Frequently Asked Questions and Answers
Can a home depreciate in value?
Generally, real property never depreciates in value, or more so, it is not very common for property to depreciate. This is why it’s a great investment. Make sure you carefully consider location and community when choosing a home, it can effect the homes future value greatly.
If you are in a newly developed area, do some research on the construction of the surrounding areas being developed to determine if they may effect your homes value.
Why should I use a real estate agent?
A real estate agent is more than just a sales person. A real estate agent may act on your behalf, providing you with advice and guidance when buying or selling a home. Due to the constant changing of the market, the information available on listings is not always 100% accurate. There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with a real estate agent.
If you are in the market to buy, it would be advisable to use a Buyer’s Agent. They can make recommendations on what terms and prices to offer as well as negotiating a deal with your best interest in mind.
How does the buyer know how the land surrounding the property will be used?
Typically, the seller does not guarantee how the area surrounding the property will be used. Some purchase agreements ask the seller to warrant what the seller knows about surrounding property uses that might interfere with the use of the home, but many do not. If a buyer is concerned, he or she should contact the property appraiser or tax collector for the county in which the property is located and determine who owns the surrounding land, or speak to the zoning or planning department of your local municipality prior to purchasing the property to understand how surrounding uses may affect you. The title commitment only discloses information about the property being purchased and does not attempt to inform the buyer about surrounding uses. Sometimes a survey will identify the owners of any immediately adjacent parcels. The purchaser needs to take responsibility for finding out what uses may affect him or her. The buyer can ask the neighboring property owners if they know of plans to develop land surrounding the property. The buyer may also wish to talk with the building or zoning office of the local municipality to confirm the zoning of surrounding property so as to know what kinds of uses might be made in the future, although zoning can be changed.
What are some key issues for me to consider when reviewing a contract to purchase a home?
Few people realize that the purchase contract is the most important step in purchasing a home. The details of this agreement determine what you buy or sell and how you buy it or sell it. Before signing, read the agreement carefully and consider the following (not a complete list of issues but intended to give the reader a good start on things to consider):
- Is the purchase contingent on matters such as the availability of financing on acceptable terms or the sale of the house which the buyer presently owns?
- Exactly what land, buildings and furnishings are included in the offer? Are appliances, certain fixtures and other personal property included in the purchase price?
- When can the buyer take possession?
- Is the seller required to provide good, marketable title? Marketable title is title that can be readily marketed (sold) to a reasonably prudent purchaser aware of the facts and their legal meaning concerning liens and encumbrances.
- Who pays for the examination of the title to the property in the event the offer is accepted? Who pays for the abstract of title or title insurance?
- Have utilities been installed if the property is new construction?
- Who pays for the cost of the survey of the property? Does the lender require a survey as a condition of the loan approval?
- What inspections are required by the municipality? Which party will pay for the inspection? Will there be a home warranty contract paid for by the seller? Should the purchaser conduct and pay for a separate home inspection? What kinds of disclosures is a seller required to provide to a purchaser, and what happens if those disclosures are not provided?
- If a mortgage is to be given, is there a tax or recording fee for the filing of the mortgage. If so, which party will pay that tax?
- If a loan is to be obtained from an outside lender, who will pay the loan closing costs?
- If termite damage is found, will the seller pay the cost of repairs?
- Are there any restrictions on the use of the property?
- If your offer is accepted, who bears the risk of loss if the property is damaged prior to closing?
- What persons (such as husbands or wives) are required to sign and accept the offer?
- Are any of the boundary lines in dispute?
- What are the remedies if the buyer or seller defaults under the contract?
- Are there Realtors® involved? If so, who pays the commission? Is the commission payable even if the sale does not close?
- Whose responsibility is it to pay for governmental special assessments that arise prior to closing?
- What type of deed will be conveyed?
What is the difference between being prequalified and preapproved for a loan?
If you’re prequalified it means that you POTENTIALLY could get a loan for the amount stated to you, assuming that all of the information you provide to the bank is accurate and true. This is not as strong as a preapproval.
If you’re preapproved, it means that you have undergone the extensive financial background check, which includes looking at your credit history, previous tax returns and verifying your employment – and the lender is willing to give you a loan, basically meaning you’re approved!
You will usually be provided an accurate figure which shows the maximum amount that you are approved for. Most sellers prefer buyers that have been preapproved because they know that there will not be any problems with the purchase of their home.