Some questions for a new year
I’m sharing some questions I’ve saved over the years. I couldn’t quite bear to discard them, but I never printed them.
Q: Upon selling a co-op or condo in a multistory building, would it be mandatory to divulge the fact that at times there are leaks from upper floors? Thank you. — no signature A: Yes. Q: Is there any way that I can refinance my existing mortgage without going through a Realtor? If not, then am I correct in assuming that I would not have to pay the usual commission that a buyer’s and seller’s Realtors would get on the sale of the house? Will I only have to pay half a commission to my Realtor? —X.X.
A: You don’t need a real estate agent at all. Except as it helps with sales or rentals, real estate brokers aren’t usually involved in arranging financing.
You’ll deal directly with a lender to refinance your mortgage loan. Start by contacting your present lender to see if it is interested.
Q: I go to court in two weeks for a divorce hearing. My wife is attempting to get part of the appreciation on two rental properties that are my separate property. Would you be so kind as to give me your learned opinion on what amount of appreciation (percentage or otherwise) has taken place in the average residential and condominium markets between six years ago, when we married, and last March, when we separated?
The house has three bedrooms, 1.5 bathrooms, a carport and a family room. The condominium has two bedrooms, 1.5 baths and a private patio.
If you could give me a general picture as to the national appreciation and, if possible, a more local (southwest U.S.) figure, I would have some idea for the court to include in deliberations. Your urgent attention would be most appreciated. If you could mention some of your credentials, it would have more weight. — X. X. X.
A: I’m afraid my credentials — things like authoring several real estate textbooks and writing this column for a long while — wouldn’t help much. Sorry. How about hiring a professional appraiser? Q: In one of your old columns, you were asked how one arrives at the right monthly payment for a mortgage, and you said, “The formula is complex.”
While it may seem complex to some, this is because some of the terms are raised to a power, which is somewhat more than simple arithmetic.
If A is the amount borrowed, R is the annual interest rate in decimal form and T is the length of the loan in months, the equation to find the monthly payment, P, is written this way for computers: P = (A *R/12) * (((R/12+1) * (T))/((((R/12)+1) * (T))-1) You did not print it then, but I hope perhaps you can print it now for others to use. — X.
A: OK, here it is, with my apologies for thinking it was complex . ... Good luck to anyone trying to understand it.
Q: When we received a full-price offer on our home, it included a percentage reduction to assist with closing costs. Is the percentage negotiable? Because clearly we can’t negotiate the purchase price offer. — C.S.
A: Your buyers are offering (in writing) to pay your full asking price but want you to pay some of the closing costs they’ll have on the day they settle up buying your home.
Everything is negotiable. Yes, you can counteroffer (in writing), refusing to pay some or all of their costs. But if they don’t accept that, understand that you can’t go back and take their original offer. Once you counter, the previous offer is dead. You’d run the risk of losing these buyers altogether.
If you accept this offer, on the other hand, that’s it; your house is off the market. And if all goes well, it’s sold — subject to (depending on) whatever else they listed in their offer. Perhaps, for instance, they’ll need to obtain a mortgage loan.
You’re probably wrong when you say you can’t negotiate the purchase price. Because they included that “but” in their offer, you might even be able to ask for a higher purchase price.
There’s no right or wrong about whether you should negotiate. It depends on a lot of factors. How long has your home been on the market? Have other buyers shown interest? How did you price it in the first place? How badly do you need to sell?
Are there other contingencies in the offer? Would these buyers be able to come up with the cash needed at closing?
At any rate, all you asked is whether you could counter about the closing costs. Yes, you may, but if you do, understand that you risk losing the deal completely.
Q: We are buying our first home, and they’ve set a date for the closing. What should we expect, and what should we look out for? Anything we should do in advance? — H. R.
A: If you or the seller is using a broker, that’s the person to arrange a last-minute walk-through for you. Perhaps your sales contract stipulates that, but in any event, it’s reasonable to request it on your part. You want to see that nothing much has changed since you made your offer — no newly broken windows, any furniture or appliances included in the sale still in place. The house may not be spotless, but you can expect broom-clean condition.
You won’t notify the utility companies of change of ownership till after the actual transfer of title — there’s always the possibility of something going wrong.
Your email doesn’t tell me where you’re located, and customs vary widely. In Maine, they “pass papers.” In California, they “go to escrow.” The process may be called settlement, transfer or closing. If each party is using a lawyer, you may meet in the office of the older one, the county courthouse or maybe just online. In some areas, all the parties gather around a table.
In any case, what happens is: • The seller proves marketable title (unchallenged ownership). • The buyer pays for the property. This often involves final settlement with a lender and proof of insurance coverage at the same time. • Financial details are adjusted between buyer and seller. These might include items like prepaid or unpaid property taxes, water or sewer charges, heating oil left in a tank, or personal property like furniture or appliances being left with the real estate. • The seller signs and delivers the deed that transfers ownership. Though that deed will then be entered in the county public records office, you become owners at the moment it’s placed in your hands. You seize the deed, and your ownership is known by the legal term “seisin.” You’ll be handed keys to the house, though you will probably change the locks as soon as you’ve moved in. And be sure to get remote garage door openers and security alarm codes.
It’s been years since I’ve attended real estate closings, and I’m sure they’ve changed a great deal in the internet age.