#1 Financing: Following the downturn, the home mortgage industry became very cautious and risk averse. Recent changes in federal laws governing mortgage originations have significantly complicated the lender’s already knotty procedures. Many appraisers are still smarting over the crash of 2008-2012 and they often evaluate properties from a conservative point of view.
- Buyers should look for a loan officer who is very organized, communicative and local. Start the loan process well before writing offers then set reasonable time frames for loan approval and closing. Agents should do some additional detective work for the appraiser on the recent, comparable sales allowing the agent to share insight into those transactions. Providing the appraiser with a list of amenities, upgrades and improvements that may not be readily apparent always helps.
#2 Inspections: They say you can’t judge a book by its cover, which is often the case in real estate. Moisture conditions such as mold and dry-rot, constructional/material defects and unprofessional modifications pretty much lead the way when it comes to “deal-breaking” repair conditions discovered during inspections.
- In Nevada, sellers are required to complete a property disclosure form. All parties should ensure this document is thoughtfully completed and delivered in a timely manner. Buyers should set reasonable expectations for themselves; a 40-year-old home is rarely up to current building codes and standards. Sellers should consider performing a pre-inspection prior to marketing the home, then repair and disclose as necessary.
#3 Lack of Communication: This can occur in any number of combinations and concerns all parties in the transaction. Buyer and lender, agent to agent, title/escrow with all parties and the list goes on. Failure to effectively communicate from just one participant almost always leads to frustration and can easily derail the deal.
- Rather than choosing an agent with a fabulous car or the coolest web-site, buyers and sellers should seek “full-time” agents with reliable communication and technology skills. Many agents can get you to third base; find one committed to getting you to home plate. Should one of the players leave town during escrow, ensure there is a plan in place to maintain contact and fulfill obligations in their absence.
#4 Poorly Written Contingencies & Failure to Manage Timelines: Virtually every purchase contract includes contingencies and conditions which contain very specific timeframes for resolution. Vague or poorly written contingencies will almost always lead to confusion that often evolves into disputes. More than loan approval; approval of inspections, preliminary title report and HOA documents are just a few of the many contingencies to be resolved. All must be managed and satisfied in a timely manner.
- There should be no “blanks” in your real estate contract. If a clause is unimportant or not applicable write “waived” or N/A in the applicable space. Additional language added to the agreement should be clear and easy to understand. While in escrow, I prefer to act as the air traffic controller. I create a timeline calendar for all parties in the transaction and schedule at least one weekly call or note to all concerned.
#5 Buyer & Seller Remorse: It is very common for home buyers to question whether they’ve missed the right house or paid too much for the home they’re in contract to purchase. Sellers often worry that they may have left money on the table. Should either party to the transaction develop serious doubts, the transaction is likely to fall into distress. Decisions that should come easily become difficult to make.
- This is a complicated topic yet it’s actually quite easy to avoid. In my case, resolution comes down to clients making well informed decisions. Don’t fall for pressure and know that clear objectives lead to successful outcomes. Agents often jump right into the “what’s & how’s”. What price range and area? How many bedrooms and baths? What price do you want for your home? Take time to consider the “whys and whens.” These questions lead to more intuitive and enlightening conversations. Individual market conditions, supply vs demand for example, will ultimately dictate much of the outcome. The duty of the buyer and seller is to find an agent skilled in guiding them through their decision process.
Photo courtesy of Flckr Commons: House Hunting/Walter Ayman