For Buyers
Last updated 05-07-08
Sending a message . . . that money talks!
My word is my bond! That expression held great meaning to land buyers and sellers in the "olden" days. Most real estate sales were made with a handshake, and a verbal promise to complete the transaction at some future date.
Later, as a show of their good intentions, buyers would give sellers a sum known as "earnest money" to be held until the sale was consummated. This deposit had more ceremonial significance than monetary assurance of a completed sale.
Today, earnest money deposits are a part of most every real estate transaction. The amount used as a deposit is negotiable between buyers and sellers, with no minimum or maximum required by law.
There is, however, a strong message attached to the amount of money tendered by buyers. As the saying goes, "Money talks!" If sellers are presented with two identical offers on their home, one with a $10,000 deposit, and the other with $500, which do you think they are most likely to accept? Sellers believe the higher deposit indicates buyers who are more qualified to complete the purchase.
Having said that, understand that earnest money is just one factor to be considered when buying or selling a home. The amount of the deposit is relative, and depends on the unique nature of each property. Detailed information about earnest money deposits is available from the real estate agent you choose.
There's property . . . and then there's "property"!
It is important to understand the difference between personal property and real estate, whether selling or buying a home. Real estate is described as "the land and any improvements permanently affixed to the land." Everything else is described as "personal" property.
In a more practical sense, real estate is the land, structures such as a home or detached garage, planted trees and shrubs, built-in appliances, drapery rods attached to the walls, and electric garage door openers.
Items of personal property would include furniture, curtains and drapes hung from rods, portable gas grills, swing sets not planted in concrete, potted plants, fireplace tools, or a free-standing microwave oven.
A simple test to determine whether an item is personal or real property is to ask yourself whether the item is permanently attached to the real estate, i.e. nailed down.
When buying or selling a home, the purchase agreement covers only the real estate being conveyed. If items of personal property are to be included, they must be mentioned specifically in the agreement.
When selling a home, ask your real estate agent to specifically exclude valuable items of personal property in the listing agreement. This may preclude a misunderstanding later over which items stay, and which do not. When buying, if you are unsure about whether items of personal property are included, ask for clarification.
Get moving . . . with a possession date!
Once you decide to purchase a home, your first question may be, "When can I move in?” If you have just sold your home, the question may be, "When must I move out?"
The "possession" of a home is one of many details that must be negotiated to arrive at an "Agreement of Sale." The "date of closing" must also be decided.
Often, the date of possession is tied to the settlement date for the transaction, meaning that once the buyers have paid for the home, and the sellers have given good title to the buyers, possession is transferred. This must be by mutual consent of both parties, and included in the written agreement between them. It can only be changed by mutual consent.
Occasionally, the sellers may find it necessary to remain in the home for a period of time after closing. This "post sale" occupancy of the house must be agreed upon in writing and included in the purchase agreement. The sellers may or may not be required to pay a rental fee, depending on the agreement.
Likewise, purchasers may ask to occupy a vacant home before the purchase transaction is finalized. Again, this must be in writing and included in the purchase agreement.
To learn more about possession of the home you are buying or selling, ask the real estate agent involved about your rights and obligations.
Trade up . . . or trade in?
If you're ready to upgrade to a larger home, or need to relocate, you're presented with a dilemma. You can't simply “trade in” like an automobile, so your choice is
1) sell your existing home first, or
2) own two homes until the first one sells.
But what if you can't find another home? Will you be left on the street? Or how can you afford to own two homes at one time? What is the answer?
If owning two homes is out of the question, explain this to the agent who lists your home. It's a good idea to begin looking for your next home before you have a buyer for your old one, but not necessarily wise to attempt a purchase.
If you find another home, and make an offer contingent upon the sale of your present one, sellers are less likely to accept your offer. But while your home is for sale, continue looking at others. Try to select two or three that meet your needs. Then, as soon as you have a contract on your present home, begin negotiations to purchase your favorite. If, by chance, it is already sold, you will still have the opportunity to purchase one of the others.
Ask your agent to explain this situation in more detail. The more you know, the more comfortable you will be with your decision.
Real people. . . sell real estate!
Whether you are planning to sell a home or buy one, chances are you've considered (or already have been) searching the Internet for some basic information. You're not alone, because recent research has shown that 92% of homebuyers use the World Wide Web to preview homes and locate real estate offices.
While such tech-savvy buyers and sellers realize the value of face-to-face contact, almost all of them have found that information on the Internet helps them to understand the buying and/or selling process better.
Some of the most useful information you'll find online will be facts and figures about your area - finding local businesses, schools, entertainment and shopping. Start with the local Chamber of Commerce website for such directories and other local links.
While visiting an agent's office is inevitable, you can find photos, descriptions, and even “virtual tours” online to begin your home search. Of course, a “virtual tour” is never as good as the “real thing,” but it's a good place to start, especially if you're relocating and trying to maximize your travel plans.
Regardless of how you use the Internet to gather and organize your information, be sure to avoid the “virtual agent.” A terrific website can promote a qualified and experienced professional, but nothing beats talking to and working with a real person when it comes to your real estate needs.