home sale Archives - Page 14 of 14 - Real Estate News and Commentary

April 15, 2008November 23, 2021

Pre-sale Home Inspection

by Dan Krell
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Home inspections are commonplace among real estate transactions these days. Many people who bought without a home inspection during the recent sellers’ market will testify to the value of having one performed to determine the condition of the home. Generally, home inspectors vary by training and experience; however as of January 1, 2008, all home inspectors operating in Maryland are required to be licensed.

Now that the market has shifted to a buyers’ market, you might see advertisements by some real estate agents and home inspectors stating that a pre-listing home inspection will sell your home faster, eliminate home inspection negotiations, and reduce your liability.

If you do have a home inspection conducted prior to your sale, don’t expect the home buyer to forgo having a home inspection performed. Unless the home buyer has experience in home construction, most home buyers will want an opportunity to have a home inspection. Even if you are selling the home “as-is,” home buyers can still require (as part of a contract) to have an inspection performed to determine if there are serious issues to address in the home.

The pre-listing home inspection could possibly eliminate additional negotiation brought on by a buyer’s home inspection. But since home inspectors vary in experience, you can count on variances between your inspection and theirs. Additionally, there is always the chance that your home can sustain damage after the initial inspection, especially since listing periods tend to be longer these days. If there is additional damage, you can count on the home buyer’s inspector to point it out as well as the buyer asking you to fix it.

Does the pre-listing home inspection eliminate your requirement for disclosure of latent defects? No. Even if you had a pre-listing home inspection, the fact remains that you are still required to disclose any known latent defects (latent defects are defined as defects that a purchaser would not reasonably be expected to ascertain or observe by a careful visual inspection of the real property and pose a health or safety threat).

Don’t get me wrong, having a pre-listing home inspection performed should be on everyone’s pre-listing checklist. Actually, pre-listing home inspections have been performed by savvy home sellers for many years. The purpose of the pre-listing home inspection is to determine the home’s condition and reveal if there are serious issues to remedy. To improve your home’s appearance, you should consider making the recommended repairs. However if you cannot make the repairs, you can price the home based on the home inspector’s repair recommendations. Additionally, the home inspector’s critical eye may serve to provide feedback on enhancing the home’s appeal to potential home buyers.

Should you have a pre-listing home inspection? As a home seller, you should absolutely consider having a pre-listing home inspection performed. Although the pre-listing home inspection on its own doesn’t necessarily bring in home buyers or make the sale, it is a tool that acts as a guide to make your home more appealing to home buyers and to assist in facilitating a faster sale. For more information about a pre-listing home inspection, you can visit the America Society of Home Inspectors (ASHI.org) or the National Society of Home Inspectors (NSHI.us).

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 April 7, 2008. Copyright © 2008 Dan Krell.

April 15, 2008November 23, 2021

A lot’s at stake, proceed with caution

by Dan Krell © 2008
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Separating? Divorcing? Separation and divorce can be one of the most challenging experiences anyone can endure. Even when you decide to work things out amicably, things can become contentious and difficult; disagreements seem to be at the heart of divorce, right? If you haven’t consulted an attorney yet, you should do so to get advice and assistance on the splitting of assets (including your home) and the tax liabilities you may incur.

Splitting couples often do things in haste out of anger, fear, and sometimes (mental) exhaustion. Getting to the nitty-gritty, there’s a lot at stake; making impulsive and rushed decisions can be reckless- especially when it comes to the disposition of the marital home. Before you make a move, explore the options available to you to protect your assets and your financial investment in your home.

Divorce agreements vary with the requirement to sell the marital home. Some separating couples agree to sell immediately, while others agree to sell after a number of years (allowing one spouse to stay in the home). Depending on when your agreement requires the sale of your home, you could owe additional taxes. The tax laws are complex (consult your accountant), however filing jointly would allow you to claim up to $500,000 in real estate capital gains without being taxed, while filing individually only allows you to claim up to $250,000 real estate capital gains without being taxed.

When it comes time to sell your home, finding a Realtor who has experience with divorcing couples can make the sale go smooth. Before hiring a Realtor, interviewing several can give you an idea of their communication skills and experience. It is wise to hire a Realtor who is neutral and can work with you and your spouse; hiring a Realtor because they are a relative or friend often creates or adds to the spousal discord, which deteriorates communication at a critical time.

Misunderstandings and bad feelings between you and your spouse can undermine the home sale by interrupting communication between all parties. To facilitate a smooth sale, everyone (you, your spouse and your Realtor) should agree on the communication methods to inform each about aspects of the sale, as well as the process to show the home and the preferred method of contract negotiations. By laying the groundwork prior to listing the home, everyone knows what to expect and how the sale process will be executed.

Pricing the home realistically can eliminate a lengthy time on the market. It is good practice for your Realtor to present an analysis of the local and neighborhood market to you and your spouse so as to agree in pricing the home.

Your Realtor should always be discreet about your domestic affairs during the sale. Domestic situations, such as divorce, are not material facts about the home and do not need to be communicated to home buyers. Keeping discretion about your domestic affairs can limit bargain hunters’ “low ball” offers.

Planning and counsel can lessen the overall impact of separation and divorce by exploring your options. If you have a home and are divorcing, consult with your attorney and accountant before agreeing to listing and selling the home.

October 11, 2006August 8, 2019

Disclose disclose disclose

It is not unreasonable for home buyers to seek assurances about the homes they purchase. One method for obtaining a sense of confidence about the home is having a home inspection. Sometimes it is not as much as wanting to know what needs to be fixed as much as wanting to know what they were getting into, as one of my clients casually stated. However, home inspectors are not perfect and there are numerous conditions in the home that could go undetected. The home seller golden rule is disclose-disclose-disclose.

In the past, it used to be buyer beware. Unscrupulous home sellers racked up complaints. Consumer advocates pushed some legislatures to enact a property disclosure law. Property disclosure laws have been enacted in about thirty states. Here in Maryland, the law has been was around since 1994.

It had been incorrectly thought by home sellers (and some real estate agents), that if the disclaimer is given, the homeowner did not have to provide any information at all about the home- including relevant material facts and latent defects. In fact, some home sellers would wrongly choose the disclaimer statement to not reveal material facts or latent defects.

The disclosure addenda are constantly changing. A significant change at the time of this writing to the required Maryland disclosure still requires the homeowner to provide either the disclosure statement or disclaimer. Except the added burden of disclosing known latent defects is also required, even if you disclaim.

If you are selling your home or thinking of selling your home in the future, you should discuss with your Realtor the Maryland disclosure/disclaimer statement and recent changes to the disclosure laws. If you have any doubt about your obligations as a home seller or do not understand the disclosure law, you should consider consulting an attorney.

The golden rule of disclosure is to disclose. An issue that is disclosed to a home buyer before they enter into a contract with you is a piece of information that the home buyer will keep in mind as they purchase the home. However, undisclosed issues can come back to bite you, even after the sale.

October 11, 2006April 11, 2019

What happens to your home in a divorce?

What happens to a family home in a divorce?

When divorce is imminent, people tend to worry about the children’s future, how to treat the mother-in-law who was so nice (lucky fellow), how their friends will react. Of course, these should be at the top of one’s mind. There are many concerns to worry about.

Beyond family concerns, finances and real estate are important also. Figuring out who gets what and how much can get messy, antagonistic and litigious. That is why an attorney should be consulted on these matters.

But what about the marital home? There are various options and outcomes. Sometimes the agreement is amicable. However, there are many times where spouses disagree and rely on their legal counsel. Sometimes, the court steps in and appoints a trustee to determine the disposition of the home.

It’s common for one party to offer to buy out the other’s interest in the home. But in doing so, coming up with the money may be a challenge. “Cash-out” refinance and home equity lines are sometimes a solution if the spouse meets the lender’s underwriting guidelines. Of course, if the home has no equity, then relying on a cash-out refi may not work.

Selling a home is emotional and stressful. Selling a home during a divorce can compound the stress. It’s important to be as objective and fair as possible when making decisions about the marital home. If you are selling your home, hire a professional Realtor who is objective and adept in handling such sales. Consult with an attorney on matters of separation and divorce.

by Dan Krell © 2005
Copyright Dan Krell 2005.

October 11, 2006October 4, 2019

Selling your home FSBO

When the real estate market is good, many people try to sell their home without a Realtor. These For Sale By Owner (FSBO) sell their homes on their own for one reason-to save money on Realtor commissions. However, before embarking on such an endeavor, one should take an inventory of the pros and cons of becoming a FSBO, as well as the tools necessary to sell FSBO.

The obvious reason to sell your home FSBO, as stated above, is to save on Realtor commissions. Seasoned real estate investors may find it natural to sell a home FSBO because they control the communication as well as being able to communicate directly with potential homebuyers. First time FSBO’s may find it a bit awkward at first, but can find the rhythm necessary to complete the transaction.

How much money can you realistically save? Traditional Realtor commissions have always been around 6%, which pays the listing (homeowner) agent and the selling agent (homebuyer). However, in the last few years, there as been a trend of reduced commissions, so actual savings for a FSBO have been reduced. I have seen Realtors list a home for 4% (if you don’t believe it, send me an e-mail)! Additionally, FSBO’s are contracting and paying commission with more Realtors and their homebuyers in this environment of limited home inventory. In the end, the FSBO’s savings from Realtor commissions may be marginal.

You might think that saving money outweighs all negative aspects of selling your home FSBO. However, there are some real negative aspects of selling your home FSBO, such as time, expense, and contractual obligations.

How much is your time worth? Selling a home requires the application of time to tasks. Among the many tasks of selling a home, the top things that a FSBO may do include (and is not limited to) preparing the home for the open house, contacting the paper to advertise, putting up signs, meeting potential homebuyers, and negotiating contracts. The time quickly adds up.

Selling your home FSBO is supposed to save you money right? Well, there is a bit of expense that is necessary. A FSBO must have signs in the yard, as well as directionals (the small arrow signs) to point homebuyers in your direction. Additionally, you might consider paying the local paper for advertising, as well as paying for an internet advertisement (although there are many websites that will allow you to post for free). Another expense may be to have your attorney to review the contract to make sure it is legal and enforceable. It seems that the expenses also quickly add up.

Selling your home FSBO relieves you of certain responsibilities under the law right? Wrong. The most important thing a FSBO forgets to check is the law. That’s correct, even FSBO’s are responsible to adhere to certain federal and local laws pertaining to the sale of real estate (i.e., equal housing, lead paint, Maryland disclaimer-disclosure). This is the one area that FSBO’s get themselves in trouble because of the lack of knowledge and expertise. There is an increased liability potential.

FSBO sales are steadily increasing in the community. However, if a home owner actually does a cost analysis they may find that selling FSBO may actually not be saving them money, and actually may put them at a higher liability risk because of the lack of information and knowledge of the law. So, before you sell your home FSBO, do your homework and consult a professional.