Tag: home buyer

Posted on

Build your dream home and avoid a nightmare

by Dan Krell
DanKrell.com
© 2012

custom homeThe fact that home sale inventory has dropped off compared to recent years is not news. The reduced number of homes for sale has made it more difficult for increasingly discerning home buyers to find the “perfect” home. And for some, a perfect home even goes beyond a new “spec” home or new home development; so they consider a custom home as a way to uncompromisingly have all the features they really want in their new home.

There are many pros and cons to building a custom home. As you might imagine, one clear advantage of building a custom home over buying a resale is that you can choose your home style and floor plan to fit your taste and lifestyle. Customizing a resale to fit your needs has its limitations; besides the physical limitations of the home itself, you may encounter issues with zoning and/or a HOA. Buying a spec home or a home in a new home development also has limitations; you are typically limited to the home styles and floor plans offered by the builder (and some will not comply with customization requests).

Planning to build a custom home takes time and money. Choosing the right contractor and architect is highly important. Designing the home you want requires time for permitting and construction. Weather is often an impediment; poor weather conditions can prolong the process and possibly increase your construction costs.

Next, you’ll need to find a place to build your dream home. Finding the perfect lot can sometimes be difficult, depending on the type and size of home you’re planning. Among the many things to consider: you need to make sure that the lot is zoned appropriately, as well as being large enough for the home you choose to build. Additionally, you should consider utility availability to the lot: is public water and sewer available; is natural gas available. Other issues that could affect your lot: clearing trees, easements, and/or protection areas.

Custom HomeIf an unimproved lot is not found to meet your needs, another option is to buy a “tear down.” A tear down is an old home that is torn down to build a new home on the existing lot. Of course, there are issues that need to be addressed when going this route as well. Besides encountering building issues similar to those of an unimproved lot, you may encounter additional zoning and permitting constraints with a tear down.

Unless you’re willing to pay for your project with cash, you’ll have to secure financing. Depending on your project, there are various loans are available so consult your lender about terms and qualifying criteria. Some loans may combine the acquisition of the land and the construction; and other loans could provide the loan for the construction, and then convert to a permanent mortgage.

Although it’s great feeling to build the home of your dreams, you should also consider its resale. Tastes vary, so your idea of a dream home may not be everyone else’s. A large amount of non-traditional customization could not only turn off future home buyers, but could very well hurt your sale price.

Building a custom home requires due diligence. The Maryland Home Builder Registration Unit (of the MD Office of the Attorny General)provides consumer information about purchasing new homes and the Home Builder Guaranty Fund (www.oag.state.md.us/Homebuilder/index.htm).

More news and articles on “the Blog”
Protected by Copyscape Web Plagiarism Detector
This article is not intended to provide nor should it be relied upon for legal and financial advice.  Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

Posted on

Think about the parking before you buy a home

by Dan Krell
Google+
DanKrell.com
© 2012

New HomesIn light of the increased attention of predatory towing in Montgomery County, it’s become apparent that parking is one of those things we often take for granted; parking doesn’t seem to be a consideration until we are hassled about finding a spot to leave our car.  Sure, we may think ahead about parking when we venture downtown or to the metro, but what about when we get home?  Parking can sometimes be a challenge as well as the source of neighbor conflict.  When buying a home, make sure you’re aware of the neighborhood parking conditions.

To ensure that residents have a parking space, many townhome and garden condo communities offer at least one, if not two, reserved parking spaces.  This may sound good, but if your family has multiple cars parking may still be a challenge.  However, if you think parking your extra cars in the unreserved spaces (often labeled “visitor”) solves your problem; consider how many other neighbors who own multiple cars are parking in these spaces as well – which could make the neighborhood feel like you’re parking in a busy downtown area.

Making matters worse, imagine how inconsiderate neighbors or visitors who park in your reserved space can affect your day.  Returning home late in the evening to find an unauthorized car in your reserved space, and no other parking spots available can not only be frustrating but leave you angry and resentful.

Parking issues are not only a phenomenon of high density communities, but can also occur in neighborhoods comprised of single family homes.  Regardless whether you have a driveway or not, off street parking can sometimes be tricky.  Much like the scenario of having an unauthorized car in a reserved parking space: you might encounter situations where people park in your driveway without asking (usually when neighbors have parties), or more often someone blocks the entrance to your driveway making it impossible to leave or enter.

If you’re planning to buy a home, don’t wait until it’s too late to think about parking.  Experts recommend you visit potential homes in the evenings and weekends to see how the parking is impacted when most people are home.  Circumstances that could impact a neighborhood’s parking availability might include recreational and commercial vehicles, as well as a neighbors’ home based businesses.  If you have a chance to interact with some of the neighbors, ask about the parking situation and how the neighborhood copes with parking issues.

Additionally, if you’re considering a home that’s located in a home owners or condo association; the association rules and bylaws are recommended reading.  Familiarize yourself with the rules and bylaws so you know the association parking regulations and how the management company deals with unauthorized vehicles.

In many areas there are parking restricted neighborhoods, like some in Montgomery County MD that are included in the Residential Permit Parking Program, which helps limit non-resident parking in neighborhoods that are impacted by nearby high traffic public areas and facilities.  Ask your real estate agent about obtaining resident and visitor permits as well as asking about the parking situation.

When purchasing a home you should consider the parking conditions, as well as how the neighborhood deals with unauthorized parking.  Many high density communities have strict towing policies, which makes someone think twice about unauthorized parking after being towed.  However, most neighborhoods solely rely on the residents’ thoughtfulness of their neighbors.

More news and articles on “the Blog”
Protected by Copyscape Web Plagiarism Detector
This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of November 19, 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

Posted on

Consider rescheduling closing instead of a post-settlement occupancy

Home sellers and buyers look forward to closing day, when the deed to the home transfers; and in a perfect world, everyone moves on with their life. However, there are times when the seller asks to stay in the home after settlement. Ideally, a post-settlement occupancy can be avoided by adjusting the settlement date to accommodate the extra days needed to stay in the home. But alas, the world is not perfect and sometimes a post-settlement occupancy is quickly arranged. Whether you’re the home seller or the buyer, make certain you understand the post-settlement occupancy agreement: what you’re getting into, as well as your risk and liability.

Typically, when someone “rents” a home, a standard lease is used; but since the post-settlement duration is usually very short, the post-settlement occupancy agreement is mistakenly an afterthought to the home sales contract. Here in Maryland, there may be various forms that are specifically used in a particular region for this purpose; such as the one that is used here locally.  Just like the sales contract, the post-settlement occupancy agreement contains terms and conditions, including duration and fee collected.

Additionally, a deposit is collected in case there are damages to the home during the post-settlement occupancy. The buyer usually has a walkthrough prior to the settlement, as well as at the end of the post-settlement occupancy to ensure that there is no damage and the home is conveyed in the condition that is expected.

Unfortunately, the risk of loss and liability to the home during a post-settlement occupancy can be vague. Even if the post-settlement occupancy agreement specifies who is responsible for such loss, there may be additional considerations.

moving dayIt is usually expected that the seller repair any damage they caused during their post-settlement occupancy. But what about damage or loss caused by a fire or an extreme weather event (such as a tornado or a hurricane)?

Even if the post-settlement occupancy agreement is specific about risk of loss and liability, your insurance company might have a different view of risk of loss and liability in a post-settlement occupancy arrangement. Any insurance carried by the home seller may limit or exclude coverage from such damage/loss that occurs during the post-settlement occupancy. Furthermore, the buyer’s home owner’s policy may have exclusions and/or limitations for coverage if the home is vacant or occupied by anyone other than the policy holder. Consult with your insurance company.

Another consideration is that the buyer’s mortgage company may have restrictions about a post-settlement occupancy. The mortgage note may specify that the home be “owner occupied;” which means that the home is not to be rented. A post-settlement occupancy by the seller may infringe on the terms and conditions of the mortgage note. Consult with your mortgage company.

Even if your real estate agent is able to explain the post-settlement occupancy agreement to you, there are considerations other than what is written on the form – you should consult with your attorney before entering into such an agreement.

Due diligence is required before entering into a post-settlement occupancy agreement. Consult with your agent about rescheduling settlement, if possible. Additionally, consult your attorney, insurance agent, as well as your mortgage company to make certain you understand the terms and conditions of the agreement, as well as your liability and risk of loss.

Original published at https://dankrell.com/blog/2012/11/08/consider-rescheduling-closing-instead-of-a-post-settlement-occupancy/

By Dan Krell

This article is not intended to provide nor should it be relied upon for legal and financial advice. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.
Google+

Posted on

Coping with buyer’s remorse

by Dan Krell
DanKrell.com
© 2012

Coping with buyer’s remorse: regretting your home purchase

homeDid you ever have the nagging feeling, after buying something like an expensive piece of clothing, that maybe you should’ve saved your money or waited for the sale? If you’ve experienced buyer’s remorse, then you know that doubting feeling. Did you know that the likelihood of experiencing buyer’s remorse increases as the expense of the item purchased increases? Buyer’s remorse from buying a home can sometimes leave you feeling uncertain and hesitant.

Buyer’s remorse is sometimes referred to by consumer experts as post purchase dissonance, and is often caused by a discrepancy between a home buyer’s experiences and their beliefs. Simply stated, buyer’s remorse is when the home buyer feels regret about their home purchase. Although many home buyers may experience buyer’s remorse to varying degrees; not all home buyers experience buyer’s remorse.

Consumer behavior experts concur that the probability of experiencing buyer’s remorse is more likely to occur when the decision is binding and/or has a long term commitment, while there are other viable options available, along with a concerted effort in choosing the perfect home, placing a high level of emotional significance on the purchase, and the buyer’s propensity to experience anxiety.

As a home buyer, you might think that the home buying process is ripe for buyer’s remorse because: a real estate contract is not easy to back out of; you might feel that there is a considerable financial commitment; after making a thoughtful choice of home, you fantasize of the home with the features your home does not have, and with a lower price tag; you have placed an emotional investment on buying the home; and you’re feeling the pressure of the home buying process.

If you’re planning a home purchase, be aware that most people may feel some amount of buyer’s remorse sometime during the home buying process. However you can reduce the negative impact of the experience if you:

Respect the buying process: You should recognize that buying a home can be stressful, and can create feelings of anxiety when the unexpected occurs. Do what you can to minimize any additional stress and pressure created by the demands of buying a home.

Choose the right real estate agent for you: The interaction you have with your agent is subjective. The worst feeling you could have is when your agent is MIA when you need them. Working with a responsive agent, who makes themselves available when you need them, can reduce any additional anxiety that is created from ambiguous situations that can pop up during the process.

Don’t continue searching for homes: Once your offer is accepted, you should stop looking at available homes. You are more likely to increase doubts about your purchase if you compare how homes on the market differ from yours. However, consumer research indicates that your confidence about your purchase increases if you recognize how those homes are similar to yours.

Take what others say with a grain of salt: It’s difficult to be discreet about your home purchase, especially with your family and close friends; and, of course they won’t withhold their opinions about it either. Having the opportunity to listen to another’s view point about the home and the process could solidify your confidence about your home purchase- when you put their input in perspective and recognize that their advice may not apply to your situation.

More news and articles on “the Blog”
Protected by Copyscape Web Plagiarism Detector
This article is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel the week of October 29, 2012. Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.
Google+

Posted on

MD home sellers and HOA docs

MD home sellers – be aware of your obligation to provide HOA or condo docs.

townhomesAs time passes, real estate contracts become increasingly lengthy. Both home sellers and buyers are incredulous when they first encounter the many pages of a home sale contract. To put it in perspective for them, I often retell the stories that I have been told about how a time in the past real estate transactions were conducted with one or two page contracts, and sometimes even on just a handshake. To offer some solace to the seller/buyer, I assure them that there is importance to the seemingly endless number of notices and clauses; many notices are reminders to the seller and buyer about their obligations in the transaction.

A good example of the need for such notices is the seller’s obligation to provide the buyer with HOA/condo information and docs. In the past, this obligation was often taken lightly; sellers would often dig out the association rules which they were given when they purchased the home, dust them off and give them to the home buyer; with little expectation that the information would be reviewed.

Unfortunately, this practice is still occasionally being attempted by unknowing sellers and their agents. Several years ago, an agent asserted that an ancient looking manila envelope (that was stained because it was most likely used as a coaster and trivet) that the seller received when they purchased the home fulfilled their obligation to the buyer, even though the information was out of date and incomplete.

Providing up to date and complete documents to the home buyer allows the buyer not only to review the association rules, but also makes them aware of the financial and legal standing of the association.

As a home seller, it’s important for you to understand the need to fulfill your obligation with regard to providing HOA/condo association information, and to do it quickly. The buyer may “cancel” (void) the contract if they do not receive all the required information; and the buyer has a review period (five days to review HOA docs, and seven days to review condo docs), during which they may “cancel” (void) the contract.

Most resale packages that are obtained from HOA/condo associations contain all the documents required, however, it’s still up to you the seller to ensure all the required documents are enclosed in the package. To be more specific, local HOA/condo real estate disclosure forms were recently changed for clarity; including asking the seller to list fees, assessments, association contacts, and other information.

Home buyers are informed consumers; many are aware they are required to receive specific information about the HOA/condo from the home seller. And although the review period for the HOA/condo docs may have been abused by home buyers in the past, during the hectic sellers market when the review period was used as an “out” from making offers on multiple properties; today, home buyers take the review period seriously and many read the docs. You might even get a question or two about the bylaws/rules from an astute home buyer.

If you’re planning a sale of your home that is located within a homeowners association or a condo, you’re obligated to provide the home buyer specific information about your association. Besides your listing agent, who can guide you through the requirements and your obligations; your HOA/condo association and its management company are helpful sources to obtain the necessary information.

Original published at https://dankrell.com/blog/2012/10/25/md-home-sellers-and-hoa-docs/

by Dan Krell

This article is not intended to provide nor should it be relied upon for legal and financial advice.  Using this article without permission is a violation of copyright laws. Copyright © 2012 Dan Krell.

Proudly powered by WordPress