Realtor Insider explores inside the mind of a Realtor to learn the hidden secrets of buying and selling real estate.
Raise your hand if you have ever seen House Hunters on HGTV. I am sure most of you now have your hand raised. Every home owner, or potential home owner, has checked out the show from time to time. It is fun to watch buyers look over three homes and make a decision on one of them. Buying a home is so easy if you believe the show has any basis in reality.
Don’t believe the hype. Buyers be warned. It is not easy to buy a home today, any more so than it was 20 years ago. Sure, there are technological advancements that exist to ease the burden of house hunting (aka Zillow). And, yes, there are big well funded companies (Opendoor) that strive to convince you that buying a house using their systems is as easy doing the self check out at your local Walmart.
With these big companies , you have to realize that this information is gleaned from the hard work of realtors all over the country. Zillow would not be making its millions without the hard work of realtors. They make it easy to hunt for a house, but you still have to make an offer using a legal promulgated contract. You have to know how to negotiate back and forth with the sellers. Once the house is under contract, you need to go out to find an inspection company and deal with making a repair request.
With these companies that buy your home directly, you have to be careful that their offer for your house matches want you would get on the open market if you use a Realtor. Many of the Ibuyers will charge fees matching, or even exceeding the usual 6% commission, and you might even get a lower price for your home. Is it really worth a few thousand dollars to quickly sell your house? This is the question you have to ask yourself.
So, let’s say that you decide to go the traditional route and you are buying your first home with a Realtor, you need to know what to be cautious of during the process. What red flags do you need to know in order to avoid getting yourself in trouble financially or legally.
First, you should be glad you have the Realtor there to help you. This person has been trained in real estate and (hopefully) has experience in getting homes sold. You can rely on them to know a lot of the red flags. However, Realtors are humans so they will even miss them from time to time (a red flag in of itself).
It doesn’t hurt then for you to know some of the warning signs that might be a signal something is amiss with the process. Here are five red flags at various stages of buying a house.
Realtor is slow to respond – Hopefully, you went through a process to select your Realtor and used some criteria to evaluate each one interviewed by you. Even when you do, you can still pick a dud of a Realtor. When a Realtor is slow in returning messages, you have to ask yourself if you selected the right one to help you buy your first home. Before you let it get too far, you should confront them about their lack of responding to your inquires. If they still lag in response time after that, you should move on to your second choice.
There is no seller disclosure on the listing – Seller Disclosure Notices are forms sellers fill out to let buyers know what is wrong with the property (to best of the seller’s knowledge). If you find a property you like, you should ask your Realtor for a copy of the seller disclosure. If one is not on the listing, you might be wary of the property. If the listing is day or two old, it could be the listing agent has not had a chance to get it online yet. The seller could also be tardy getting it to the listing agent. If the listing has been online on a few days, you want to be cautious, if there is no seller disclosure because the lack of disclosures by the seller could indicate something wrong with the property. What is the seller hiding that they don’t want to put it on paper in a seller’s disclosure?
Fresh paint in only some places – When you sell a house, you have to present it nicely for buyers. Selling a house is like any other sell job. You have to make the product look appealing. With this in mind, many sellers will paint rooms to freshen them up. What happens if you see fresh paint in just one area of the house? It could be a sign the seller is hiding cracks or damage to the ceilings or wall.s In fact, any hasty rehab work should be noticed and questioned by the buyer. First time home buyers should make sure to point out the work to the house inspector to get an opinion on it.
Seller doesn’t respond to a repair request – When all the inspections are done, you get to send a repair request over to the seller. Hopefully, you have done sent over the repair request with plenty of time left in the option period for the sellers to consider it. However, some sellers will wait to reply back to a repair request. Why? Some sellers hope buyers (and their Realtor) will lose track of time and let the option period elapse before the repair amendment can be signed by both parties. If a buyer hasn’t heard back from the seller by noon on the last day of the option period, the buyer’s realtor should send a termination form to the seller. It should be made clear to the seller if they don’t respond by the end of option, they can consider the contract terminated.
Mortgage professional is not answering status updates requests – When all the paperwork is into the lender, the only task left is for the underwriter to review the file and give the clear to close. If the mortgage professional does not answer a buyer’s inquiries promptly, you should press the issue. Many mortgage professionals will delay delivering bad news about holdups in the approval process. These lenders feel it is not necessary to be upfront about issues with their customers until the very last minute. By doing this, they raise the stress levels of the buyers (and all the other parties involved in the purchase of the home). Don’t let them do it! We all have busy lives requiring planning ahead for meetings like the closing. By knowing right away when delays will occur, everyone can change the plans. It is not brain science!