Buyers and Sellers

I wrote this to help advise of Real Estate WIN/WIN attitudes which create amicable and stress-free transactions.

Often times, I meet with buyers and sellers who describe previous stressful frustrating real estate situations and transactions with other realtors, some of which failed or left one party feeling they were cheated with an unfair outcome.

It is important to understand that a real estate transaction is a collaborative effort of many professionals who ALL have to do their job on Que in order for the next person to do theirs.

For example, follow along these steps to see how one affects the next.

Attorney needs approval from you prior to sending out the letter.

(If you wait two days to read and approve an addendum the attorney sent to you then in that two days another buyer swoops in and makes a better offer that the sellers accept, this can be avoided by hyper-focusing and being very responsive to your attorney. ) 

If you are the seller and you delay in responding, a nicer home may hit the market and your buyers may abandon your transaction with no penalties because you are not officially under contract yet. They can go after and win the other house. 

From the above two scenarios during the attorney review process, I advise that your attitude must be that the comprehension of your contract and addendum as well as communication with your attorney are a top priority in your busy day to avoid surprises and stress.

Staying on the subject of attorney review process. If the letters going back and forth are fair to both parties, the likelihood of getting under contract faster is much higher than if one party is making all one sided demands for the transaction.

In good faith the contract should allow both parties to walk away if costly or major or serious inspection issues arise and no resolutions can be agreed upon. This gives both parties a good feeling to proceed. 

When I see demands for “no way out of the deal no matter what” type of statements going across my emails, I find this to be a waste of time for the process. The other party’s attorney almost always disapproves only to replace it with a more fair and reasonable statement. Creating fair terms for both parties helps make this process faster and more efficient. 

Either way, the goal is for both a buyer and a seller to fully comprehend the extent of what these new ground rules are for the course of the transaction and agree to their possible implications. 

Moving Parts

In a real estate transaction, there are many moving parts and steps. Once the attorney review period is concluded the buyer schedules their home inspection immediately. 

The home inspector should be able to provide a report within a few days of conducting the inspection. If you have observed the roof looks to be extremely old and in disrepair, then get a professional roofer also scheduled for the same day as home inspector so that he can provide an estimate of roof repairs asap, either for your own information or to request a credit. During the home inspection, if the inspector recommends further inspections by a structural engineer or someone who specializes outside his scope of expertise due to his findings, this should also be done ASAP. 

Keep in mind, the seller is waiting to know what you expect as a credit or repair to be made. Do not take long to submit this through your attorney. Remember to be reasonable in your expectations. 

Sellers can also avoid surprises by having their own presale home inspection so they have a chance to correct or disclose certain issues that are to be accepted by buyer “As Is” before they even make an offer. 

For example, if your sprinkler system is not functioning, a seller may advise all buyers this is not something they should expect to be fixed by the seller and must be accepted “As is” 

The inspection period is usually the most critical period in a transaction as well as the process of obtaining a Continued Certificate of Occupancy by the township where the property resides. 

Sometimes the homeowner never obtained or failed to close out a work permit for something like a new water heater or a deck. This must be known and addressed very early in the transaction. 

This way if needed, a new permit may be filed and the inspection to close it out can be set up in time to receive a clean CCO by the time of the closing date. 

Requesting An Open Permit request can be made to the township by either buyer or seller. The CO inspection can not be scheduled if open permits exist without closing them out first!

Appraisal

If the buyer is not all cash and is obtaining a loan, the appraisal is the bank’s way of making sure in the event the borrower stops making payments, the bank has a cushion of equity in the home and that the lender is not lending more than what the property is actually worth compared to similar recent sales in the area.

In the event the property appraises for less than the purchase price, this presents a problem for the buyer to obtain the loan unless the seller agrees to lower the purchase price, or the buyer agrees to make up the difference at the closing with additional funds. Or a combination of both parties meeting somewhere in the middle.

Very rarely will a request to appeal the appraisal result in a higher appraisal.

In today’s competitive market, some buyers agree to make up the difference just to win the bid in a multiple offer situation. 

Depending on the home, this is committing to a big unknown $$$ factor and setting the buyer up to be overpaying for the home compared to recent sales. 

If the buyer desperately wants the house, this is done so willingly if they have the additional funds or the ability to restructure their loan to have a lower down payment. 

In a fast-moving uptick market, like this one we are seeing in NJ, appraisals are not keeping up with very real demand. 

In reality, a property is worth what a buyer is willing to pay for it and an appraisal is merely an opinion based on recent comparable sales.

Ordering title and survey

If previous issues are not resolved, sometimes attorneys hold off on ordering title work or surveys in the event of the buyer decides to terminate the deal. Why incur additional expenses if the buyer is not sure if they will be willing to move forward? 

Both parties should expect a delay in the original closing date if negotiations have taken many days. This will alleviate the stress for everyone who now have to step on the gas to make up the lost time. Remember the next step is relying on the previous step so having a reasonable expectation of timelines with respect to this extra lost time is important.

Clear to close.

There are no better words to hear as all ears are patiently waiting for this to be communicated from the lender. 

YOU ARE CLEAR TO CLOSE! 

The buyer must have completed many steps and with the collaboration of title company, attorney, seller attorney, this will complete the closing.

So what is needed to close? From a resolution of terms, inspection issues, appraisal issues if any, CO issues, title issues, survey issues if any, timing of transactions if parties are both buying and selling, obtaining homeowners insurance, calling to put utilities in their names, seller to call for final water reading, seller to request pay-off statement from their own lender, to coordinating movers. 

For this reason, I have created a check list for buyers to keep on track until the closing, so they do not overlook important steps and feel somewhat in control. 

Getting back to the right attitude.

The best attitude for both seller and buyer is to be responsive, reasonable, fair and respectful of the other person’s circumstances and time lines. 

In the end we are people with all different real-life circumstances.

Business may be “just business” but when all parties treat one another with dignity and respect, the process becomes amicable and stress-free. 

I am pleased to set the right tone and the environment for transactions to have this win/win attitude. 

Who ever you choose to guide your process, be sure to choose someone who checks in frequently to remind and keep you on track with excellent communication between attorneys, lender, and all other parties involved. Someone who has anyone you need on hand and answers your questions quickly to alleviate stress. 

Below find the helpful checklist which will help buyers and sellers stay on track with what comes next after an accepted offer. 

The Transaction Steps Check List

After accepted offer; 

1. Retain an attorney — attorney review process begins. Be diligent in responding to your attorney. (A very responsible attorney I recommend is Laurence Sheller NJ real estate attorney (609) 610-5358

2. Under contract — deposit due send certified check to an attorney asap, also (send fully executed contract to the lender handling your new loan application) be sure to provide the lender with all necessary documents asap when requested. (Lender Ed Pascocello 732-580-7347 offers very competitive rates) 

3. Schedule and perform home inspection — (I recommend Liberty Home Inspections because of their thorough inspection as well as their fair pricing (201) 819-1066 ), submit reports as well as repair/credit requests to your attorney- negotiations and resolutions complete this process.  

Sometimes an addendum is needed to reflect agreed credit towards closing costs by the lender. NOTE -If there is a credit for inspection issues, you must tell your lender asap to avoid delays at the closing with this surprise change in sale price.

4. Give lender the green light to order the appraisal.

5. Satisfy all additional requirements to lender to obtain mortgage commitment. 

6. Mortgage commitment received and forwarded to your attorney. 

7. Have attorney order survey if necessary. 

8. Have attorney order title search (provide title to the lender) (FYI title search and insurance inform the buyer there are no lien  on the property or judgments on the sellers which will affect the new ownership of the property. For example if the seller never paid the roofer then the  roofer decided to sue the owner, now there is a lien on the property. How would a new unsuspecting buyer know this? Title insurance insures the buyer of a clear title for ever from this purchase until they in turn needs to sell. Unless while bew buyer owns the home they get sued for not paying someone of course. 

9. Shop home owners insurance – pay one year in full and provide receipt to your lender. The mortgage requires it upfront to begin with, then encorporates the future payments monthly into your loan. 

10. Have attorney request receipts and proof all inspection requests if any were performed.

11. Have attorney request a copy of the Certificate of Occupancy from seller and include Fire Certification also.

12. Set a closing date (make sure to acknowledge the Closing Disclosure with your lender 3 days prior to the closing. Also obtain the final number for the certified check to bring to closing table.)

13. Have attorney request final water reading. Seller should request a pay off statement from their own lender to provide to their own attorney. 

14. Call utilities to be transferred to your name.

15. Schedule final walk through of the property usually day of closing.

16. Attend the closing remember to bring the certified check as well as two forms of ID to closing. They will not accept a personal check at the closing. Sign your life away. 

17. Congratulations! Now you can MOVE IN!!!

You are welcome to save this article to refer back to as my clients often do. My clients use this as a helpful check list which keeps them right on track. 

Joanna Renner 

“the Realtor to choose who encourages and facilitates stress free transactions.”

646-296-6864 always open

Sincerely,

Joanna Renner Keller Williams Realty West Monmouth. 

646-296-6864