showing is taking place at night—to create a look of comfort and warmth when viewed from the outside.  Open all the doors between rooms to create an open, inviting feel.  Turn on all lamps and overhead lights, even during the day.  Keeping lights on during the day softens the harsh shadows sunlight can create in a room, and illuminates dim corners.  During nighttime showings, make sure all outdoor lights are on, as well as pool lights.

3. Cleanliness

Scan the floor for debris—newspapers and magazines tend to accumulate without our noticing.  Make sure all the counters are clutter-free.  Empty the kitchen garbage before every showing, particularly if the garbage can doesn’t have a lid.  Keep everything freshly dusted and vacuumed.  Beds should be made and bathrooms cleaned (toilet lid down).  Every room should sparkle.

4. Scents and Sounds

Avoid using scented sprays before showing your home.  Some people simply won’t enjoy the smell, and others may be allergic.  If you want to make a room smell pleasant, consider a potpourri pot or a naturally-sourced aroma. 

If you or your family is home while the agent is giving a tour, try to stay as quiet as possible.  Turn off the television and the blaring radio.  Put on some soothing background music at a low volume.

5. Pets

Don’t get discouraged if your property hasn’t sold during its first appearance on the market.  Your home may actually have been one of the most appealing listings of its kind—and the reasons it didn’t sell may have nothing to do with the property itself or the market.  Rather, a number of separate factors may have influenced the outcome.  Take a step back, break your original selling method into parts, and allow yourself time to evaluate each one.  Make a commitment.  Establish a new approach.  Stick to it.  A reassessment of your system, and a shift in perspective, may be just what you need to realize your ultimate goals in the sale of your home. 

If your listing has expired, you will usually find weakness in one of the following areas:

1.      Appearance and Condition of your Property

When preparing your home to show to buyers, always remember:  the decision to buy a home is one coloured primarily by emotion, not logic.  Every buyer has different ideas of what “Dream Home” means to them.  Of course, your home won’t appeal to every buyer’s palate.  But, how prepared are you?  Is your home inspiration-worthy?  Have you prepared each room with the goal that it leave a lasting impression?  Have you cultivated ambiance?  For example, when a buyer stands in your kitchen, will she warm to the thought of drinking coffee at the table every morning?  Does the décor in the master bedroom inspire feelings of comfort and relaxation?  You should make every effort to make you home appear inviting and appealing.  This means covering all the bases: 

·                     Take care of any general repairs needed.

·                     Tidy away the clutter; every room should appear well-ordered and neat

·                     Maintain a strict level of cleanliness while showing.  Everything should be clean, from shelves to carpets to furniture.  While you may no longer notice that wine stain on the rug, it could be the first thing a potential buyer sees when she walks into the room.

·                     Increase the brightness and warmth in your home:  open curtains, turn on the lights, put out flowers, play soothing background music.

·                     Don’t forget the exterior of the house.  Concentrate on the “curb appeal” of your home.  What impression will a buyer get when s/he first pulls into the driveway?  Keep the lawn well-groomed and the rest of the property tidy.

·                     Assess any major decorating or renovation projects that your property could be in need of.  If your home could use a new paint-job, for example, consider taking care of this yourself, rather than offering a repair allowance to prospective buyers.  Don’t leave such changes to their imagination—if they are looking at run-down walls, chances are they will incorporate this flawed experience of your house into the price they’ll be willing to pay.  Ultimately, you’re better off checking these projects off the list before showing your home.

A house that is showcased well and offers a lasting impression will sell for the best price, going a step beyond the competition.  Be sure to see if your agent will put together a no-obligation examination of your home to assist you in looking at the factors we’ve mentioned.

2.      Pricing

The market value of your home is based on the price a willing prospect will pay, as well as the price a willing seller will accept.  Pricing your home too high can be as financially dangerous as pricing it too low.  Keep in mind, your listing does not include the price you paid originally for your home.  Often, sellers include this original price—or the amount of money they’ve invested in their home so far—into their selling price equation.  This mistake may prove to be a costly one.  Pricing your home too high can result in prospective buyers rejecting your home for larger homes listed at the same price.  Ask yourself:  did your price work for you or against you?  The “right” price balances upon a combination of:  competition within the market, the condition of the market, and the state of your home.

Request an up-to-date market analysis from your agent to help give you an idea of what an appropriate asking price for your home might be.  This market analysis should give you an idea of the competition involved in the current market, offering an assessment of homes similar to your own that have recently sold or are currently on the market.  It should also show you how long other homes have been listed, in order to give you an idea of the average amount of time you can expect a home to stay on the market.  And it should indicate the homes with expired listings, to help you glean some understanding of the reasons why this might occur.

3.      Marketing and Communication

Your marketing plan begins with choosing the right realtor for your home-selling needs.  The realtor you choose should be committed to selling your property, ensuring your home is marketed and showcased in the most effective way possible.  So, when interviewing agents, it’s a good idea to ask them to give you a rundown of the marketing strategy they would use to sell your home.  Investigate and compare how much money each realtor spends on advertising a property and the types of media s/he employs.  How effective is each brand of advertising? 

Your real estate agent should recognize the most effective marketing strategy for the unique offerings of your home.  S/he should also articulate to you the most direct marketing route to the largest pool of potential buyers.  Be wary of agents who rely on outdated advertising strategies.  The most successful agents on the market today are those who employ current, innovative marketing techniques.  These are the agents you can rely on to have the skills and tools required to sell your home fast and for top dollar.

4.      Operating as a Team

Whether seeking solace, activity, schools, churches, or green space, every homebuyer looks for a different combination of attributes in a new community.  Choosing a neighbourhood that suits your needs and wants is one of the most important decisions you’ll make in the home-buying process; your choice of environment will affect the way you experience your new home.  This is a very personal decision, influenced by countless unique factors colouring your own lives, but you should always keep the following in mind:

1. If you’re considering buying a home in a community that is unfamiliar to you, get to know its lay-out, offerings, and ambiance.  Take some time to walk or drive through the neighbourhood, both during the day and at night, familiarizing yourself with the sights, sounds, and smells.

2. What amenities does the neighbourhood have to offer?  Is public transportation readily accessible?  Are there schools, churches, parks, or grocery stores within reach?  Consider visiting schools in the area if you have children.

3. What is the nature of the job market in the area?  Keep in mind that if area employers are producing more jobs, you can expect property values to increase, especially if the jobs offered fall within a higher salary bracket.

4. Speak with the neighbours.  Ask questions.  They can offer you a wealth of information, from an inside perspective.

5. How will you be affected by a new commute to work?  Drive the route between the new neighbourhood and your office during the appropriate times to gauge the volume of traffic you could expect to encounter, and the amount of time you’d need to put aside for daily travel.

6. Contact local land-use and zoning officials to determine existing development plans or potential for development in the area.  A strong agenda for neighbourhood planning and local zoning will increase the value and draw of a neighbourhood.  Keep in mind that any large, tree-covered area may be a target for future development in popular communities.

7. Determine whether financial resources have been put in place to support infrastructure projects in the area.  These construction projects might include building, replacing, or improving anything from schools to roads, and are usually part of a city or town’s long-term plan.  While disruptive, construction could also be a benefit to your experience of a community, influencing the long-term value of the area. 
   

The asking prices of most homes on the market indicate the current state of the market, and usually mirror the prices for which other similar homes in the area have recently sold.  In deciding upon a selling price, a home-seller must establish a balance between the desire to draw the highest offer and finding a price that will be reasonable enough to attract an appropriate pool of prospects, and competitive offers.  While most selling agents counsel their clients to consider this equation when pricing their home, keep in mind that some homes are not properly priced. 

It’s important to educate yourself about the current market before approaching the purchase of a home.  The market will always influence a property’s value, regardless of the state of a home, or its desirability.  Here are the types of market conditions and how they may affect you:

1. Seller’s Market:

A seller’s market is considered a “hot” market.  This type of market is created when demand is greater than supply—that is, when the number of buyers exceeds the number of homes on the market.  As a result, these homes usually sell very quickly, and there are often multiple offers.  As a buyer, you need to consider that many homes will sell above the asking price; in other words, you may have less room to negotiate, and may encounter competing offers.  Though most buyers want to get a home for the lowest price possible, reducing your offer could mean opening the door for another buyer instead.

2. Buyer’s Market:

A buyer’s market is a slower market.  This type of market occurs when supply is greater than demand, the number of homes exceeding the number of buyers.  Properties are more likely to stay on the market for a longer period of time.  Fewer offers will come in, and with less frequency.  Prices may even decline during this period.  As a buyer, you will have more selection and flexibility in terms of negotiating toward a lower price.  Even if your initial offered price is too low, the seller will be more likely to come back with a counter-offer, so you can begin the process of negotiation. 

3. Balanced Market:

In a balanced market, supply equals demand, the number of homes on the market roughly equal to the number of buyers.  When a market is balanced there aren’t any concrete rules guiding whether you should make an offer at the higher end of your range, or the lower end.  Prices will be stable, and homes will sell within a reasonable period of time.  You will have a decent number of homes to choose from, and may encounter some competition for offers on the home of your choice, or none at all.

Before you make an offer to purchase a home, establish whether the current market is a Buyer’s, Seller’s, or Balanced market.  Also, evaluate the price similar properties have sold for in the area, and the length of time these properties spent on the market.  Determine how the home you’re considering compares to these other sales.  Is this one over-priced, under-priced, or a fair price?  By establishing this information prior to making an offer, you will be in a position to negotiate the best price for the home and be prepared for any additional opportunities that may come your way. 

Keep in mind, a realtor is trained to provide clients with this information about the market, helping you make the most informed decision possible.  The right realtor will guide you through the ups and downs of the market and keep you up-to-date with the types of changes you might expect.  These realtor resources and connections will prove to be invaluable as you navigate the real estate market.

The other main factors that affect market value are:

1. Location:

The proximity of the home to amenities, such as schools, parks, public transportation, and stores will affect its status on the market.  Also, the quality of neighbourhood planning, and future plans for development and zoning will influence a home’s current market value, as well as the ways in which it might change. 

2. Property:

The age, size, layout, style, and quality of construction of the building will all affect a property’s market value, as well as the size, shape, seclusion and landscaping of the yard.

3. Condition of the Home:

This includes the general condition of the home’s main systems, such as the furnace, central air, electrical system, etc., as well as the appearance and condition of the fixtures, the floor plan of the house, and its first appearances.

4. Comparable Properties:

Examine the selling and asking prices of similar homes in the neighbourhood.  Ask your Realtor to prepare you a general market analysis of the neighbourhood you’re interested in, so you can determine a range of value for a particular property.  A market analysis will provide you with a market overview and give you a glimpse at what other similar properties have been selling for in that area.

5. Market Conditions/ Economy:

There is no set equation to determine how you’ll reach an offer price.  Rather, the process involves a range of research and comparison that will vary with each situation.  You’ll need to look at sales of comparable properties, and factor in additional data such as the condition of the property, the current market, and seller circumstances.  With this information in hand, you will be able to determine a fair price range and, from there, establish the price you’re willing to offer.

Concentrate on the following areas to help you determine an offer price:

Comparable Sales

• Compare prices of homes that are similar to the property you’re considering in the following areas:  number of bedrooms and bathrooms, square footage, lot size, type of construction, and garage space.
• The most comprehensive and in-depth information can be accessed through the Multiple Listing Service (MLS).  Your Realtor, who will be working closely with you to set your offer price, can help you navigate this service. 

Property Condition

• Observe how the property compares to the rest of the neighbourhood.  Is it average, above average, or below average?
• Look at structural condition:  walls, ceilings, windows, floors, doors.
• Pay close attention to:  bathrooms, bedrooms, condition of plumbing and electricity.
• Also check the fixtures:  light switches, doorknobs, drawer handles, etc.
• What is the condition of the front and back yards?

Home Improvements

• Cosmetic changes can be largely ignored, but any major improvements should be taken into account.
• Take special note of:  room additions (especially bedrooms and bathrooms).
• Items such as swimming pools may be taken into account, but usually won’t affect your offer.  Your Realtor can offer your guidance in these matters.

Market Conditions

• Seller’s Market:

A seller’s market is considered a “hot” market.  This type of market is created when demand is greater than supply—that is, when the number of Buyers exceeds the number of homes on the market.  As a result, these homes usually sell very quickly, and there are often multiple offers.  Many homes will sell above the asking price.

• Buyer’s Market:

A Buyer’s market is a slower market.  This type of market occurs when supply is greater than demand, the number of homes exceeding the number of Buyers.  Properties are more likely to stay on the market for a longer period of time.  Fewer offers will come in, and with less frequency.  Prices may even decline during this period.  Buyers will have more selection and flexibility in terms of negotiating toward a lower price.  Even if your initial offered price is too low, Sellers will be more likely to come back with a counter-offer. 

• Balanced Market:

In a balanced market, supply equals demand, the number of homes on the market roughly equal to the number of Buyers.  When a market is balanced there aren’t any concrete rules guiding whether a Buyer should make an offer at the higher end of his/her range, or the lower end.  Prices will be stable, and homes will sell within a reasonable period of time.  Buyers will have a decent number of homes to choose from, so Sellers may encounter some competition for offers on their home, or none at all.